Fast forward to now and the daughters have taken a look at mom’s retirement accounts with her, only to discover that mom has a 401k with $180,000 in it and it’s lost $17,000 over the last two weeks.
Mom had picked her investments with the help of a friend many, many years before, and hadn’t looked at those investments since. My colleague’s mom is mostly invested in high-growth ETFs, which may have been the right choice when she was building her retirement fund, but definitely is not the right choice given that she retires next year and will need to start making withdrawals to replace her income.
If mom doesn’t get her money into safer investments now, her daughters could end up needing to support her for the rest of her life. So, why am I sharing this story with you? Because now is the time for you to get connected to your investments, even if they are in a retirement account and invested through a broker or advisor.
This is simply not the time to set it and forget it.
It’s time to know what you have, and make intentional, aware choices about how your resources (and your parent’s resources) are being used, or hire a professional to keep track of them and do it for you. They are not nearly as expensive as you might expect and now is truly the time to understand what you have, and use it wisely.
Educate Yourself
If you or your parents have a retirement account, and you are not intimately connected to how your assets are being invested, it’s time to get more involved. Log in to your retirement account or pull your last statement and look. Many brokerages select investment funds for their clients’ portfolios based on rates of growth. They’ll offer investment options based on a few tiers of growth and risk, and very often you have no idea what your assets are actually invested in.
Labels like “slow-growth” or “conservative” or “high-growth” or “income” aren’t enough to tell you exactly where your money is invested. So what you want to do now is look at your statement, which should contain the names of the funds chosen for you, and you can go from there to do your research. Look up each of the funds on sites like Yahoo Finance to see what you are investing in, and whether you understand these companies, believe in their future growth, and want to stay invested there.
If your investments are tied to an index, like the S&P, are you willing to keep betting on its growth? If not, now may be the time to make a shift. It’s possible that you have some losses right now, so you’ll have to decide if you want to lock in and limit those losses (and potentially trade some future gains even) to get more connected to what you are investing in now. Go through this process with your parents, too. The money they have invested in the stock market is part of your overall family wealth. If it’s not there to support them through their senior years, that financial responsibility will eventually fall to you.
Having these conversations with them now can be difficult, but it’s important. And if you need help with this, please let us know, and we can support you as you raise these issues with them. If you have a broker you work with, call them now, and ask to get on a video conference. Then, have them help you review each investment, why it’s been chosen, and whether there may be better or other options for you or your parents. Here’s the key: make sure you understand it, and don’t hang up the phone until you do. If your broker is using words you don’t understand, or jargon, keep asking questions until you do understand.
If you need a referral to one of the regular financial advisor I work with and trust, or if you want me to sit down with you to help you look at what you have, give us a call. With everything that is happening in the world—and with the volatility of the stock market and our current reality —knowing your options is vital to preserving the life and legacy you and your parents have worked to build. If you need help figuring out how to best preserve these assets, I am here and ready to support you.
This article is a service of family trust lawyer Stuart Williams and the Family Wills and Trusts law firm of Lansing. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
