Happy New Year credit union member!!
The following is an interview that I conducted with Rocco Rugnetta, one of this credit union’s trusted partners. So if you’re retired, ready to retire or just planning towards the future, this short transcript may help answer some questions that you may have.
How long have you been in business?
I have worked in the financial services industry for 23 years and I have been at Merrill Lynch Wealth Management for over 13 years.
Why should I have a professional handle my finances as opposed to managing my investments myself?
A professional can help you develop and stick to a plan. He or she can also assist you in managing your investments according to your goals and in line with your risk tolerance. Furthermore, a professional will guide you during market volatility and discourage you from making emotional decisions.
What do you mean by emotional decisions?
Fear and exuberance are two common emotions associated with investing. Severe market volatility can cause one to be fearful of losing their money. On the other hand, a strong bull market can lead people to believe stocks only go up and you can get rich. These emotions are powerful and often influence a person’s decisions. A professional will help you be objective and understand market conditions so you can make decisions that are objective and based on your goals.
Have you ever worked with one of our members?
Yes. I have a client who is a member of the credit union. I actually just helped him and his wife with an investment strategy a couple of months ago.
Are you familiar with TSP?
Yes. I am familiar with the plan and its features.
Do you have one piece of advice you can give our members?
The best advice I can give is to save for retirement and take advantage of your employer retirement plan as soon as you become eligible. I also recommend gradually increasing your contributions to the retirement plan each year until you reach 12% to 15% of your pay. You may be able to raise your contribution amount every time you receive a pay increase.
Why should I contribute to the TSP when I am going to get a Pension and Social Security?
Your pension and social security together will not equal the amount of money you make while you are working, especially if you work overtime. Saving money in the TSP will enable you to accumulate assets you can use at retirement to create a second pension.
Should I get conservative with my investments as I get older? I was always told I should pull my money from stocks as I get older because they are too volatile?
It makes sense to reduce risk as you get closer to retirement. However, I caution against getting overly conservative with your investments because you have to plan for a long retirement and, thus, you need your money to grow during retirement. Stocks can be risky in the short-term but offer significant growth potential over the long-term.
How long before retirement should our members contact you?
I think it makes sense for your members to start working with a financial advisor at least three to five years prior to retirement. A good financial advisor will help members approaching retirement do a retirement analysis to determine if they are on track to achieve their retirement goals; i.e. retire when they want and maintain their standard of living. If they are not on track, your members will then have time to make adjustments to try to improve their prospects.
How can our members contact you?