Think you know retirement? Try our quiz.

If you are in or soon aiming for retirement, here are some things you probably should know. Let’s see if you do.

1.

Which of the following IS NOT a reason for investors to complete a Trusted Contact form with their investment advisor?

(Choose one.)

1. It can help protect investors from fraud.
2. It is required by regulators.
3. It provides a backup connection in emergencies.
4. It allows a sort of financial wellness check if necessary.

(Answer below.)

2.

Typically, what is the first step to take when notified that you are the beneficiary of funds from someone who has just died?

(Choose one.)

1. Hire an attorney.
2. Call your accountant.
3. Verify the notification is legitimate.
4. Contact your financial institution.

(Answer below.)

3.

Which of the following is the most enduring reason to consider non-U.S. stocks in your investment portfolio?

(Choose one.)

1. Geographic diversity.
2. Favorable valuations.
3. Tax advantages.
4. Favorable regulatory environments.

(Answer below.)

4.

They’re not for everyone, but what do municipal bonds offer that makes them stand out from other fixed-income investments?

(Choose one.)

1. Guaranteed income for life.
2. Exclusions from estate taxes.
3. Inflation-adjusted dividends.
4. Possible local, state and federal tax breaks.

(Answer below.)

5.

In considering whether a brokerage account, an advisory account or a combination of the two is best for your investments, which of the following IS NOT a factor to weigh?

(Choose one.)

1. How frequently you buy and sell securities.
2. What range of annual returns you require.
3. Fees and expenses.
4. Level of services you’d need.

(Answer below.)

Answers

1.

b. It is required by regulators.

Establishing a trusted contact is optional, but it can help your advisory team in emergencies when they can’t reach you or suspect someone might have gained unauthorized access to your accounts. You provide the name and contact information for an individual who can assist in getting hold of you or checking on your wellbeing. Your trusted contact does not have access to your accounts but can serve as a resource for your advisory team.

Learn more

• Trusted contacts for your sake
• 5 tips for naming beneficiaries, a Money Talk Video with Mike Hoelzl
• Securing elder finances, by Joel Dresang
• When a loved one passes, what happens to their accounts? from the Financial Industry Regulatory Authority 

2.

c. Verify the notification is legitimate.

Even if you’re already familiar with the names of the firm and the deceased individual in the message, use the Internet and your personal contacts to confirm that a) the person has died and b) that the firm is the one that reached out to you. If you have a trusting relationship with a different investment firm, seek their assistance. If everything does check out, get details on the benefits left to you and weigh whether to hold or sell them, according to your financial plans.

Learn more

• Contacted about a long-lost relative’s inheritance? Hold on a minute, from the Federal Trade Commission
• Inheritance Scams: How You Can Spot the Warning Signs, from AARP
• How to Recognize Beneficiary and Inheritance Scams, from Western Union
• When a Brokerage Account Holder Dies-What Comes Next? from the Financial Industry Regulatory Authority

3.

a. Geographic diversity

The wisdom of diversifying your investment assets — not putting all your eggs in one basket — applies not only to stocks vs. bonds, large capitalization vs. small, and value-oriented vs. growth. U.S.-based vs. non-U.S. also makes a difference. Although investors tend to have a home-country bias for where they put their money, balance suggests they should look abroad as well. “Geographical considerations are just one of many aspects involved in allocating investment assets,” Steve Giles advises.

Learn more

• 5 reasons to watch the dollar, by Steve Giles
• Investing fundamentals: A shift in winds, by Kyle Tetting
• Over there: Investing in a global economy, a Money Talk Video with Kyle Tetting
• International Investing, from the Securities and Exchange Commission
• How to Use International Stocks in Your Portfolios, by Morningstar

4.

d. Possible local, state and federal tax breaks.

Generally, interest on municipal bonds is exempt from federal income tax,           and it may be exempt from state and local taxes if the investor lives in the state where the bond is issued. Because of the tax benefits, municipal bonds work best in taxable investment accounts and tend to favor investors in higher income tax brackets. Munis are still subject to capital gains taxes. Investors considering municipal bonds should talk with their advisors and a qualified tax professional.

Learn more

• Municipal bonds, a Money Talk Video with Dave Sandstrom
• Investor Bulletin: Municipal Bonds – An Overview, from Investor.gov
• Investor Bulletin: Municipal Bonds – Asset Allocation, Diversification, and Risk, from Investor.gov
• Municipal Bond Basics, from the Municipal Securities Rulemaking Board

5.

b. What range of annual returns you require.

Essentially, a brokerage account is more transaction-based while an investment advisory account tends to include more ongoing advice and monitoring. Brokerage accounts generally involve charges for buying and selling securities. Advisory accounts typically assess periodic service fees based on assets managed. Whether an investor is better served by one account or the other — or a combination — depends on many factors. Investors need to get clear answers from investment professionals on such matters as their experience and credentials, which regulators they report to, what services they provide, how they make money, possible conflicts of interest and what fees to expect. Request a customer relationship summary (Form CRS) for details. (Click here for the CRS for Landaas & Company, LLC.)

Learn more

• Brokerage and Advisory Accounts: Factors to Consider When Choosing an Account Type, from the Financial Industry Regulatory Authority (FINRA)
• Selecting Brokerage Services, from the Washington State Department of Financial Services
• Working With an Investment Professional, from FINRA
• Which Investment Professional is Best for You? from Investor.gov

Compiled by Joel Dresang