BY SHANNON CLINTON
SUMMER 2010

As the economy dips and rises while clambering out of a difficult recession, those in their 50s, 60s, and 70s may wonder what, if anything, they should be doing with their money.

While investors’ personal circumstances vary, a few local money management experts revealed their clients’ priorities, concerns, and their own recommendations.

Mary Littrell helps clients perform a financial analysis to assess present and future financial needs, then refers them to trust, investment and brokerage service professionals. Littrell, who is a Central Bank vice president in private banking, said there’s no real difference in how these different age groups invest, but their concerns vary, and the market’s volatility can be unsettling. Older clients want downside protection of capital to preserve wealth, while younger clients have time to be more aggressive, she said. “What we do is spend extra care in trying to assess risk tolerance of the individuals,” Littrell said.

Even for conservative clients, those in all three age groups usually maintain at least 30 percent exposure to protect against inflation, she said. And, she recommends people rely on three professionals to help protect their assets — a banker, an accountant, and an attorney.

One’s finances ideally should be reviewed quarterly, she said, or at least annually, to see how stocks or certificates of deposit are faring, whether savings are reaping maximum earnings, or unnecessary fees are being paid.

“Then there are no surprises,” she said.

Your Options

James Larry Owings, a registered representative at Park Community Federal Credit Union, said that in light of the recession, many come to him with a stated desire to minimize risk, and he relies on their comfort levels and financial product preferences to determine the right destinations for their money.

“The biggest fear for most of my members is to not outlive their money they have saved for retirement,” Owings said. “That fear came to the surface rather quickly during this last major downturn.”

Alyce W. Weixler is a wealth management advisor and vice president at Bank of America Merrill Lynch in Louisville. She works with clients to identify, quantify, and achieve their financial goals through trusts, investments and financial planning that includes retirement and estate planning services.

Weixler said people in their 50s are usually in their highest-earning years, but may also be part of the “Sandwich Generation,” caring for their aging parents and their own children who may still be living with them due to the economy or other circumstances.

In this age group, asset allocations are typically 70 to 80 percent in stocks and 20 to 30 percent in bonds, Wexler said, but the risk-averse can seek products with equity-like returns that have guaranteed principal or insured investments.

A primary concern with this group, which includes Baby Boomers, is ensuring retirement assets will outlive them, with a needed focus on savings and asset growth. For this to happen, she said, the savings levels put into traditional savings and retirement accounts is key in one’s 50s, and if ignored, could cause a shortfall in the next two decades.

In one’s 60s, this focus on savings must continue, but it’s also a time to convert assets to 35 to 40 percent of desired post-retirement income, Weixler said. For the 70s age group, retirement income is being used and should be provided by a guaranteed income source such as Social Security, pension, and dividends or interest on an investment portfolio. Other goals at this stage may include travel, inheritance planning, or philanthropic designations.

Preparation Matters

Kathy Potts is Republic Bank’s senior vice president and regional manager of retail banking. Her banking center managers and personal bankers meet with clients to review money market, savings, CD and IRA accounts to ensure the clients’ needs are met. She said some clients include longtime married couples who are from a generation in which the husband always handled all the household finances and the wife may not know how to write a check, manage bills, or know about loan obligations. But both parties need to be educated about their finances, she said. “I always have them try to open up communications so they know their financial liabilities and assets,” Potts said.

Get Your Papers in Order

Potts also recommends clients put their important financial, insurance, and membership documents in a binder in a single location for easy retrieval for themselves or others. Also they should periodically review the binder’s contents and take an inventory of what’s there and what may need review or reconsideration. Potts said clients may consider a home equity loan to ensure they will qualify for one if the funds are needed, rather than finding out when it’s unexpectedly needed, they may not qualify. “I’m big about safety nets and being prepared,” she said.

Even if circumstances prevented clients from amply contributing to their investments at earlier ages — and some industry experts predict three out of five Baby Boomer generation retirees will outlive their assets — all is not lost, Weixler said.

“It’s never too late to start saving and investing,” she said.