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WHERE DO YOU WANT YOUR MONEY TO TAKE YOU TODAY?

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Special note: On October 3, 2002, the IRS released Revenue Ruling 2002-62 to help taxpayers preserve their retirement savings when there is an unexpected drop in the value of their retirement money. Those who began receiving fixed payments from their IRA or retirement plan under SEPP may now switch without penalty to a method of determining the amount of payments based on the value of their account as it changes from year to year.

GROWINGYOUR MONEY DURING RETIREMENT

Many people have asked me how my clients continue to grow their assets even though they are taking money out as income on a monthly basis. It’s simple, I tell them. It’s all in the way their accounts are handled. Generally, the younger a person is, the more risk they want to take, which means investing their money in riskier investments. That doesn’t mean that we are speculating with their money, but since they have a longer time before they are going to retire, they feel that they can invest in more growth and aggressive growth investments, which could provide them with greater growth over the long term. As my clients age, I move them from the riskier to the less-risky investments, keeping in mind their risk tolerance and goals. I’ve found that as we do this, the clients’ money has continued to grow, just at a slower pace. I don’t forsake the growth-oriented investments entirely, though. I’m just more apt to have more of the client’s money invested in bonds and cash or fixed investments. Plus, I continue to monitor their risk tolerance, so that the investments they are involved with are in keeping with their feelings.

There’s really no other secret than that. Of course, I always take my clients’ risk tolerance into account as I am managing their money. As my clients get older, their portfolios should adapt to their chang- ing needs. Some financial planners believe that if a client is older when he or she begins retirement planning, that the client needs to be invested more aggressively. To a certain extent that is true. However,

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