In our changing economic times it is more important than ever to focus on our retirement planning and financial futures.  For most of us, we have never seen the wild ride that the financial markets have shown us the last few months.  Just as we check our calories, blood pressure and weight on a regular basis, how are we doing with our finances?   It may be time for a routine check-up.

Studies have shown us the average American spends more time annually on vacation planning than on financial planning.  There was also a survey by Aetna claiming 31 percent of pre-retirees would rather clean their bathroom or pay bills than plan for retirement.  Allstate used to have an ad that claimed Last year Americans spent 19 hours planning for their retirement. That’s about the same amount of time they spent planning their Thanksgiving dinner. 

So how do we get started and what are our choices today?  Unfortunately retirement planning is not something the faint of heart can jump right into, but it can be done and with a little practice, and does get easier.  Here are some tips,

1.        Set time aside, I have heard many workers and retirees say over the last few month, “I don’t even want to look at my brokerage statement”.  This attitude will not help, if there was ever a time to face the facts and planning was needed, it is now.  Set time aside every month when you reconcile the bank statement to look at your investments.

2.       If you cannot do financial planning look to hire a reputable local financial planner.  Financial Planners can sing their accolades but would any one recommend them.  If you like to keep your finger of the pulse, hire a fee based financial planner.  A fee based planner is paid for work he/she does and not percentage of your portfolio.  If you don’t like to do any planning, consider hiring a Trust company that will be more accountable to your needs.

3.       Do some of planning yourself, with the internet today information is easier than ever.  Most mutual funds are rated online and can easily be compared.  There is always something you can do to help your retirement accounts.  Let’s talk about buying certificates of deposits(CDs), take the time to call the local banks and find out where the rates are going.  I will give you a tip, look at the successful local banks, typical they are growing,  they need capital and will pay the higher rates.

4.       Focus on the many choices available.  The saying could never be truer.  Diversify, Diversify, And Diversify.  If you need a fixed income, don’t put all your money in one bond fund, pick numerous funds and some bank CDs.  There are more investment choices than ever.  Self-Directed Retirement accounts are the greatest way to diversify.

As with any physical fitness planner, it takes a little extra work and time.  Why not become a Control Freak with your retirement.  One of the best opportunities in financial planning is a Self-Directed IRA.  Have you heard of Self-Direction?  Self-Direction is all about control and you making the best choices for your retirement.   This type of account not only lets you control the investments but allows you to have unlimited choices.  Stock brokers usually will only let you buy stock, bonds and mutual funds.  With a Self-Directed Administrator, you can choices stocks and bonds, plus real estate, private notes and mortgages, LLC, nonpublic stock; the list is endless.  If you are a control freak, and you used to own rental homes, now you can buy them in your IRA account.  Did you know that you can get a higher return on your investments by loaning money from your IRA?  The interest is tax free to the account and the rates are usually higher than bank rates.  Many Control Freaks invest in private bank stocks.  Investors like these stocks because banks are highly regulated and including the dividends can great returns.  The list is endless with Self-Direction in what you can invest in.  There are 5 national Self Directed Companies with Entrust being the largest.  If you are looking for the ultimate diversification become a Control Freak and learn about Self Direction.

As we all head in to unchartered waters in the next few years with our financial futures, now is the time to be proactive and look for opportunities.  The small steps we make to today will make big changes in the coming years.  So next month when you get ready to check your weight, cholesterol and blood pressure spend an extra hour, reconciling bank account and looking at every investment you have.  Now is the time to take control.

Dave Owens is a Certified Public Accountant in Southwest Florida that specializes in Individual Retirement Accounts.  Dave can be reached at owens@1031company.com or 239-333-1031.