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Protecting and Growing Your Wealth

Halle Holmes, CFP®, CPA

Director of Financial Education

Last Updated
November 16, 2022
Man demonstrating investment and savings growth

6 Tips to Help Build and Preserve Your Retirement Savings

In today’s environment of rapidly rising inflation, volatile market returns, inflated housing costs and complex tax policies, many people might be struggling to grow and protect their wealth. If you find yourself fighting to get ahead, try to relax. The following tips can help you more efficiently build and preserve your retirement savings.

Tip #1 – Have a financial plan in place.

If you’ve read any of our other articles, you already know that this tip is nearly always at the top of any of our lists. We’ve said it before, and we’ll say it again — we believe the best way to achieve your financial goals is by establishing a comprehensive financial plan to guide your decision-making.

Not only can your financial plan help you save and invest with purpose but it can also identify any gaps in your insurance coverage that may put your family at risk. Your wealth manager will work with you to establish a custom financial plan that incorporates a wide range of strategies to help grow and protect your wealth.

Tip #2 – Understand your tolerance for risk.

Investment risk and reward generally go hand in hand, but it’s important to be comfortable with your portfolio’s risk level and fully understand the risks you’re taking before you invest. Your wealth manager has a wide range of tools to help identify your personal risk tolerance. Using this information as well as your current financial situation, goals for the future and time horizon, he or she will develop a portfolio to help achieve your goals without keeping you up at night. Having a financial plan in place that takes into consideration your specific goals, income needs, estate planning goals and more leads to a customized portfolio built around your specific situation to weather market volatility.

Tip #3 – Take into consideration your time horizon.

The amount of time you have to invest plays an important role in how you should invest and save as well as what type of insurance you should have. If you’re just beginning your investing journey, you likely have decades to weather the ups and downs of market volatility. However, if you’re nearing retirement, you may not have as much time to recover from a severe downturn. Transferring all your riskier, growth-focused assets into more conservative investments, such as bonds and CDs, is a common misstep among those looking to retire soon. By doing this prematurely, you miss out on growth and lose purchasing power (due to inflation). This is why, at Creative Planning, we use our financial planning process to drive your investment recommendations.

Tip #4 – Ensure you’re properly insured.

Regardless of how hard you’ve worked to grow your wealth, if you’re not properly insured, your family could be at risk if something unexpected occurs. It’s important to conduct a regular review of your insurance policies to help ensure you have adequate coverage to protect your loved ones. Good life insurance planning is a very important part of a comprehensive financial plan.

There are a few good reasons to own life insurance; however, by far the most common is to protect your family should something unexpected happen to you. If you’re young and just starting the process of saving and building your assets, you might not have sufficient assets to provide for your dependents without a life insurance policy in place. On the other hand, if you’re at the point in your life where you’ve followed your plan and built your balance sheet up to a point where you no longer need life insurance, a policy may no longer be worth the premiums.

Based on your particular financial situation and future goals, you may wish to consider having the following policies in place:

Tip #5 – Implement a diversified investment strategy.

One of the best ways to limit your portfolio risk is by investing in a diverse mix of investment types and asset classes. Consider spreading out your risk across geographic regions, market capitalizations, regions and industries. Your wealth manager can help implement a diverse asset allocation in line with your current financial situation, goals for the future, risk tolerance, time horizon and more.

Tip #6 – Take steps to lower your tax liability.

If not properly planned for, taxes can quickly erode your savings and put your retirement at risk. That’s why it’s important to incorporate tax planning strategies into your overall financial plan. Your wealth manager can advise on the proper use of the following tax-saving strategies.

Interested in learning more about how to build and preserve your wealth? Creative Planning is here for you. Our experienced professionals work to ensure all aspects of your financial life are well cared for and working to help you achieve your long-term goals. Schedule a call to learn more.

 

 

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This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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