Dio-Employees Video June 2020

1.       Intro and Market Overview

Matt: Hi everyone and thanks for joining us today, we have a special edition of CG Insights for you. This video is all about answering your questions about the retirement plan and preparing for retirement.  So the format will be more Q&A with Lisa Adamson, Senior Registered Client Associate from our team joining on as well. Most of you know Lisa as a regular visitor at your locations and your point of contact for any plan-related questions. 

2.       Lisa: Thanks Matt, so we’ve put together a list of the questions that we get the most from you all, about the retirement plan and making sure you’re on track for retirement.  Our hope is that many more of you have similar questions, we want this to be a helpful resource, but you can always reach out to us directly.  So with that let’s get started!

Q&A Dialogue:

a.       Lisa: Ok, the first questions is about contributing to retirement in a time with so many unknowns, like today. With all this uncertainty, should employees stop contributing to their retirement (403b’s)?

Matt: You know we get this question pretty regularly, because it’s very uncomfortable when there’s a lot of uncertainty in the markets, not knowing where the economy is headed and so forth. Today we seem to be bombarded by all that’s wrong in the world with very little to be hopeful about. Investing your hard earned dollars may seem like a bad idea; why not just wait until the dust settles and then start my contributions back up again?

Let’s go back to why you started contributing in the first place: to have a better retirement picture, right? Part of the process of regular contributions is that they stay regular, to the best of your abilities, in both good times and bad.  Although it’s easier in hindsight to say when you would have stopped and restarted your savings, in practice it’s nearly impossible to do very well. Plus, when things get bumpy you have the ability to buy things at a discount. Think of it like a savings discount for your retirement! By maintaining your regular contributions, you’re buying quality investments at a discount, which may actually improve your retirement picture.  So unless you’re situation or strategy has changed, we would advise you not to stop your contributions, and if you can, consider even increasing them.  We’ve faced many challenges throughout history and have typically emerged stronger and better after the test.  Volatile times are an opportunity to make sure your investments are in-line and adjust accordingly.  And if you need help putting a strategy together, give us a call.

 

b.       Lisa: So the next question is: since my account value has dropped, do I need to wait longer to retire?

Matt:  As I mentioned earlier, in times of market stress it’s generally best to ride out the storm and not make drastic changes.  Historically the worst case scenarios don’t come to pass and the rebound happens quicker than most expect.  Depending on when you’re retiring and what your strategy looks like, will determine if you need to make changes like when to retire etc. But, it’s always good to check up on your strategy, even more-so during volatile times.  If you haven’t reviewed your plan, then talk with us about how to do that.  Lately the markets have bounced back faster than most expected so you may not be that far off track (or maybe not off at all).  A good strategy is balanced with some buffers and/or protection piece in place to help in times like these.  The typical buffers like bonds and some alternative-type investments have generally held up very well in this environment.  Even though your account value has dropped doesn’t necessarily mean your strategy is out of whack; down periods are inevitable.  But we can help you review to make sure you’re still on track.

 

c.       Lisa: What should I be doing now to help my retirement picture?

Matt: You are all probably tired of hearing this from us, but if you’re not contributing to the retirement plan, start today! If you are contributing, try to increase the amount, again you can always adjust and you may be pleasantly surprised that the net effect on your paycheck may not be as bad as you expect.  Each extra dollar goes a long way, and this chart highlights that. You don’t necessarily need to invest aggressively for the effect of compound interest to take hold and the benefits could be tremendous.  No one knows for sure what the future looks like, especially in retirement, but that doesn’t mean we can’t prepare.  And for us at The Cottonwood Group, that means having more choices to handle unforeseen expenses and events.  Healthcare costs and retirement living expenses are likely going up not down, so give yourself extra cushion so you can enjoy retirement and not worry about making ends meet.

 

d.       Lisa: The last question is for those of you leaving your present position: If I’m changing jobs this year, what are my choices and should I be doing anything?

Matt: The first thing we recommend is contacting Lisa, and we have her contact info on this page for you.  If you want to transfer your account, withdraw funds, rollover to an IRA type account or just review your choices, contact Lisa before doing anything, regardless.  We can help facilitate whichever direction you choose, especially if it involves moving your funds to a new retirement plan.

 

3.       Conclusion:

Matt: Well thank you all for joining us today and hopefully this was worthwhile and informative.  We’ll be rolling out a new video-meeting schedule for employees to “meet” with us remotely, discuss their retirement strategy and get some advice from our team.  In these uncertain times we want to be as proactive as possible to make sure you feel confident and on track towards a successful retirement. Plus that will allow us to reach more of you than we would be able to otherwise.  If you have any questions or concerns, please do not hesitate to reach out to us.  We’re here for you, as advisors and implore you to utilize our team as a resource.

 

Thank you for joining us today and stay tuned for more insights!

 

 

Wells Fargo Advisors did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is not a guarantee of future results.

Investments in fixed-income securities are subject to market, interest rate, credit and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline in the bond’s price. Credit risk is the risk that an issuer will default on payments of interest and/or principal. This risk is heightened in lower rated bonds. If sold prior to maturity, fixed income securities are subject to market risk. All fixed income investments may be worth less than their original cost upon redemption or maturity. Alternative investments, such as hedge funds, private capital/private debt funds and private real estate funds, are not suitable for all investors and are only open to “accredited” or “qualified” investors within the meaning of the U.S. securities laws. They are speculative, highly illiquid, and are designed for long-term investment, and not as trading vehicles. There is no assurance that any investment strategy pursued by the Master Fund (and thus the Feeder Fund) will be successful or that the fund will achieve its intended objective. Investments in these funds entail significant risks, volatility and capital loss including the loss of the entire amount invested. They are intended for qualified, financially sophisticated investors who can bear the risks associated with these investments. Investors should read the fund’s offering documents prior to investing. Please keep in mind that rolling over your qualified employer sponsored retirement plan (QRP) assets to an IRA is just one option. Each option has advantages and disadvantages, and the one that is best depends on your individual circumstances. You should consider features such as investment options, fees and expenses and services offered. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with a QRP. We recommend you consult with your plan administrator before making any decisions regarding your retirement assets.

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