Saving for Retirement When You’re Self-Employed? It Takes Planning and Commitment

For most people, retirement planning is a critical, but often overlooked, a step that they don’t face until later in life. Just like most things on Wall Street, there are several ways to successfully plan for your retirement, the key is to find one that works for you. That said, here are three timeless lessons for your consideration:

1. Enough Money Is Not Enough – Your Living Expenses Will Be Higher Than You Think When You Retire

Most people create a plan that will give them “enough” money when they retire. The problem with that mindset is that it does not account for the unexpected (and often expensive) surprises that happen in life. Some of these surprises can be unforeseen medical costs (including LTC), unavoidable travel, income taxes (For most people, Social Security is considered taxable income), unplanned debt (most retirees today still have a huge mortgage or other debt), and inflation. So, it is not enough to plan for enough money when you retire, to be safe, you want to have more than enough money.

2. Always Respect Risk – Your Portfolio Is Probably Taking On More Risk Than You Realize

Respecting risk is one of the most important components of a proper retirement plan. Most people invest 100% of their retirement portfolio into the stock market. In up markets, that is a great investment because your portfolio grows steadily but in bear markets that is a very risky proposition. Remember, a bear market is defined by a decline of at least 20% or more from a recent high. Over the past 100 years, there have been 8 devastating bear markets, ranging from -21.8% to -83.4%. The last bear market was in 2008-2009 and the market was cut in half. It is important to note that another bear market will happen, it is just a matter of when, not if. The key is to prepare for it now before it happens. Not after the fact.

3. Update Your Retirement Plan Frequently – The retirement plan you created just 5 years ago is probably obsolete or needs to be updated.

Think about everything that has changed in your life in the last 5 years. For most people, their occupation, income, spending, health, or even geography may have changed. That’s why it is imperative to update your retirement plan to make sure your plan stays aligned with your current (and future) needs. I spoke to Stephen A. Hartel, AIF® Wealth Advisor at Trilogy that has $3 billion in assets under management*, and he told me, “Your plan needs to be a living, breathing thing that you and your advisor work on every quarter or at least every year.” Steve told me that he does not believe in cookie-cutter financial plans because everyone’s needs and goals are different and that inspired this article.

Bottom Line:

These are just a few points to consider when planning for your retirement. The key is to plan early and make sure you are way ahead of the curve so you can retire comfortably.

Read the article here.

* Correction: Trilogy Financial has over $2 billion in assets, rather than the $3 billion referenced in the Forbes article, “3 Timeless Lessons for Your Retirement”.

James Rooney hadn’t planned on carving out a niche working with deaf clients. But nearly 30 years after his first encounter with a deaf client, he has become Morgan Stanley’s go-to adviser for this unique community of clients.

“If a deaf client were to walk into any Morgan Stanley office anywhere in the country, they will find me,” he said.

Mr. Rooney, who is based in West Hartford, Conn., and has been an adviser at Morgan Stanley for 20 years, was with Merrill Lynch in Long Island, N. Y., in the early 1990s when he noticed the receptionist struggling to communicate with a deaf client.

“I walked over and started talking to the person in sign language,” Mr. Rooney recalls. “Within six months, I probably got a dozen or more unsolicited walk-in deaf clients.”

Mr. Rooney, who now has 225 deaf clients, learned sign language as a child growing up in a household with two deaf parents.

Even though he and his team also work with about 1,000 other clients without hearing impairments, he considers his work with deaf clients as a “way to honor my parents.”

“I have grown my client base of deaf people every year and it’s mostly word-of-mouth referrals,” he said.

There are an estimated 2.2 million deaf people living in the United States, a number that is shrinking as a result of medical and technological advancements. But financial advisers who work with one or several deaf clients uniformly agree that it is an underserved market.

It was less than two years ago that wealth adviser Matthew Phillips had his first encounter with a deaf prospective client who emailed him at Trilogy Financial and closed with the explanation, “we are deaf.”

Mr. Phillips, who had studied sign language in college but didn’t consider himself fluent, wasn’t sure how to proceed.

“I reached out to our team to ask how we should handle this, and nobody had any idea,” he said. “I started to realize no one at Trilogy [which has 150 advisors in 10 offices] has dealt with this before.”

Mr. Phillips, who now works with 20 deaf clients, contacted his former sign language instructor at California Baptist University for some advice.

The instructor, W. Daniel Blair, organized a tutorial for a half dozen Trilogy advisors.

One of the challenges when it comes to providing financial advice to a deaf person is clear communication. With technology and creative determination, the communication can be managed even if the adviser isn’t fluent in sign language. But even being fluent in sign language doesn’t guarantee perfect communication.

“There’s so much in the financial world that doesn’t exist in sign language,” Mr. Blair said.

Not only does sign language differ by region, similar to regional accents, but he said some words just don’t exist in sign language.

“Take compound interest, for example, which I don’t think most hearing people even understand, but there’s just no way to interpret that in sign language,” Mr. Blair said.

In another example, he recalls watching a certified American Sign Language interpreter signing for the word investment in a way Mr. Blair said he would have signed for the word contribute.

“And what I was signing for investment, the interpreter was using for saving,” Mr. Blair said.

Mr. Rooney of Morgan Stanley has had similar experiences trying to employ words and phrases that did not yet exist in sign language.

“There’s a sign for interest and most everyone understands that, but I found there was not a sign for dividend, which is similar to interest,” he said. “So I decided to make a sign for dividend, and now I see other signers using it. That’s exactly the way it works. Sign language, like all language, evolves.”

Of course, many financial advisors don’t even have a foundation in sign language to start with. But that hasn’t prevented John Cooper, private client advisor at Greenwood Capital, from working with a deaf client for the past 10 years.

“We meet in person once a year, and I give him a notepad and I have a notepad, and that’s how we communicate,” Mr. Cooper said. “Let’s just say there’s not a lot of small talk.”

Technology, including the internet and smartphones, has made communication a lot easier than with the early teletype phone communication of decades ago when deaf people would have to type messages to a hearing operator, who would act as translator.

Mr. Rooney said he now has a video phone in his office that enables him to sign with his deaf clients in real-time.

For advisors who are interested in working with deaf clients, or who might be having trouble communicating with current clients who are deaf, Mr. Rooney said it’s important to make eye contact and remember always to face the deaf person.

“They may be able to read lips, so be sure to enunciate properly, maybe even over-enunciate,” he said. “And be patient. I find it much more frustrating for me not being able to get my ideas across than they were with me because they couldn’t understand what I was trying to say.”

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