Fox Business
Expand
Browse All Video
Watch Live

You're watching...

Can a financial advisor save your savings?

Details

  • Description

    Larry Rosenthal on why you should hire a financial advisor

  • Duration 9:45
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Rosenthal is joining us from Washington DC -- bureau there hi Larry how -- Good morning learn how are you today thank you having me here the president of Rosenthal wealth management group and you are financial -- their right.

Yes -- I am and -- we all hire you or someone just like you.

Well.

You know financial advisors today are going to be able to ask the questions that a lot of people really don't know how to ask or or -- for themselves.

A lot of people are are focused on trying to grow their assets -- and when and fact there's three stages to financial planning near the accumulation stage trying to grow your your your money in your wealth.

Then distribution stage when you need to have year.

-- -- provide -- income for yourself during retirement years -- college funding years from a reliable dependable source of -- tax efficient manner.

And then the legacy planning aspect of it how to pass your assets onto -- is effectively.

OK so what would you say the number one being is that most people do not know.

And they should know so I guess if you could dispense some free financial advice.

Right now what would that be.

Well.

The the most difficult stage of financial planning is the distribution stage that's when you're when you're very close to or or in your early years in retirement is making sure that you.

-- properly position their assets for distribution as far as growth and income it's very important now that people living longer you know 2035.

Years or so in retirement.

That you outpace both taxes and inflation.

And one of the tricks is that you you know during your accumulation years you're growing your -- -- growing growing growing them.

A lot of times those assets that are in the growth mode are properly.

Designed to give you the income you need during retirement years.

And and on another part to people need tax allocation.

There's four different ways that that the RS comes in taxes are money -- the -- growing.

And during the distributions days of people need to understand the tax ramifications.

Putting money away today as well as pulling them out what are those -- ways.

-- the first way is is taxable you pay taxes each year that your assets grow another way is one most popular ways like in a 401K type plan.

More of the government thrift plan we receive a tax deduction for the dollars that go in it all grows tax deferred when you pull out you pay taxes on it.

Then a third way is a non deductible tax deferred way such as of non deductible IRA contribution or some vehicle that grows tax deferred.

In the fourth ways tax exempt or tax free income.

So it's it's great to receive your tax deduction today what you put money -- your retirement plans but down the road if you feel that taxes are starting to.

What will could go up during retirement years it also be nice to have an equal amount of money on the tax free side of the ledger when you're going to pull money out in retirement.

Yes that's certainly something that not everybody thinks about you don't even noted think about all that stuff sometimes -- -- -- should check their investments.

Well I think that.

-- that -- somebody should work with a financial advisor.

And the financial advisor should re run their financial plan at least once a year.

As far as an individual monitoring their investments I've seen people monitor -- you know weekly monthly.

But the financial advisors really should be looking at it very closely monitoring the investment assets the markets the economy what's happening there on a daily basis.

And meeting with their clients anywhere from two to four times a year depending on the client's needs.

And the client you know the close of the clients are -- to meeting dollars back for themselves.

The more those -- meetings didn't need to take place to make sure that everybody is on pace to accomplish their financial.

And that's pretty frequent especially -- going to be four times a year to meet with your financial advisor.

I just isn't an age depending questions I'm not sure how you'd wanna answer it but.

Best protect against downside risks to your investments because everybody knows -- -- put money into the stock market.

And let's say the ended 2010.

It's kind of probably right where it started the markets are essentially flat over the past couple of years.

So we're not seeing our money work for us you know.

That well so and in many cases it's been harmed so go ahead Syria.

Could correct chlorinated and did to get to the the meat of your question there how do you protect yourself from downside risk in the market first -- you have to understand.

What's inside your portfolio and you need to take a look at your the overall risk of your investment strategies is are you equal with market risk yes -- no.

Maybe you have less risk than what's in the marketplace and that's a good starting point one another way that that we do a lot with clients is something called trailing stop losses.

You know if you -- -- security say it fifty dollars a share.

And then you put a stop loss in -- a forty dollars a share and it goes down to forty itself is due out -- -- trailing stop loss.

