“It’s a great investment!” replied Ed when I asked him why he had purchased his variable annuity. “I get 5% guaranteed—and if the markets do better I get all the upside too!” The promise sounds too good to be true. And, in this case, it is too good to be true. I’ve seen this annuity many times over the past few years. The sales pitch is very convincing—who wouldn’t want no downside risk and full upside benefits. Has anyone tried to sell you this annuity?

Yes, it’s true, anyone can save 10% or more in four year college expenses. That could easily mean more than $25,000 in your pocket. And, there is no need to complete the FAFSA financial aid form or score 800s on your SATs to garner a scholarship. This opportunity is open to everyone.

I am basking in the glory of my son Peter’s recent college graduation. As a financial planner, I am thrilled that the $60,000 per year payments have ended, and, as a parent, I am proud that he has achieved this significant milestone. As I reflect on his college experience I realize I have some wisdom to share both as a parent and as Fee-only financial planner.

“What do you think of these annuities?” Mel asked. “An insurance guy I know is advising us to transfer all of our remaining IRAs into these two investments, and I’m not confident it’s the right approach for us.” Since these annuities didn’t look appropriate for Mel and Ginny, I figured the annuity salesman’s rationale was the big commissions he would earn on the sales.

June and Joe are 73 and 75 respectively. They are happily retired and still living in the home where they raised their three children. Like many people their age, they panicked in the 2008 financial crisis and reallocated much of their portfolio out of stocks—and never got back in. As a result, they do not have an abundance of assets.

“Do you understand this investment?” I asked Betsy. My youngish 65-year-old client looked back at me with a quizzical expression. I was explaining Betsy’s portfolio holdings and, unfortunately, her broker, someone she thought was acting in her best interest, had taken advantage of her. She had no idea how this particular security operated; worse still, she lacked a clear understanding of most of what was in her portfolio. She just bought what her broker recommended. “He was such a nice guy,” she volunteered.

As I study for my Retirement Income Certified Professional certification, I often read about visualization. Research has shown time and again that visualization is key to financial success, or any success for that matter, especially for older adults. What is visualization? Basically it means picturing in your head or on paper images of your goals. I am a believer in visualization not just because of the research, but because it has worked well for me at various important points in my life.

“I am 62 years old, and have worked hard all my life–I’m tired,” Joe explained at the start of our conversation about retiring. His song is a familiar one. There is just something about the early 60’s that screams, “time to retire.” When age 65 rolls around many feel entitled to call it a day regardless of whether they are financially ready or not. The problem is that only 48% are in financial shape to do so.

Risk is a funny thing. Everyone perceives it differently. For example, I would never go bungee jumping, but I know a bungee jumper who is scared of the stock market and keeps all his money in cash.

As a fee-only financial advisor I know that the perception, understanding, and realization of risk is of the utmost importance when investing, whether for retirement or fun. It is vital to be become aware of the risks that aren’t obvious as well as to not over exaggerate the ones that are.

“Would you believe Matt gave $60,000 to the school capital campaign?” said my friend Beth.  We were catching up after being out of touch for years and these were the first words out of Beth’s mouth after she learned I was a fee-only financial advisor.  She elaborated on the gift by saying that her husband Matt had just cashed in on some of his stock gains and they had a pool of cash sitting around.

Your interpretation: Wow!  Those people are lucky to have so much money that they can gift $60,000.

Why “take the money and run” may be your best strategy at work

I remember the first time the markets slapped me hard like it was yesterday—the sinking feeling in my stomach, the nausea, the disbelief with which I stared at my Bloomberg screen. The employment numbers had just been released and my first interest rate option position was tanking. I had planned to be the new hot shot. I had been so confident. I knew what the markets were going to do. Why couldn’t everyone else see what I saw? It was so obvious. What an idiot I was. The risk was staring me in the face all along, but I never really expected the downside to materialize for me!