How a San Antonio Financial Advisor Can Help You Navigate Life’s Financial Challenges

Like the road sign above, your life’s journey toward financial independence can be filled with numerous twists and turns. As your wealth grows, so do the complexities of planning your future and managing your assets. In particular, during the volatile market conditions, we’ve been experiencing lately. Navigating your financial journey requires a deep understanding of the various market conditions and the discipline to maintain a long-term investment outlook.

A partnership with a financial advisor in San Antonio registered as a fiduciary who respects your Judeo-Christian values could play a major part in your journey toward financial independence while emphasizing the values that matter the most to you and your family.

In this article, we’ll explore two important topics:

  • The importance of planning for the unexpected
  • Creating an investment strategy that reduces economic uncertainty

Are you looking for a new financial partner to help you navigate your retirement strategy in uncertain times?  Be sure to read our Quick Guide: Retirement Planning in San Antonio. 

Planning for the Unexpected

Planning for the unexpected is critical, especially as you get closer to your retirement date. This period in life can be filled with unexpected changes. Market volatility can produce these events that can derail even the most well-thought-out retirement plans.

A comprehensive retirement plan should reflect more than just your anticipated lifestyle and expected cost of living. It should also take into account unexpected events that may represent substantial expenses. Following are some planning solutions that are worth considering:

Building and maintaining a significant emergency fund is important to any prudent retirement planning strategy. This fund can help cover unforeseen expenses like major home repairs or medical emergencies. Keeping six months’ worth of living expenses readily available in a liquid account is wise.

As we age, healthcare costs tend to rise and can become a significant portion of our retirement spending. Plan for out-of-pocket medical expenses, long-term care costs, and insurance premiums. Consider options like Health Savings Accounts (HSAs), long-term care insurance, and Medigap policies to help cover these unexpected expenses.

The cost of living may be higher due to the impact of inflation. Your retirement plan should consider this to ensure a reduction in the purchasing power of your assets does not impact your standard of living.  This could mean investing a portion of your assets in investments with a better chance of keeping pace with inflation.

Your investment portfolio should be balanced according to your circumstances, risk tolerance, time horizon, and financial goals. As you near retirement, you might shift more of your assets to conservative investments to minimize your risk of large losses. However, you may want a growth component in your investment strategy to keep pace with inflation, withdrawals, expenses, and taxes.

Another risk is outliving your assets. To counteract this risk, consider strategies such as delaying Social Security benefits to increase the monthly payout, purchasing an annuity for guaranteed income, or investing a portion of your assets that may produce higher rates of return.

In addition to health, disability, and long-term care insurance, consider maintaining life insurance if others depend on your production of income. Other types of insurance may also protect you against financial losses.

Ensure you have updated legal documents, including a will, power of attorney, and healthcare directives. Also, consider the potential impact of estate taxes on your heirs.

Relying solely on one source of income can be risky. Consider creating multiple income streams in retirement, such as Social Security, 401k, IRA, personal savings accounts, rental income, or part-time work.

Finally, your plan should be flexible. Life changes, the economy, government policies, and the securities markets can be unpredictable. A regularly scheduled review and adjustments to your retirement strategy may be needed with your San Antonio financial planner.

When selecting a San Antonio financial advisor, consider hiring a firm that respects Judeo-Christian values like yours.  This type of advisor can help you sort through the complexities of real-life financial decisions in a manner that aligns with your ethical and moral standards. This alignment ensures your wealth is managed in a way that reflects your values and contributes to the life you envision for you and your family.

Creating An Investment Strategy That Anticipates Economic Uncertainty

Designing an investment strategy that anticipates economic uncertainty can be a complicated task, but it’s necessary to manage unexpected risks and seek opportunities for improved results effectively. Following are several elements that your investment strategy may include:

This is your number one strategy for reducing your risk of large losses. By allocating your investments across various asset classes (such as stocks, bonds, and income-producing real estate), various industries (technology, oil & gas, utilities), and geographic areas (domestic and foreign), you can reduce your risk of investment having a catastrophic impact.

Another tactic is to consider investing part of your assets in stocks that perform well during economic downturns (for example, utilities and consumer staples). People still need to eat and keep the lights on during periods of inflation and recession.

Government and corporate bonds have the potential to also offer stable returns. Bonds are generally less risky than stocks, and government bonds are often considered safe havens during economic uncertainty. TIPS (Treasury Inflation-Protected Securities) could also be a consideration. 

Keeping a certain percentage of your investment portfolio in cash or cash equivalents (Money Market, CDs, T-Bills) might provide a buffer in case of sudden economic downturns, increased market volatility, and other unexpected events.  Cash could also be a reserve used to exploit buying opportunities during down markets.

Dollar Cost Averaging is an investment strategy that is based on investing a fixed amount of money on a regularly scheduled basis regardless of market conditions.  The theory is that you get fewer shares when stock prices are higher and more when stock prices are lower. Overall, this reduces your average cost per share.

This strategy requires discipline, so you are buying shares in down markets.

Keeping yourself informed about economic indicators, global market trends, geopolitical events, securities markets, and others is important. Or you can delegate this responsibility to your San Antonio financial advisor.

Regular portfolio rebalancing is key to managing risk. For example, your desired asset allocation is 60% stocks and 40% bonds (a balanced portfolio). Over time stocks outperform bonds and your allocation of 75% stock and 25% bonds – a higher-risk portfolio. Rebalancing is returning that allocation to 60%/40% – a lower-risk portfolio.

Even though you have a plan for the unexpected, maintaining a long-term perspective is crucial. Your biggest risk is not the day-to-day fluctuations in the stock. It is a failure to pursue your long-term financial goals. It pays to remember; market fluctuations are a normal part of investing. Panic selling is an emotional response to market conditions. In a more disciplined environment, you buy when prices are lower. Your choice is to do this work yourself or hire a San Antonio financial advisor to do the work for you.  

At PAX Financial Group, we’re more than just a team of financial advisors.  We understand the importance of our role in helping our clients achieve their financial goals.

Our services extend to retirement planning and managing your investments, and we’re always ready to offer advice on insurance and personal finance needs.

Our Christian values guide us, and we believe in giving back to the people and places that have shaped us. We see you not just as a client but as a partner. We aim to work together with you, using an effective strategy that aligns with your values, to help you achieve what is most important and meaningful to you. We invite you to connect with us if you’re looking for a financial partner.

This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Biblically Responsible Investing(“BRI”) involves, among other things, screening for companies that fit within the goal of investing in companies aligned with biblical values. Such screens may serve to reduce the pool of high performing companies considered for investment. Investing involves risk. BRI investing does not guarantee a favorable investment outcome. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax, or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product and should not be relied upon as such.

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