Financial Empowerment Sessions: Retirement Planning in the US and Investing Basics

In April, we had the pleasure of offering to our community members two additional Financial Empowerment workshops in collaboration with Guardian Life. During these sessions, Guardian Life’s professionals offered new financial knowledge and tools for participants to navigate the retirement and investment systems in the US.

Our 2021 Financial Empowerment series, in collaboration with Guardian Life, has come to an end. This series allowed participants to gain basic financial knowledge, share their experiences in financial services, and dispel myths about the US financial markets. In March, we held two sessions about Consumer Credit and about Budgeting and Cashflow Management, while in April we talked about Retirement Planning and Investing Basics. 

Michael R. Acosta, CFP, Financial Advisor at Guardian Life, facilitated the third session on Retirement Planning. Lara Gillett, Assistant Vice President of Compliance Strategy, Stephanie Susens, Second Vice President and Legal Counsel, facilitated the fourth and last session of our Financial Empowerment series on Investment Basics. Ivette Quintana, Compliance Manager for the Advertising Review Unit, assisted Lara and Stephanie during this last session in moderating the discussion and directing questions to the facilitators.

All Guardian Life’s professionals emphasized that financial stability is unlikely without goal management – the two are directly related. According to Michael, “financial freedom means having enough savings, financial investments, and cash on hand to afford the kind of life we desire for ourselves and our families.” Before prioritizing, planning, acting on our plans, and closely monitoring outcome changes, we must first decide our goals. Without a clear objective, our path to financial success is difficult to map out!

Therefore, when managing our finances, we must keep in mind that everyone has their own, particular financial situation. Financial knowledge is power, but we only have that power if we understand knowledge from the perspective of our experiences and needs. Financial stability depends on our ability and willingness to focus on what we can realistically control as much as other spheres of our lives. 

Retirement Planning

“Due to my age, I am getting very worried about retirement as I do not know how it works here,” a participant said. Saving for ourselves means that we are not going to be an economic burden for our children in the future. “It is like safety procedures during a flight, I have to put my mask on before I can help anyone else,” said Michael. However, he also reminded participants that, “as long as we are not retiring today, we still have time to get organized and create a plan.”

When managing our assets allocation, Michael’s formula to long-term financial stability includes three pillars: Pay yourself first and commit to saving 15 to 20 percent of your annual gross income in a risk-free saving account; Build liquidity, which is determined by how quickly you can convert your assets into cash, and commit to investing 1 year’s worth of gross income in a non-retirement investment account; Make your retirement a priority from the moment you start earning. 

Investing Basics

“What are the main factors I have to consider when planning to invest?” asked a participant. “The first thing to consider is why you are interested in investing, what your goals are, what kind of risk level you would feel comfortable with,” said Lara. After explaining the concept of investing, Lara and Stephanie focused on the main factors one should keep in mind before starting to invest. Like every other aspect of cash flow management, investing requires an approach that depends on our personal circumstances and realistic expectations. In the field of investment, this premise mainly depends on our Risk Appetite.

Tailoring our investment strategy based on our Risk Appetite and asset allocation are keys to meeting our financial goals. But especially for beginners, facilitators shared an important recommendation: Diversify your asset allocation. “You do not need a lot of money to start investing, but be careful where you invest it,” said Stephanie. It might be a good idea to invest in diversified mutual funds, which are pools of money from many different industries and categories. If the stock market goes down, not every single part of the fund is likely to lose money. Target date mutual funds can be a good choice for investors who are saving for a particular retirement date. These funds are managed to focus on more conservative investments as the retirement date approaches. The professional fund managers aim to maximize returns by investing in different stocks that generally react differently to the same event. 

“Thank you for organizing this series,” a participant said. “It was extremely informative and the facilitators were able to deliver their message with a simple and clear vocabulary.” 

Throughout our 2021 Financial Empowerment series, we have learned that financial knowledge is not enough to financially succeed. We also need to understand it through the lens of our personal experiences, adapt it to our approach to life depending on our needs and goals, get organized, plan in advance, and most of all, prioritize ourselves. After all, success is not measurable in terms of money and the path to success is not the same for everyone. We only truly succeed when we accomplish our own purposes.