Income Planning Specialist Michael Davis, of Davis Financial Services, Inc., Reveals Retirees’ Most Common Mistakes and the Surprising Secrets to a Successful Retirement

Jacksonville, FL – February 20, 2013 – Do you know how money works? You might think you do. You make it, you spend it, and you’ve hopefully been saving it, maybe even investing it. But do you know how it works – and most importantly, how to make it work for you? This is Michael Davis’ specialty. As a well-known financial educator, income planning specialist and CEO of Davis Financial Services, Inc. in Jacksonville, Florida, his retirement planning workshops attract hundreds of retirees all looking to learn the answer to that question.

According to Davis, the secret to making money work for you doesn’t start with earning a large paycheck – it starts with knowing how to keep it. As too many retirees have learned, you can make thousands upon thousands of dollars just to see those hard-won earnings disappear in a market crash, like in 2008. Davis has been advising clients on how to avoid making costly mistakes for over 30 years. He says he sees retirees make the same mistakes over and over – he’s even made a list.

Mike Davis’ 7 Common Mistakes By Retirees

  1. Investing as though you’re still working.
  2. Not protecting yourself from significant financial drops.
  3. Not guaranteeing your basic income needs.*
  4. Not paying attention to your portfolio costs.
  5. Not thinking about taxes.
  6. Thinking your IRA is a good account during retirement.
  7. Believing you need total liquidity in retirement.

Retirees are urged by nearly everyone, except perhaps brokers, to switch from a mindset of accumulation to preservation. Davis recommends following the “Rule of 100” to ensure savings are never entirely at risk:  Take your age, subtract it from 100, and that is the percentage of your assets you can invest on the market with relative safety. However, the “Rule of 100” is just a guideline, and retirees’ first priority must be to cover their basic, vital expenses using income streams that are as reliable as social security checks. “Retirees should invest in vehicles that provide a steady income they can’t outlive, just like pensions used to do,” says Davis.

Davis says one of the most significant challenges today’s retirees face is what will likely happen with taxes in the coming years. “Taxes affect everybody. Taxes and inflation are the two major obstacles to ensuring a lifetime income. The number one thing on peoples’ minds is running out of money, and that’s why we make sure our retirement plans are tax efficient, first and foremost,” he says. Clients who consult with Davis often find that they lower their tax bills, help reduce their taxes on social security income, increase their estates and obtain better protection for their financial futures. His secret?  An approach that gets rid of tax-inefficient holdings, like IRAs, and substitutes them for carefully chosen annuities.

The newest annuity to hit the market – the hybrid annuity – is Davis’ favorite. He says the hybrid can be a help to “retirees who are trying to live off of CDs, which don’t provide enough income in a low-interest environment.” They offer growth potential that is linked to several indices such as the S&P 500 and have a principal guarantee, which means hybrid annuity holders literally cannot lose money provided they don’t surrender their contracts during the surrender charge period and incur surrender fees.

“Most of my clients have one thing in common. They have enough money to live out a comfortable retirement as long as they don’t lose it. Over the years we’ve taken great pride in helping our clients hold on to what they have. I’m kind of selfish I guess, because when my clients are sleeping good I am also sleeping good knowing they’re not losing money,” says Davis.

*Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claimspaying ability of the issuing company and are not offered by Global Financial Private Capital.

Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor.

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