Understanding your risk tolerance is a crucial aspect of how effective your income and wealth preservation strategy can be. Without knowing your risk tolerance, you could be leaving a lot on the table or risking a major decline in your wealth. Here are three questions to ask to start understanding your risk tolerance:
1) How Many Years Until You Plan to Start Withdrawing?
- Is it less than a year? A few years? More than 15? The time frame for when you will need the money is key to understanding your risk tolerance.
2) What’s More Important, Portfolio Protection or High Returns?
- Are you willing to take the consequences of a loss to maximize returns? Are you concerned about losses as well as maximizing returns? Or are you more concerned about avoiding losses no matter what?
- Your answer to these questions is also one of the most important factors when it comes to choosing what assets your wealth should be invested in.
3) What Are Your Annual Income Expectations Prior to Retirement?
- Are you expecting your income to stay the same, increase, increase a lot, decrease, or decrease a lot?
- Understanding your income level is another key piece to finding out what you can afford to risk achieving the returns you hope for.
- It also helps you better understand how much income you should expect to replace.
Answering these questions only scratches the surface of understanding your risk tolerance, but it’s a great way to get the ball rolling whether you’re looking to rebalance your portfolio or are constructing your retirement investment strategy.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Chase Lopez joined the ILG Financial team in 2020 as an advisor. Chase is a 2016 James Madison University graduate with a degree in management. Chase has been trained under the tutelage of Dave Lopez, who is not only the founder and managing member of ILG Financial, but also is Chase’s uncle and godfather. He also enjoys working alongside his cousin, Megan, who is Dave’s daughter. Chase, as a fiduciary, believes in putting his clients interests first, and building out plans for his clients where they can have a happy and fruitful retirement. He married his beautiful wife in February 2022 and both use most of their free time chasing around their little pup, Aurora.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.