RMR Wealth Management, LLC
March 2012 Retirement Plan
Article 3

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Dear Valued Client, 

This is the final article in my Retirement Planning series.  To recap, article 1 we discussed having the right retirement plan that is best for you.  In Article 2, I spoke about having the proper allocation in place.  In this installment, I focus on the importance of implementing and continuously monitoring your plan to achieve your goals.

After you have created your investment allocation, we have the tools and resources available to help manage your accounts.  In this article, I will discuss the three R’s:  Review, Rebalance, and Refine. 

1.  Review your portfolio

The market environment changes constantly, which can cause any long-term plan to go off course. To keep your investments on track, it is wise to set aside time to review your portfolio on a regular basis. A review is especially important if you've had any major changes in your life—retirement, job change, getting married, welcoming a new child or grandchild, purchasing a house—so that you can evaluate your existing portfolio and make any necessary adjustments to your accounts.

Questions to Consider During Your Review

  • Has your situation changed?
  • Do you know how much you’ll need for your goals?
  • Has the economic outlook changed?
  • How has your investment performance affected your goals?
  • Do you know how your financial situation changed last year?

2.  Rebalance your portfolio

You allocated your initial portfolio among different types of investments—stocks, bonds, alternatives and cash—to reduce overall risk in your portfolio. But over time, the percentages you have allocated to each type of investment may have shifted due to market swings, leaving your portfolio looking much different than your original plan.

Rebalancing gets your portfolio back to your desired percentage mix. This simply means that you will need to buy and sell investments to bring your portfolio back in line with your asset allocation plan (see below). This ensures your portfolio maintains the balance of risk and return that you have determined is right for your goals.

Rebalancing in Action

    Original Allocation

   Out of Balance





For example, you may have decided to invest 60% of your portfolio in stocks, 30% in bonds and 10% in money market securities.

If market activity causes the value of the stock portion of your portfolio to increase significantly, you'll have a greater percentage of your portfolio invested in stocks than you intended.

Rebalancing—buying more bonds and money markets and selling stocks-gets your portfolio back to your desired 60/30/10 percentage mix.

3.  Refine: Make changes to your portfolio

Sometimes you need to add or replace investments for further diversification in your portfolio, or perhaps you need to overhaul your portfolio as a result of a major life event or shift in your financial goals. Before making changes to your portfolio, consider:

  • Are your new choices aligned with your current goals, time frame and risk tolerance?
  • Are there other investment vehicles or account types that might fit your goals better?
  • Would consolidating investments help simplify your account management?
  • Depending on the type of account, are there fees, penalties or taxes associated with withdrawing or moving your money? 

I hope these three articles have helped educate you about what it takes to have a solid retirement plan in place.  Having a thorough plan will prevent you from making costly mistakes.  

You have less than 40 days to complete your taxes for April 17th deadline.  Please speak with your CPA or tax professional to find out the amount you can contribute to your retirement plan before the deadline.  Be Proactive.  Don’t rely on social security, or company pensions, because they may not be available when you retire.  Do not be in the category of the 78% of Americans who do not have a retirement plan.  Create a plan and take the necessary steps to position yourself for financial freedom.

Please contact me today at 212-785-4377 x224 for your retirement reality check.



John J. Fiorito
Financial Advisor
“Retire Comfortably and Remain Comfortably Retired”

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Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.  RMR Wealth Management, LLC does not provide legal, tax, or estate-planning advice. For questions about a specific situation, please consult a qualified adviser.