Rocking Your Investing Strategy

‘If you try sometimes, you just might find / You get what you need” — to live well in retirement, that is.

In a sign of the times, those septuagenarian rockers the Rolling Stones set out last month on a rescheduled stadium tour (Mick Jagger was dealing with heart problems) whose sole sponsor is the Alliance for Lifetime Income, a coalition of financial companies educating people about planning for retirement. At each venue as the Stones roll in, a bus will greet the iconic group’s baby boomer fan base with information about retirement planning. It should probably be called the Gimme (Tax) Shelter tour.

The Stones seem to be in tune with the fact that only 29 percent of Americans over 50 said they feel extremely or very prepared financially for retirement and one-third said they are actually unprepared, according to a newly released poll.

The survey revealed also that among those fully retired, 25 percent said they were not very or not at all prepared, while 38 percent said they felt very or extremely prepared when they retired.

The survey of 1,423 adults by the Associated Press-NORC Center for Public Affairs Research was designed to represent the U.S. population. It was conducted Feb. 14 to 18 and has a sampling error of plus or minus 3.7 percent.

Retirement experts have said the average retiree will need to replace 70 to 80 percent of his or her annual income in retirement, and Robert Pagliarini, a certified financial planner, suggested that financial planning for retirement should begin as soon as one starts to work full-time.

“People in their 20s should work with a financial adviser to help them make the best financial decisions they can,” he said in an email interview. “Those wise decisions — even if they are small — can compound for the young person.”

And he acknowledged that retirement planning can be intimidating.

“There are a lot of moving parts, and to make matters worse, the stakes couldn’t be higher,” he said. “Individuals have worked 30 and 40 and 50 years and now want to enjoy their retirement. That’s a lot of responsibility. The best advice is to take small baby steps. This is the one thing I’ve seen that helps clients continue to make progress. If you take this big responsibility too quickly, it can quickly become overwhelming.”

Selecting a financial adviser should also be done with care. Some have said choosing a retirement planner and not a financial planner is important because the latter helps you accumulate and invest your money whereas a retirement advisor is trained to help you figure out how to use your money to generate a steady and reliable income in retirement. But Pagliarini, the owner of Pacifica Wealth Advisors in Irvine, Calif., cautioned that titles may be deceiving.

“The problem is that anyone can call themselves a financial planner, financial adviser, retirement planner, retirement adviser, etc.,” he said. “As a result, all of these titles are useless. What you need is an individual who is a fiduciary and who is a CFP [certified financial planner]. These two requirements will go a very long way in finding a competent advisor. I created AdvisorFit to help people interview advisors. It asks all of the questions that should be asked.”

Among the questions Pagliarini suggests one ask in selecting an adviser: Are you a true fiduciary, that is, someone who is legally obligated to provide advice that is in your client’s best interests; how long have you been working as a financial adviser — a rule of thumb is at least 10,000 hours to have developed expertise in the field; have you had any regulatory or legal issues; does your firm hold my money and investments – you want to hear no because there is a significant difference between a firm that manages your investments and one that manages and holds them; do you manage retirement portfolios differently from non-retirement portfolios; and can you help create an income strategy for retirement?

Pagliarini added that he recognizes that “too often we choose to ignore the unknown and what scares us. In practice, this means we don’t examine our finances and we don’t do any planning because we are worried about what we will discover. I get that. It’s a natural response, but you have to push past this fear and dive in. You may not like what you find, but at least you will know where you stand and what you need to do.”

Those who have no money worries and are considering spending their retirement years becoming involved in different charitable organizations and increasing their charitable giving might wish to get advice from the booklet “Your Jewish Philanthropy Roadmap,” produced by the Jewish Funders Network and the Jewish Communal Fund. It points out that the word “tzedakah,” often translated as “charity,” literally means “justice” and that “Jewish tradition considers giving an act of justice and our way of creating a fairer world. Giving is — for Judaism — a basic obligation, one of the main tools we have to change reality and manifest our deepest human values.”

“Maybe you want to change the world or at least the small piece of it where you live,” it says. “In doing so you hope to inspire others to follow suit. … There may be a family legacy you want to preserve. Your social, cultural or political values will inevitably play a prominent role in your philanthropic decision-making. So might the causes and affiliations you are already a part of.”

The booklet notes that “many philanthropists center their giving around their spiritual beliefs and/or religious practices. They support not only their house of worship but also organizations and causes that they learn about through their community of faith. Our Jewish tradition and values speak to the importance of tzedakah, or acts of justice. The Torah tells us, ‘You shall surely open your hand to the poor and the destitute of your land.’ The Jewish community has a long tradition of establishing institutions to provide for those in need. It is worthwhile to take the opportunity to explore how your Jewish values can inform and guide your charitable giving.”

Just as important as having a solid financial portfolio is the need to “strengthen one’s psychological portfolio,” according to Nancy K. Schlossberg of Sarasota, Fla., a retired professor of counseling psychology and author of the 2017 book, “Too Young to be Old” (published by the American Psychological Association).

She said her research has taught her that there are various paths retirees follow, including those who embark on something very different from their life’s work; those who continually search to “find something new — trying to figure out where they belong”; the “easy gliders who wake up in the morning and just let the day unfold”; those who are “involved spectators,” such as retired politicians who remain news junkies; and those who take a time-out to get their wits about them, some of whom then become couch potatoes.

“I don’t want couch potatoes to get depressed, but it just shows that there is life after work and many paths you can take,” said Schlossberg, who recently turned 90 and continues to write books in retirement. “But whatever path you take, you need a sense of purpose.”