Q&A: Retirement Planning

Valley Financial Planner David Larson Discusses Saving For The Future

Posted: April 30, 2013

The Shenandoah Valley Business Journal's Jeremy Hunt posed the following questions about retirement planning to David Larson, certified financial planner, and owner of Bluestone Financial Services in Harrisonburg.

JH: What is the average age or a typical age range that people start to think about retirement or come in for advice?

David Larson: The sooner you address your financial goals the better off you will be. Many people wait until they are just a few years from retirement and ultimately regret not taking a more active role when they were younger.

JH: According to a survey by professional services firm Deloitte, 58 percent of Americans don’t have a formal retirement income or savings in place, despite half saying retirement is a top priority. What prevents people from setting a formal plan in place?

JH: Many factors can prevent people from planning for their retirement. Oftentimes, the process seems so overwhelming that they do not know where to start. For others, they may be so busy with work and family that they simply do not take the time. Still others prefer to focus on today without giving much thought to their golden years.

JH: At what age is it important to start thinking about retirement? Some people may feel it’s too late to get started. Is there such a thing as “too late”?

JH: Most people should begin to think about retirement when they finish school and begin their career, if not sooner. This is the time to begin regular saving. If you get married and start a family, you should continue to save, as well as consider life insurance and putting a will in place. Many who wait until later find that they either have to cut back their standard of living or work longer than they had expected. It is never too late to start.

JH: What are misconceptions people have about retirement planning? What can/should they do to overcome concerns about putting their savings into investment accounts, particularly with regard to the stock market?

DL: One big misconception is that you need to have a very high income during your working life to enjoy a comfortable retirement. Whether you make $40,000 per year or $300,000 per year, it is important to live below your means and make saving automatic. When investing, you should always consider your time horizon and your attitude toward risk. Typically, the most successful investors keep a long-term focus and stick with their plan, regardless of current events.

JH: What role does portfolio diversification play?

DL: Proper diversification cannot eliminate risk, however, a well-balanced portfolio can manage overall risk. Each individual investor should consider their own circumstances and educate themselves as much as possible.

JH: Do you have any general comments about retirement planning?

DL: Planning for your retirement is not a one-time event. Once you implement your plan, you should continue to monitor and update your plan as your life changes.

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