“I always say I couldn’t afford ‘Elizabeth,’” laughs Beth Rosenwald, founding partner of nearly two-decade old Pikesville- based wealth management company The Rosenwald Team.
Having been “in the business” for the past 28 years, though, Rosenwald knows what it takes to afford and save for an ample retirement.
She first of all agrees with the rather current trend of making sure to take care of one’s retirement plan before saving for college, generally. For most people, it’s better to make sure they are taken care of first so that they don’t end up with highly-educated children … upon whom they’ll be a burden later in life.
“You have to make sure that the consistency of the retirement plan is there,” Rosenwald continues. It’s crucial, she feels, to keep at one’s retirement plan, even if it’s something as simple as putting aside a specific amount every month (which, she understands, may change somewhat depending on one’s life circumstances).
But it’s that consistency of making sure the money is put away each and every month, if that’s one’s simple plan, which is so important.
It’s Rosenwald’s job to work out whatever that consistent and smart plan might be according to said individual philosophy.
“It’s kind of fun,” Rosenwald says.
Joshua A. Scheinker, partner at Scheinker Investment Partners of Janney Montgomery Scott LLC, founded by his father, worries that young people in particular may not know the best ways to save and invest when it comes to integral future plans such as retirement.
“They’re reacting and not thinking about their future as a whole,” Scheinker, who’s been working at his firm for the past 20 years, says.
“It’s an interesting thing for me,” Scheinker continues, “because not only do I deal with high net worth people but also a lot of ‘normal people,’ as well. And helping them save for retirement is hard because it’s enough just trying to pay your bills.”
Scheinker says the power of systematically investing into retirement accounts such as 401Ks on a pre-tax basis is “huge.”
“The fact that during each pay period, you’re putting money into a plan coming right out of your paycheck is important,” Scheinker says. “You’re creating wealth all along in a ‘forced manner.’”
Scheinker’s in concert with Rosenwald that a wealth manager such as himself can be of assistance, especially for those “normal people” whose net worth might be under $500,000.
“What I do is sit down with their attorney, their accountant, learn about their family situation: inheritance, planning for money for kids,” Scheinker says. “So much goes into it. That’s why everyone should be working with a professional and not a ‘robo-advisor.’”
Chad Meyer, president of Cockeysville’s Tufton Capital Management, put it simply, “What we recommend for someone looking to save for retirement is a balanced portfolio of stocks and bonds.”
Meyer did say that having a portfolio of individual stocks is a good idea, particularly if “you luck out over the long term, the stock market [can be] the best way to build wealth.”
But it’s also impossible to “time the market,” as he put it, and noted that in reality, luck has less to do with doing well on the market than buying and holding good stocks, which is a lot of what he helps clients work on.
While one has a regular salary in his younger years, growing wealth is important and more risk can be taken in later years, Meyer notes. Hence this is a time that more stocks in one’s portfolio makes sense. But as one’s income becomes fixed in retirement, this is when bonds might be a better choice.
All of this, in the end, “depends one’s age and proximity to retirement,” says Ryan Lenet, senior vice president of wealth management with the Zolet Lenet Group at Morgan Stanley.
When you’re younger, put away whatever you can,” he says. “As you get older, it’s best to be more disciplined and detailed.” Once someone enters his 50s or 60s, Lenet says, he should make sure to have such a detailed financial strategy that includes a retirement plan as a kind of “road map as far as how much they’ll need to put away to make it happen, whatever their goals are.”