Works in a more efficient manner -- allows for you to build in profits as the as the stock grows.

So divided fifty dollars a share let's say goes to sixty.

And the seventy and -- AB.

And and that trailing stop loss at ten dollar difference will continue to move up with -- so when the stock hits eighty the trailing stop losses at seventy -- -- starts to come back down again.

Once it hits seventy it'll sell you well so therefore you bought it -- 51 up to eighty came down to seventy so that stop loss trails up with the stock.

To protect you to make sure that you you do get some profits built in -- the stock is -- enough to go up and then you look for another opportunity another way to look at downside risk.

Also is is to use different types of annuity programs that are out there and there's three different types of annuities and there's all kinds of mixed messages on -- and in people really need to get some good education on how -- work.

-- we believe that everybody should take a look at them they're not right for everybody but in some cases the proper -- will help people from downside risk as well.

The trailing stop loss what a tip by did not know that.

Those worst case scenarios.

Well one thing is that a lot of people you know when when they go to retire lord -- that are received in most cases less income from Social Security -- pensions or their savings and investments.

They haven't really -- what -- finish line needs to look like in one quick way to go about doing this for your viewers.

Is to simply ask the question you know when you get your paycheck.

After everything's taken out taxes 401K contributions health care all that stuff how much net goes in your checkbook.

And then do you live off of that each month that's the number that you really need to take a look at and then those dollars need to make sure.

They need to make sure that you have enough resource is to keep pace with taxes and inflation during your retirement years so so couple of big questions are you know what.

What what are the advantages that a financial -- we'll bring to the table is the ability to run an updated financial plan sort.

Draws a line in the sand in takes a look at where you are now and asked the question if I keep doing what I've been doing will -- be down the road.

And then you -- you need to examine the obstacles and the strengths and weaknesses that you have to accomplish these goals and make sure.

That you monitor and and and and -- the goal from time to time and is in retirement it's all about retirement income.

And Larry if you don't have that proper plan set up you could damage your credit let's say and then your kid goes says.

Get a suit Oman and well you can't back -- -- credits or I mean is that that's feasible that's happened.

Hey I'm sure it has happened many many times and -- some some tips said that a lot of people.

Really need to understand also Lauren RR firm works with people that are close to -- already in retirement years.

And today with today's mortgage rates take a look at refinancing your house before you move into retirement.

And take a look at making sure that you have palm.

Enough money budgeted for your long term care premiums as they go up during your retirement years and also take a look at your automobiles you know.

If your automobile is eight years old it's got a 100000 miles on it and you're getting ready to retire you may wanna purchase a new one before you go into retirement years that you have to buy a couple of -- during retirement years as well.

-- -- -- big physically we're living longer and we need finances for that and you know the average car on the hook right now is eleven years old that's pretty old.

So I guess -- -- pushing maritime mining district to save money not get a new car maybe these to think about doing that while there still working.

Already see with sector wise what where you see money going to.

-- the most profitable in the short term.

Well in the short term you know the market is sort of a trading market right now there's a lot of geo political risk around the globe with Europe.

Europe's plan.

To get things fixed is gonna be disclosed more so in detail in January so I think Europe's gonna be quiet for a little while right now and then you've got our fiscal cliff facing us here in the US you know -- the several bullet points there.

On congress is gonna need to act here pretty soon to make sure that they don't pull too -- GDP out of -- -- -- for weak economy but is still showing some expansion we know that Ben Bernanke and the Fed shares.

Back willing ready and able to act if he needs but you know we want to see that the economy grow jobs from organic.

Manner and in businesses -- -- provided thrive so I would say right now allocations need to be looking at.

A large cap multinational.

Stocks we also need to make sure that we have.

Proper amount of money -- our bond allocation both on the credit side as well as the interest rate sensitive side of a combination of both there.

So yeah home all all we're pretty optimistic because a lot of these issues are all coming to -- -- and Wall Street's gonna get some clarity of direction towards the end of the year.

OK Larry Rosenthal.

For your money in some blue chips I suppose thank you for coming on president of Rosenthal wealth management group we appreciate your time -- and now we have some.

Load More