(Please be aware that the following information is part professional opinion of our financial advisor, and part decisions based on our personal financial situation. In no way should this be considered expert advice on which to base your own financial decisions.)
We just had a quarterly call with our financial advisor (I’ll refer to him as J.S.). As always, we look at our current situation, the performance of our investments, our future needs, and the outlook of the economy. I have to say that this session wasn’t as upbeat as some we have had, although we still have confidence in our plan.
Many indicators have bounced around in 2010, but J.S. anticipates that we may have a little positive “pop” at the end of the year. Expected tax increases (or the lapsing of the Bush tax break) will likely cause tax-free municipal bonds to become more popular. Investing in municipal bonds carries some risk – municipalities could conceivably default on their bonds. But the yield from our municipal bond investments is running at about 6%, compared to about 1% for safer U.S. Treasury Bonds. It’s a calculated risk.
After buying the house in Prescott, we will be dual home owners for from one and a half to two years, with increased expenses. We’ve asked J.S. to help us look at our cash flow (income) needs between 2011 and when Social Security kicks in. We sent him our Social Security Statements and the payout info from my Hilton Pension. He’s hoping to find a way to keep our investment principle intact until we are in our 70’s. (As an aside, read your Social Security Statement. This is in black and white, “In 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits.” Depending on your age, you may need to consider this looming issue in your financial plans.)
It’s still really important to plan for your financial future, and we believe it helps if you have a knowledgeable and trusted financial advisor. Ours has come up with some ideas and plans that we might not have unearthed ourselves.
What have you done on your plan lately?