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The Biggest Financial Mistakes Pharmaceutical Reps Make

The Biggest Financial Mistakes Pharmaceutical Reps Make

| August 07, 2020
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Working as a rep for a pharmaceutical company can be a lucrative career that provides a comfortable life in the present and can provide for a comfortable life in retirement. Most pharmaceutical reps don’t take that for granted and save diligently for retirement. In spite of that, there are three big mistakes that I see reps like you making over and over again. 

Leaving Money With Old Employers

Most people know that when you move from one employer to the next, you can roll your old retirement account from one custodian to the next. Did you know that you can roll it over even when both companies use the same custodian?

Many of the clients I work with didn’t realize they could roll over their 401(k) from a previous employer when their new job used the same custodian. For example, let’s say your old job held their 401(k) at Fidelity. You get a new job that also uses Fidelity for their 401(k). Even though it is the same custodian, you can still roll over the account. Rolling over your account may provide you with more and better investment opportunities and lower costs. 

Not Coordinating Multiple Accounts

Once you’ve been in the workforce for a while, most pharmaceutical reps end up with multiple investment accounts, whether 401(k)s, IRAs, or taxable brokerage accounts. Having multiple accounts is not necessarily a mistake, though consolidating them can really simplify things. The big mistake is not coordinating the accounts. 

Do you know what is in each of your accounts? Do you know how your accounts fit together to form a bigger picture? Most pharmaceutical reps have a number of accounts that aren’t coordinated, so they are unsure if they are well-diversified or even invested within their risk level. 

When you have multiple accounts, it is important to view them all together as a single portfolio. That will help you see if they are properly diversified and ensure that you aren’t exposed to more risk than you are comfortable with or leaving potential growth that you need on the table. 

Wondering If They’re Saving Enough

You may be asking yourself, “How could wondering if you’re saving enough be a mistake? Isn't it a good thing to be thinking about that?” The mistake isn’t in thinking about how much you are saving for retirement; the mistake is wondering about it instead of knowing. If you are wondering about it, that means that you don’t have a concrete plan and a clear trajectory. 

Even if you save $50,000 a year, you won’t know if it is enough until you establish your goals and calculate how much money it will take to get there. Most of the pharmaceutical reps that I come across make significant contributions to their 401(k) plans but still lack the peace of mind that comes from knowing that they are on the right track. 

The first step in achieving that peace of mind is having a clear goal for your retirement. Do you want to retire to a golf course in St. Augustine or a cottage in Nebraska to be close to your grandchildren? It will take a different amount of money to achieve each of those goals. Once you have a clear picture in your mind of where you want to end up, you can do the calculations necessary to see if you are on track or need to make adjustments.

How I Can Help

How are you doing? Did any of the mistakes I mentioned resonate with you? If so, I may be able to help. As a financial advisor, I have a lot of experience helping pharmaceutical reps just like yourself plan for retirement, manage accounts, and successfully spend down savings in retirement. 

If you don’t have a clear retirement target that you’re aiming for, or if you need help managing your investments, call 352-207-8014 or schedule here a complimentary, no-strings-attached meeting where we can discuss your questions, concerns, and goals, as well as my process in working with clients so we can see if we would work well together. 

About Chris

Chris Reed is a financial advisor and the founder of Match Point Financial. Since 2002, he has been helping people make informed choices with their money and pursue their financial goals and objectives. He started his career with MetLife and has continued seeking to provide his clients with the best possible service through A.G. Edwards, UBS, and finally through partnering with Cetera Advisors LLC and forming his own independent firm in 2010. Learn more about Chris by connecting with him on LinkedIn or register for his recent webinar “Are Your Old 401(k)s Collecting Dust and Losing You Money?” here.

Financial Advisor: Securities and advisory services offered through Cetera Advisors LLC, member FINRA/ SIPC, a broker/dealer and a Registered Investment Advisor. Cetera is under separate ownership from any other named entity.

Consider all available options, which include remaining with your current retirement plan, rolling over into a new employer's plan or IRA, or cashing out the account value. When deciding between an employer-sponsored plan and IRA, there may be important differences to consider - such as range of investment options, fees and expenses, availability of services, and distribution rules (including differences in applicable taxes and penalties). Depending on your plan's investment options, in some cases, the investment management fees associated with your plan's investment options may be lower than similar investment options offered outside the plan.

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