planning for retirement

Spring 2020 10 KEILA SZPALLER Montana 55

Here’s one planning tip for your financial portfolio: Check your family health history.

That bit of advice comes from Bob Se idenschwarz, a financial adviser with SG Long Financial.

“What is your current state of health? What is your family’s health history? Is there longevity in your family of origin ?” Seidenschwarz said. “This becomes an important consideration.”

Current events can also create stresses as people plan for their futures. How do they consider the effects of the coronavi rus, for instance, or global warming? If you own stocks such as Amazon, Google or Starbucks, which has operations in China, how do you assess the effects of the coronavirus on the markets? Seidenschwarz, in the business some 30 years and based in Missoula, said people have access to a lot of educational materials, but sometimes, it helps to sit down with an expert.

“I think having a conversation with a professional is helpful to put things in its proper perspective,” Seidenschwarz said. Remember, he said, there are and will be events that can be unsettling, but over the long term, wealth is still being created. Earlier this year, Seidenschwarz an swered some questions from the Missoulian about planning for retirement. Here’s a Q&A adapted from that interview. Q. If you’re coming up on 55 and looking at another decade or so of work, how you should be looking at your finan cial portfolio? A. Now, you are given an end game to what then becomes that magical word, retirement. So that’s where we have to start thinking about, what actually does retirement look like and mean to you? It’s a question I pose to people so they can start having that conversation with their spouses, significant others or them selves. And we attach a lot of nice sounding terminology to retirement. These are your golden years, your freedom to do what you wish, to travel. While that’s appealing, what we tend to forget is that our characteristics and habits are pretty well-established by the time we are 55 years old. In terms of what that looks like, I would do a check of, ‘Who am I? What is my personality? What do I enjoy doing?’ And measure that against the resources you’re going to have available 10 years hence. Q. What are the top mistakes to avoid at this time?

A. There’s several of them. I don’t think people think about one of the most important issues, which is longevity. It’s not so much a mistake as it is forget ting the reality that we are living much longer. The average life expectancy in the U.S. in 2019 was 76.3 years. For a female it is 81 years and a male is 78.9 years. This means the resources that we have — or don’t have — are going to have to last a lot longer than what historically humankind mortality tables have been.

What I’ve learned in all these decades is until you arrive at that point, a lot of folks think, ‘It’s never going to be me.’’ It’s always someone else. Look around at the examples. At 55, we still have a lot of our parents that are still living. One of the most important conversations we can have, which doesn’t often hap pen, is to talk to those aging parents and ask them what they, if given the chance to do it again, would have done differ ently? One of the things I’ve observed is having mentors in your life that you can actually use as real live breathing ex amples of what you’re going to be facing, and then ask those questions, such as, ‘How prepared am I?’ It’s a sobering reality, but the majority of people have not started saving early enough to have the magic of compounding working for them. Later in life the desire to save may be there, but the resources may not be available to do so. It’s important to evaluate annually now what your retire ment income needs are, so adjustments can be made to your contributions to meet those goals. Q. If you think you might be behind in your 401(k), how do you get on track? A. Think of the ways that you may create wealth for yourself. You may inherit assets if you’re lucky. You can start a business. We know that there is a lot of risk to starting your own business, and the rate of failure is rather high. One of your options through your 401(k) is

11 mt55mag.com to invest in stocks, bonds, commodities and real estate, in investments that we are familiar with called mutual funds. This will help you create wealth to be used in your retirement years. The challenge is, if you are behind, what is needed to catch up? Some difficult decisions will have to be made. If you have discretionary income to allow you to increase your contributions, then by all means do so. If you are like most Americans, that may not be an option, and you will have to make some deci sions about prioritizing what you can live without in order to secure a com fortable future. I call it wants and needs. I want it, but do I really need it? Q. Do you need a financial adviser to get on track? A. You can take the time to learn about this on your own. There is no end to the information out there in terms of what you can access on the internet, books that are available, you can go to Barnes & Noble and there’s a whole section on finance. But here’s the reality. How many people have the time and the interest and the discipline to do that? So that’s why the Vanguards, Charles Schwab, or people in my position exist. We’ve been educated and trained in this profession. We are the biggest most vibrant economy in the world — not to say that China isn’t nipping at our heels. But we are maybe the least educated people about how this economic system as a society works, and how it creates wealth and opportunity for you to par ticipate in it. Q. How do you avoid shysters? A. You can actually call the state of Montana to see if a person has had any types of legal issues relating to the industry. If a complaint is made, that has to be filed with the regulatory enti ties, whether it’s the state of Montana or FINRA. These are our governing entities that provide protection for the consumer against people in our industry that may not be acting on behalf of the best interest of the client. You can also interview advisers, gauge their credibil ity and review their certifications to see if they’ve had any compliance issues.” MT55 Bob Seidenschwarz, a financial adviser with SG Long Financial, said longevity is an important issue to consider when planning for retirement.