50+ Lifestyles

2010 Resolution – Take Control

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

I encourage you to use the Golden Rule of Investing in 2010

Resolve – if you have not applied the Golden Rule of Investing to your retirement assets – then do it! What’s the Golden Rule of Investing?? It is simply a ‘rule of thumb’ but in my opinion, it’s a good rule – it is a guideline to determine allocation of money – especially valued retirement money from the risk of loss in stock and mutual fund markets. AND it is in stock and mutual fund markets where MOST of retirement money is – that’s where 401K money is – that’s where IRA money is – it’s in stock and mutual fund markets. It is subject to risk of loss with market downturns. We all know the losses of 2008. Now with some recovery in 2009, I encourage you to use the Golden Rule of Investing in 2010 – apply the Golden Rule to your investment accounts.

What is the Golden Rule? – simply subtract your age from the number 100 – the result is the MAXIMUM percentage of your retirement money that should be in the stock and mutual fund markets. At age 50 from 100 is 50%. That’s the maximum percentage of retirement money that should be exposed to risk. At age 60 from 100 = 40% is maximum – At age 70 from 100 = 30% is the maximum – at age 80 from 100 = 20%.

Have you applied the Golden Rule of investing to your retirement money? Make this your resolution for 2010. Put pencil to paper and determine how close you come to this Golden Rule guideline. Folks – take control of your retirement money by taking this action. If you were within these guidelines prior to 2008, you enjoyed the comfort of safety during that very negative year. If you were within these guidelines for 2009 – then a portion of your assets gained with the nice growth we had in 2009.

Where are we headed for 2010 – who knows? What can we do about market volatility? We can take action to gain control of our money by first applying this resolution for 2010 – apply the Golden Rule to your valued retirement money. That’s resolution number 1.

Resolution number 2 – if you are not yet retired – check with your 401K or other retirement plan to determine if you have the right to an In-Service distribution. (Sometimes called a non-hardship withdraw). Do you remember what an In Service distribution is?? An In-Service Distribution is a strategy that allows you greater flexibility in applying the Golden Rule of Investing…IF YOUR PLAN ALLOWS the In-Service Distribution. The distribution – if provided by your plan – will allow you to rollover or transfer a portion of your 401K or other employer provided plan to an individual IRA while you are still employed. The benefit of this action is to provide additional diversity and greater control of retirement assets. You continue to participate in the retirement plan. If the employer matches a portion of your 401K contributions, that match will continue. But after completing the In-Service Distribution, you now have 2 retirement accounts – the 401K and an individual IRA. Remember the old saying of not having all your eggs in one basket? In-Service Distributions or Non-Hardship withdraws – if allowed by your plan – helps to accomplish diversity and control.

There are many companies in the Quad City area that allow In-Service Distributions. We have a listing of many of these companies. We encourage persons not yet retired but moving toward retirement – Baby Boomers – that’s you – to look into the In-Service Distribution as one of the retirement planning options available to you. The resolution for 2010 is to simply take action to determine IF the In-Service Distribution option is available for you. How do you determine if In-Service Distributions are available? Simply call the 800 number on your retirement statement or call us to check that list.

Wish you the best for 2010.