Credit union shares how to reevaluate investment strategies during, after pandemic

PORTLAND, Ore. (KTVZ) -- More than a year after the pandemic sent the world into lockdown, workers and retirees remain concerned about the long-term impact of economic shifts on their retirement and investments.

A recent report from the Transamerica Center for Retirement Studies finds that one in five U.S. workers are worried about their ability to retire in light of the pandemic—of which only 27 percent are confident in a comfortable retirement. 

OnPoint Community Credit Union is educating the communities it serves on investment strategies and principles that may guide long-term stability.

“It’s clear the pandemic has shaken people’s confidence in money management and their long-term financial well-being,” said Daniel Bartosz, Financial Advisor, Raymond James Financial Services at OnPoint. “We’re here to provide support and resources to help our members and community understand key investment strategies, so they can make informed financial decisions, build their nest eggs, and look to the future with confidence.”

Below are several important strategies OnPoint recommends to help people with their financial planning needs, even during times of uncertainty.

How to rebuild for retirement

The first step to evaluating your investment strategy is determining if you’re on track to retire at the age you expect while still meeting your lifestyle goals. A retirement calculator can help you determine where you stand. The calculator requires specific inputs to give you accurate feedback, including estimated Social Security benefits, your current age, retirement age and life expectancy.

If you’re not on track, it may be time to seek help from a local financial advisor. If you currently have investments, a financial advisor will help you adjust your strategy to align with your goals. Strategic changes to your retirement plan may include:

• Revising your target retirement date
• Prioritizing 401(k) contributions
• Maximizing employer matching
• Minimizing your expenses
• Timing debt payoffs carefully
• Adjusting your lifestyle
• Budgeting more for your savings and investments

A financial advisor can help you determine which strategies are right for you and provide accountability and guidance as you make changes.

How to pick a financial advisor

Below are five traits you want to look for when evaluating which financial advisor is right for you: 

• They work with you: You should always feel like you are in the driver’s seat. Your advisor should lay out the investment strategy and request your feedback. A financial advisor understands investment strategy, but you know your goals. The best results come from excellent communication.
• They put your interests first: All the financial proposals they make and strategies they formulate are to achieve your goals.
• Holistic view of your finances: In addition to recommending an investment strategy, your advisor should look at the tax efficiency of your current investments, advise you on insurance policies, understand your income and budget, and be able to consult on a wide range of investment options.
• Customized strategy: The strategy developed by your advisor should be well thought out. When your goals change or significant life events impact your retirement expectations, they should help you evaluate these shifts and consider if they require an adjustment to your strategy.
• They are backed by a team: What happens to your investments if something happens to your financial advisor? Is there someone available to answer your questions and help you with a seamless transition? When you reach out to your financial advisor, you should expect a timely response and be assured the team has the appropriate knowledge to support your goals.

Here are five signs it may be a good time to replace your financial advisor:

• Poor communication: You can’t reach your advisor to discuss your strategy or your advisor is frequently slow to return your calls or emails.
• Lack of transparency: Your financial advisor focuses on “hot takes” and “secret sauce” while avoiding transparency about their actions, practices, fees and process.
• False sense of urgency: Does your advisor tell you that you need to jump on investments quickly, or you may risk losing out on a big opportunity? You should always have the time to make an important decision.
• Claims exclusivity: If your financial advisor tells you they are privy to investment options or strategies that no one else has access to, they simply are not telling the truth.
• Goes rogue: Some financial advisors work alone and do their own thing, but that could mean they serve their interests ahead of yours. Make sure your advisor operates as a fiduciary, and understand how your advisor stays accountable. Know that you should always be involved in decision-making.

Risks to your retirement plan

Rely on your financial advisor to plan for these major drivers of financial uncertainty and insecurity:

• Major life events: A severe health issue for your partner, a child facing foreclosure, or other unforeseen events could lead to dipping into retirement accounts. Before taking this step, you’ll want to discuss the impact on your retirement plan.
• Higher-than-expected living expenses: Inflation, debt, budget requirements, ongoing expenses and other unanticipated costs may impact your retirement expectations.
• Rates stay low: As retirement nears, you may move a large portion of investments into less volatile funds. Low interest rates may make it challenging to decide where to invest to ensure adequate returns while protecting your funds.
• Market downturn near retirement: From the dot-com bubble of the late ‘90s, to 9/11, to the financial housing crisis of 2008, to COVID-19, significant events will happen that can lead to short-term dips in the market and threaten retirement plans. Financial advisors can help you build a plan to take market variance into consideration.
• Social Security changes: The estimates you see on the Social Security Administration website are not guaranteed. Future events, population shifts or changing priorities could impact your benefits.

How best to handle each of these situations will depend on how close you are to retirement and how far you are from your retirement goal. In each scenario, you have options. Working with a financial advisor can help you determine a course of action.

How to evaluate sustainable investing options

Sustainable investing, also referred to as socially responsible investing, ethical investing, or values-based investing, is an investment sector focusing on companies whose goals positively impact society while refraining from doing harm. They allow you to support social change.  Here’s how to get started:

Step One is to determine the company values that are most important to you, like environmentalism or social justice issues.

Step Two is to decide whether you want to invest on your own or by using a financial advisor. The DIY route means you’ll often need to research each specific investment to ensure it upholds your values before adding it to your portfolio. If you choose to work with a financial advisor, they have tools that can help align your retirement goals with your values.

Step Three is to monitor the progress of your investments, either on your own or with the help of your advisor.

Learn more about the financial and retirement planning resources from OnPoint, or request a complimentary consultation.

ABOUT ONPOINT COMMUNITY CREDIT UNION

OnPoint Community Credit Union is the largest credit union in Oregon, serving over 432,000 members and with assets of $8.2 billion. Founded in 1932, OnPoint Community Credit Union's membership is available to anyone who lives or works in one of 28 Oregon counties (Benton, Clackamas, Clatsop, Columbia, Coos, Crook, Curry, Deschutes, Douglas, Gilliam, Hood River, Jackson, Jefferson, Josephine, Klamath, Lane, Lincoln, Linn, Marion, Morrow, Multnomah, Polk, Sherman, Tillamook, Wasco, Washington, Wheeler, and Yamhill) and two Washington counties (Skamania and Clark) and their immediate family members. More information is available at www.onpointcu.com or 503-228-7077 or 800-527-3932.