National Retirement Planning Week

Past Now Future

You may know that April is Financial Literacy Month. What you may not know that last week was National Retirement Planning Week. While the whole month’s focus is to increase your knowledge (read: literacy) when it comes to all things financial, this past week was laser focused on retirement planning.

The merits of these are debatable (if you didn’t know they exist, what good are they doing?).  One thing is certain, we need help in these areas.  Survey after survey indicates that Americans aren’t saving enough for retirement.
How can we realize this enough to answer the survey but not enough to do anything about it?
It’s Abstract
Retirement is “over there”.  It’s somewhere off in the distance.  Is it 59 1/2 or 65 years old?  Who knows.
It’s difficult to commit to saving money now for an ambiguous concept down the road.  Humans are fantastic are registering immediate responses.  Just see how long you can keep your hand on a hot stove.  But we’re not so great at delayed gratification, which really is what planning for retirement is about.  How well do you want to live after you stop working?
Here’s the trick: as you begin planning your retirement, it becomes less abstract.  You start realizing how much you could save and what that means for your standard of living.  Once you have the numbers, you start dreaming about the vacations you want to take and items to cross off your bucket list.
It’s Complicated
Unfortunately being abstract isn’t the only roadblock to retirement.  There are lots of ambiguous terms like 401(k), Roth IRA, Mutual Funds, Bonds, Compound Interest, Taxes.  That is a lot going on.  There are different vehicles for your plan as well as a variety of ways to fund them.
It is important to balance two sides of the same coin.  One, understand that you don’t have to know it all.  Meet with a fee-only financial planner and investment advisor that has access to more information than you.  In the multitude of council, there is safety.  Two, don’t invest in anything that you don’t understand.  Identify professionals that have the heart of a teacher that are willing to coach you into understanding your options.  You don’t have to know it all to begin with, but this is your retirement. You need to know what you are doing when you begin putting your money into something.
It’s Important
You don’t want to work your whole life.  Or, at the very least, you don’t want to have to work your whole life.  Do you want to travel?  Do you want to leave your family an inheritance?  Do you want to donate money to charities and worthy causes you believe in?
Whatever your personal drive, find the motivation to start your retirement planning now.
(This is the latest post from Upperline Financial Planning intern Trevor Acy)

H. Jude Boudreaux Listed Among Top Financial Advisors for Doctors for Second Year in a Row


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We at Upperline Financial Planning are proud to announce that H. Jude Boudreaux, CFP® was recognized by Medical Economics Magazine as one of the Top Financial Advisors for Doctors again in 2012!  We are humbled by the honor and work hard every day to be worthy of the recognition.

We are proud of the company that we are building here, and would like to welcome you to contact us if you’re interested in learning more about our unique approach to financial planning.


Financial Rules of Thumb Series: Invest No More Than 10% of your Total Savings in Employer Stock

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This post is part of the Financial Rules of Thumb series. Check out the rest here!

(Today’s post comes from Trevor Acy, an Upperline Financial Planning intern)

Some companies offer great deals for employees to invest in their company stock.  While it’s not exactly too good to be true, there are definitely risks you should be aware of.

The Upperline: Diversification is important. Having too much investment tied to the same place your income comes from can be risky.

It’s tempting, I know.  They’ll give you a match or a discount to purchase company stock.  There is nothing wrong with taking advantage of those options.  We strongly recommend that you guard yourself against putting too many of your eggs in one basket.

Single stocks are riskier and even more so if it is your company’s stock.

Single stocks mean you are relying on the performance of one company to earn dividends and interest.  If that same company pays you too, you run the risk of losing your investment and your job.

One day, you will no longer work for that company.

You are going to find another job or retire, they are going to downsize you, or you will die.  You know your job is not going to provide an income for you and your family forever.  You will have to rely on different sources of income at some point which should involve your investments.

If your company goes bankrupt and you’ve invested heavily in their stock you’ve just lost your income and your investments.  That’s not a good one-two punch.  Take the match or the discount, but don’t overload your investments in your own company’s stock.

Make sure you are spreading yourself wide enough that poor performance from any one investment doesn’t derail your financial goals.

How can you take advantage of employer stock benefits and remain diversified?

  • Choose diverse options in your 401(k) plan.  Your company likely offers 20+ investment choices on their retirement plan lineup.  Choose low-cost, well managed options that cover the broader market and fixed income landscape.
  • Diversify away from employer stock as soon as possible.  Every plan I’ve looked at has different timing restrictions on how long you must hold the employer stock.  Familiarize yourself with the rules of your plan and put a reminder in your calendar to move funds from your company stock to your diversified investment choices on a regular basis.

What questions do you have about your personal investments in employer stock?


Save for Retirement Before Saving for a Child’s College Education

Saving for Retirement and College

This post is part of the Financial Rules of Thumb series.  Check out the rest here!

(Today’s post comes from Trevor Acy, an Upperline Financial Planning intern)

This rule of thumb can trigger emotional response. It may seem selfish to begin your retirement savings without putting money toward your kid’s college education first. You want to do right by your children, but it is important to right by yourself too.

The Upperline: If you pay for your child’s college but haven’t saved for retirement, you’ll be depending on them or government care in your golden years. Retiring with dignity should take priority over college savings.

This is a rule of thumb that I agree with.  I want you to be able to save for your child’s college, but you should start your retirement savings first.  Both of these are important reasons to save.  College may seem more urgent since your child isn’t getting any younger and it is easy to delay retirement saving “until later”.  A key to retiring with dignity is taking advantage of the power of compound interest.  The best way to do that is to start saving for retirement as soon as possible.

It is ultimately their responsibility for their education. Your responsibility is your retirement.

Having their parents pay for college isn’t their only option.  Scholarships and grants exists for a reason.  They can work to pay their tuition (did you know that college students that work actually make better grades? See this NYTimes article on a study by Laura Hamilton for more on that topic).  They can also start their education at a community college to get credits for core courses at less expensive tuition rates.

We don’t want to encourage students to go into debt for their education. The number one reason people drop out of college is due to debt, not grades (see this great infographic for other reasons).

One note from Jude: Student loans can be a useful tool, but we have seen clients burdened with what amounts to a mortgage payment for their college educations.  Using debt is always about making smart choices, and it’s important to make good choices bout the potential return one can expect on borrowing money for college.

Doing both is great, if you can afford it.

Let me be clear that your goal should be becoming financially capable of saving for retirement and college.  If you are able, these two should be done concurrently. But while you are working toward that goal, your retirement takes priority over college savings.  Don’t forfeit your retirement in order to be a blessing to your child now only to become dependent on them later.  Refer to our post on how much to save for retirement and if there is more discretionary money to spend then you can begin funding an Education Savings Account (ESA) or 529.

We will cover education saving vehicles in an upcoming series, but be wary of using the following for college savings:

  • Insurance
  • Savings bonds
  • Zero-coupon bonds
  • Pre-paying tuition

These do not provide maximum growth or keep up with inflation well enough to be a good savings vessel especially when ESA and 529 plans exist.

What are your questions about saving for college?  Let us know and we may answer them in a future post!