Three Tips for Good Financial Health

Most of us take the time for yearly physical exams to make sure our body is healthy. We watch what we eat, take the stairs or go on daily walks, and we try to get the recommended hours of sleep.

But, how often are we looking at our financial health? With the market near all-time highs, many people wonder what they should be doing with their investments. It is always a good idea to look at the types of investments or the structure of your portfolio on a regular basis to make sure that you are on track with your financial future.

Here are three tips to make sure that your financial health is in order.

1. Measure and assess your risk tolerance.

You need to understand the risk in your portfolio. How long has it been since you evaluated or rebalanced your investments based on your long-term or retirement planning needs? If you haven’t measured or rebalanced your portfolio in a while, you may find that you are way too aggressive as you approach retirement. In the long-term, the stock market is an appropriate place to invest if we take an appropriate amount of risk. Trying to time when a bull or bear market will happen is impossible. However, measuring the historic data of your portfolio can be a pretty good predictor of future risks in a portfolio*.

2. Secure your cash needs for the next five years, at a minimum.

In your younger years, this is an emergency fund. As you approach and are in retirement, this is income planning. Your monies that you need in the next five years of retirement should not be invested in the stock market. There are other, less risky ways to grow income that you need for the next five years in retirement. You need money to live on that won’t be as susceptible to the ups and especially the downs of the stock market.

3. Develop your financial plan to achieve specific outcomes.

We don’t invest just to make money. We invest for specific outcomes. In your younger years, you might have saved and invested to buy a home or help pay for college. What are your goals in retirement? Travel, living closer to grandkids, or living independently? Regardless of what it is that you are investing for, you need to invest to achieve that specific outcome.

At Brogan Financial, we help you develop a financial plan with specific goals in mind, and then build that plan around achieving those goals. Everyone’s retirement goals are unique. So, every retirement plan should be unique.

*Past performance is not a predictor of future performance.