My Financial Plan Has Been Derailed. What Do I Do Now?


You’ve got to take the time to review all of your financial assets in order to assess the damage. It is only through knowledge that you can move ahead to shore up your losses and plan for the future.

1. Assess your damage. Don’t be like an ostrich – with your head in the ground. When significant changes happen in the markets like we have seen in the last few months, it is critical to review your retirement plans to see what may have changed, good or bad.

2. Get on a budget. Belt-tightening should be your new plan of action. Put pen to paper and closely examine your monthly expenses. See what can be eliminated, like too much dining out, and what can be placed on hold, such as the purchase of that new computer.

3. Monitor your money. With the creation of 401(k) & 403(b) plans, many people have been passive partici- pants who have not learned the importance of reviewing their portfolio and making timely adjustments. You should look at your 401(k) or 403(b) and stock portfolio as fluid, not fixed — review them for diversification and rebalance on a periodic basis (typically annually).

4. Reduce your debt. Playing the credit card game or using your home equity line of credit can be a danger- ous move. Remember that “cash is king” and when possible, pay for what you need by cash not credit. And better still, eliminate any unnecessary spending. Start living within your means if you haven’t already done so.

5. Plan for the worst. With the unemployment rates continuing to soar, the rule of thumb has always been to try to save an amount equal to at least six months of living expenses. This is not 401(k) money, since there are penalties to withdrawal from 401(k) funds. This is just a regular savings fund or money market fund that is easily accessible without penalties.

6. Set short-term financial goals. Be optimistic. Our country has weathered recessions before and those who have reset their financial goals have been ready for when the economy moves into positive territory. So, instead of burying your money in the back yard, decide what percentage of your money you feel comfortable keeping in cash and the remainder, consider diversifying into different investments.

7. Set an investment strategy. Despite what seems to be an ongoing stream of negative news from the various media during the last 18 months, the stock market, like the economy, should eventually improve. Maintain a diversified approach that includes mutual funds, annuities, stocks, bonds and cash. It may be smart to follow Warren Buffett’s advice: “Buy when Investors are fearful, sell when Investors are greedy.”

8. Hire a financial planner. A good financial planner becomes your trusted “primary advisor.” They provide business, legal and insurance services, as well as organizing, securing and simplifying the financial part of your life so that you can spend the rest of your time doing what you value most.

9. Consider a reverse mortgage. Tough times require wise choices. For seniors, a wise choice may be to convert your home equity into a reverse mortgage, which is designed to allow seniors to transfer part of their home equity into tax-free income. Visit and for additional information.

10. Take action. Work on the plan that you’ve established and never give up. Remember, “Consistency will always outperform occasional brilliance.” The hardest part of getting something done is getting started – just do it!

Securities and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment advisor. Insurance services offered through Szarka Financial, which is not affiliated with FSC Securities Corporation.


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