If you or your parents have a retirement account, (or any investment accounts for that matter)
now is the time to get connected to how those accounts are invested. While you may have
outsourced all of this to a broker in the past, you can no longer afford to allow your
investments to be made without your clear understanding of exactly what you are investing in,
how and whether your investments align with your plans for the future.
An Investment Story
My colleague shared a story that hit home with me, and it may for you as well.
After my colleague’s grandmother died, her grandmother’s retirement and investment
accounts went directly to her mom, due to the estate planning they had set up. No court
process. No intervention. No conflict. Great!
But my colleague’s mom then never looked at the investments in those accounts. She just let
them stay as they were for four years, until finally, her daughters convinced her to look.
When they did look, they were mortified to find that, even though the investments should have
been gaining with the bull market we’ve been in for the last many years, the accounts had
actually decreased over the years from $100,000 to $60,000. If my colleague and her mom had
looked at these accounts and re-allocated them when grandma died, this would not have been
Fast forward to now, and the daughters think to 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.
Now is the time to truly understand what you have, and use it wisely.
Educate Yourself on Retirement Investments
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
If you need a referral to an advisor, or want us 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 your parents
have worked to build. If you need help figuring out how to best preserve these assets, we are
here and ready to support you.
At Jones Legal, P.C., 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.
We offer a Life & Legacy Planning Session™ to help you become more financially organized
than ever before, and make all the best choices for the people you love. Feel free to schedule a call with us.