Moisand Contributes to ABC News:

"Making Over Hazel"
Financial Planners Are Key for Retirement Dilemmas

-By Dan Moisand

September 15, 2004—Q U E S T I O N: Our retirement income is very low (less than $1,000 per month) and Social Security is $2,100 per month, net rental income from five houses after expenses is $3,000 per month. Should we begin to draw on our IRAs? Should we sell the rental houses and finance them? Our house is paid for including five rental houses. Our IRAs ($250,000) are not being tapped but we feel more insecure than ever.

A N S W E R: There is a saying in the athletic world "Pressure is something you feel only if you are not prepared."

One way to relieve your anxiety is to have a well-thought-out plan for your retirement. This is easier said than done. One of the complicating factors is that there are many variables that are completely out of your control. Can one plan when one has no control? You bet. The lack of control only makes the planning process more valuable if done well.

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NAME: Hazel and C. Ray
AGE: 64 and 67
INCOME: $72,000, not including IRAs
SAVINGS AND INVESTMENTS: $780,000
HAZEL'S SITUATION: She and her husband need advice on how best to tap their assets for retirement income.
_____________________

A good starting point is to assess what you do know about your current and future financial situation. For example, you have a handle on what your income sources are at the moment. How secure are those income streams? Social Security should continue but the extent of increases in those checks is unknown and expected to be modest. How reliable are your tenants?

Do you have a good grasp of your expenses? How are those expenses likely to change? When will your properties need significant upkeep? Will you be able to manage them given your health concerns? If you pay others to manage those properties, what are the expected increases to those costs?

Once you have a fairly clear picture of your current situation, you can project how it will change. Some expenses inflate over time while others do not. Use a reasonable rate of return on your investments.

Good financial planning is a process not a one-time event. One year from now when you go through a similar exercise to what I have just described you will notice that very few of your predictions were accurate. Precisely predicting variables such as interest rates, investment performance and inflation is nearly impossible. Instead of worrying about this imprecision, simply expect it and be prepared to adjust.

I have only described some of the elements to a good financial planning process. Space is limited here. I recommend that you hire a professional to help you. A real financial planner will help you make decisions and account for the myriad of influences on your financial well-being such as how to deal with less-than-perfect tenants.

It will be easier to make confident decisions about IRA withdrawals and the often complex task of assessing whether and how to sell rental properties. A planner can also help you deal with issues you may not have attended to as yet such as who will have decision-making authority over your assets when you are unable.

Try the Planner Search service of the Financial Planning Association at www.fpanet.org for the names of planners in your area. All planners listed are Certified Financial Planner licensees and the Web site has a significant amount of information to help you choose a planner.

Hiring a good planner should help you gain a sense of control over your future despite all the uncertainties you face more effectively and in a lot less time than you could do so on your own.

Dan Moisand, CFP® is a happily married father of two that practices asset management and financial planning with Spraker, Fitzgerald, Tamayo & Moisand, LLC in Melbourne, Fla. Dan has been named one of the "250 Best Financial Advisors" in the country by Worth magazine and was featured in the 2003 Movers & Shakers issue of Financial Planning magazine as one of the" most influential professionals in financial planning." He currently serves his profession as a member of the national Board of Directors of the Financial Planning Association.

Spraker, Fitzgerald, Tamayo & Moisand, LLC offers comprehensive wealth management services to corporate executives, professionals, business owners, and other high net worth individuals. The firm, registered with the U.S. Securities and Exchange Commission, utilizes a unique team approach in analysis and planning of their clients investment portfolios. Services include estate planning, investment management, cash flow and income tax strategies and retirement planning. The firm operates out of offices located in Maitland and Melbourne and can be reached at 407-869-6228 or online at www.SprakerFitzgerald.com.