Summertime is here. The 4th of July holiday weekend just passed, and the long, warm months of July and August stretch before us.
If you’re not already on vacation, chances are that you have something planned between now and Labor Day.
Of course, “vacation” means something different today than what it meant 20 years ago. More and more it seems that we can never truly switch off — either from work, or just managing the many demands that press upon us each day.
One of those demands is retirement planning. Earlier generations of Americans didn’t worry about their retirement as they prepared to head to the beach or the mountains. They had the comfort of knowing that there would be a nice pension waiting for them … along with the gold watch their lifelong employer gave them upon retirement.
But that was then. Now we all have to be investment experts, and that can be intimidating. Don’t let it ruin your fun in the sun. Here are some ways to manage your finances while on vacation.
Take Care of the Big Decisions
Vacation is not a time when you want to be opening new accounts, or shifting assets between taxable and non-taxable accounts, or rethinking your entire asset allocation strategy. Those things take time, concentration and perhaps in-person dealings with your financial institutions.
So take care of any remaining big ticket items ahead of time. Make sure your allocation strategy is up to date, that your 2014 rebalancing is done, and that your accounts are invested optimally for tax purposes. This means ensuring that your more interest-sensitive assets are concentrated in tax-advantaged accounts like your 401(k) or IRA.
If you don’t have a retirement-specific account, now would be a perfect time to start. Retirement should be your most important long term goal. Make sure you give it the attention it deserves.
Before you get on the road to your vacation destination, take the time to do the paperwork and get yourself to a better state of retirement readiness. You’ll relax more when you’re at the beach, knowing that this “big item” is under control.
Sync Up…
Fortunately for those of us who like to stay connected while we’re away, technology can help a great deal.
Most financial institutions, online investment services and financial media outlets, have apps that can keep the necessary information at your fingertips.
This is particularly important if you’re going to be away for a long time and you’ll need to make important portfolio decisions. Set yourself up according to the information you think you will need.
…But Relax and Have Fun
By all means stay informed with what’s going on in global asset markets, and check in on your portfolio every now and then. But don’t overdo it.
Even in our always-on world, vacation should be a time to enjoy yourself and spend quality time with loved ones. Chances are good that your long-term investment goals will survive a couple weeks in which you mostly check out.
If you want to use your vacation time productively, bring along some reading material to educate you on how to be a more effective investor. A good summer beach read could be Burton Malkiel’s “A Random Walk Down Wall Street.” This timeless classic is readable, humorous and informative.
If you’re feeling adventurous, check out “Thinking Fast and Slow,” Nobel laureate Daniel Kahneman’s presentation of the systematic behavioral traps humans fall into when making financial and economic decisions.
Make Plans for the Fall
Before you know it, summer will be over and it’s back to work, back to school and back into the rush of preparing for the year-end holidays.
It’s now a good time to get a start on mapping out the financial priorities that will demand attention before the end of the year. These might include tax planning (gains and losses harvesting), re-allocating your portfolio weights if you need to bring them up to date with your current life-cycle phase, and re-considering your monthly spending versus investing budget.
Investing for retirement can be intimidating, but it doesn’t have to be if you tap into the right resources. Jemstep is an online service that provides comprehensive, expert advice around all aspects of the retirement planning process, customized to your specific financial situation, goals and risk tolerance. Let Jemstep help you stay on top of your finances while still enjoying all that the summer season has to offer.