Expert Interview with Jack Waymire on Retirement Planning

Retirement planningJack Waymire noticed one day that there was plenty of advice on choosing a financial plan, but not nearly enough on choosing a financial planner. That inspired him to found Paladin, an educational site about finding a competent and ethical planner. He spoke with us about the challenges of retirement planning.


How has retirement saving changed in the last few years?

More people are aware they do not have enough assets to retire when they want to and live the way they want to. Those that can are saving more than they did in the past, but they have to dig their way out of a big hole to make up for low savings rates in previous years.


Is it ever too late to start saving for retirement?

It stands to reason it is never too late to start saving. Better late than never. But, it can be too late if a person has a specific retirement date and standard of living that has to be funded primarily by retirement savings. Late savers should be thinking about deferred retirement dates and drastically reduced living expenses.


What should younger workers be thinking about when it comes to retirement? How far ahead should they be planning?

The sooner they start saving, the sooner they start benefiting from compound rates of return. This is greatly enhanced if they participate in a retirement plan with matching employer contributions. Not participating is like throwing money away. Savings is a habit. The sooner they start accumulating assets, the better.


Have the risks in saving for retirement changed at all?

Yes. Some people are taking more investment risk to make up for low savings rates and inadequate assets. Another year like 2008 will have catastrophic consequences for them. Years like 2008 are inevitable due to the cyclical nature of the markets and Wall Street excesses. There are no easy answers. Increased risk has always been a two-edged sword.


What should somebody concerned about the stock market do to save for retirement?

Bonds have historically low interest rates. After deducting inflation, CDs and money market funds do not even produce positive returns. People should be looking at alternative investments that have reasonable risk and expense characteristics. Watch out for scam artists. They know current and future retirees are seeking higher returns. If it is too good to be true, it is not true.


What trends in financial planning should we be keeping an eye on?

Robo advisors and planners deliver market rates of return using Exchange Traded Funds and Index Funds. They deliver these results for reduced risk and expense. Some planners also provide passive money management services for lower risk and expense. People should look at these services as an alternative to active management that has higher risk and expense characteristics.

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