GreyWingFinancial.com Responds to the Notion of Diversifying Retirement Assets and Offers Tips to Do So Effectively
New York, NY (PRWEB) July 31, 2013 -- GreyWingFinancial.com responded to an article in CBS News, composed on July 12th and titled “Diversify the Sources of Your Retirement Income”, scrutinizing Steve Vernon’s suggestions regarding income diversification, offering readers tips to utilize Vernon’s advice effectively. Vernon offers several means of diversification, touching briefly on what each of these methods mean, and what they may involve. Additionally, Vernon provides a chart to demonstrate how these sources react to different economic situations.
Steve Vernon begins his article with an oft-heard phrase: “Don’t put your eggs in one basket”. He uses this as a segway into the discussion of diversifying retirement income. Vernon uses the reasoning that, because few if any individuals are able to accurately predict dips in the stock market, or even upcoming drastic economic changes, investing money in a wide array of arenas severely depletes the likelihood of losing money after retirement, and provides many avenues of receiving income—in any economic climate. He details three different types of retirement income generators (or RIGs): investment income, systematic withdrawals, and immediate annuity. The first type is connected to investments and collecting only the interest from the investment in question without touching the principal. The second involves stocks and bonds, and periodically withdrawing small portions of the principal, as well as interest. The final type is connected to investing with an insurance company, so that money is guaranteed. From there, he provides a table identifying the highs and lows of each type of income, corresponding to each economic situation (normal, recession, and high inflation). His table accurately depicts the importance of diversification; where one avenue fails in a recession, others succeed, providing the retiree with a source of income regardless of the current economic climate. Vernon points that out Social Security is virtually the only income source largely unaffected by the economic situation, and should be maximized whenever possible (generally by retiring after age 65). While it is possible to modify accounts to better accommodate economic changes, Vernon cautions that predictions regarding future economic changes are notoriously inaccurate.
Vernon offers a simple explanation of income diversification, familiarizing those who may not know much about the financial world with methods of achieving diverse income sources. His reasoning is certainly sound, and his advice follows the rules of common sense—though without advanced financial knowledge, it may not be immediately obvious to the average person. While Vernon’s advice and evidence are concrete, he provides little information regarding how to achieve diverse retirement income. GreyWingFinancial.com offers the following advice: first, consult with a financial planner. A financial planner will be familiar with various types of investments, and will be able to more accurately and more objectively pinpoint one’s financial position and needs. He or she may also be able to assist in other arenas, such as offering sources of auto and home insurance. Do not rely entirely on a financial planner, however; it is equally important to familiarize oneself with financial terms and possibilities—both to fully understand discussions with a financial planner, and to be able to spot any faulty information or suggestions made by a professional without the client’s best interest in mind.
Steve Vernon is a regular writer for CBS Moneywatch, as well as a contributing writer to other financial publications, and an author of two published works. He has over 30 years of experience working in the financial field, serving as an actuary before becoming a financial writer. He currently serves as a Research Scholar for the Stanford Center for Longevity, and devotes his time to assisting readers with retirement planning.
Steve Vernon published an article discussing the vitality of diversifying one’s retirement income. He demonstrates his point in constructing a table detailing the effect various economic situations have on different types of investments. Given his evidence, Vernon is correct in urging readers to diversify retirement accounts. GreyWingFinancial.com supports his conclusion, adding that it is important to consult with a financial planner, as well as familiarizing oneself with investment opportunities in order to develop a well-balanced, diverse retirement income plan.
Grey Wing Financial:
GreyWingFinancial.com is a website geared toward providing news and advice to both current and future retirees.
GreyWingFinancial.com, Grey Wing Financial, (512) 774-4739, [email protected]
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