Investing to Reach your goals - Stay the course!

Portfolio got you down? Delma Luna says to “Stay the course”. At the June meeting of Yuma’s American Business Women’s Association, Delma Luna provided insight into investing to achieve your goals.

There are several reasons that investors fail in their finances:
• Procrastination is the biggest reason. The sooner you start planning for retirement, the better. How much of your retirement income is your responsibility? Social security and pensions will account for not quite half of your retirement funds. The remainder will need to come from your savings. Social security will just be a portion of what you will need in retirement. The system is in trouble and a person can’t depend on it to be there in the future in its present form.
• Ignorance of investment fundamentals such as asset allocation, diversification, and using insurance. Asset allocation is how your money is divided between cash, stocks, bond and other investments. Diversification is spreading your money around to many different investments to spread out the risk. Life insurance fills a need if something happens to you before retirement to protect your family.
• Ignorance of tax laws, not using the tax-deferred options available to an individual and through employment. Using tax deferral in a retirement account allows you to save and defer the taxes until the money is withdrawn in retirement. The maximum amount to contribute to an IRA in 2009 is $5000 with a $1000 catch-up if you are over age 50. Roth IRAs allow you to save for retirement using money that has been taxed already and then it is tax free upon withdrawal.
• Retirement Distribution Planning – not planning how to take the withdrawals once in retirement, either by taking too much, or from the wrong place in the wrong order.
• Not being ready for the unexpected. This is where an emergency fund and insurance comes in, such as life and long term care insurance.
• Not having a comprehensive retirement strategy – having a plan make all the difference in the world. Working with a financial advisor can help ease the way.

Delma can be contacted at (928) 329-1700 or by email Delma.luna@lpl.com