So I'm sitting with a corporate exec the other day going over her 401(k). She's a middle-aged woman who definitely knows her stuff when it comes to finance and investments. She gives me all the usual data – you know, currently salary, current retirement savings value, annual contribution, expected Social Security, retirement date. I put it in the spreadsheet blender and – presto! – out comes the rate of return she needs from now until her last day of work in order to retire in comfort. I call this her "Goal-Oriented Target" and it is quite achievable – somewhere between 4 to 5 percent.
I'm about to move on to the next step when, out of the blue, the CEO of the company ambles by. He's what some might call a "ragged veteran" of sorts. He's seen a million-and-one investment advisors, hopping from one to another whenever the underperformance bug hit. No doubt familiar with all the tools of the advisor trade, he confidently asks the woman, "This is all fine and good, but how does this relate to your risk tolerance?" She politely smiles a respectful smile and says nothing.
I stop dead in my tracks.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
