Arif Halaby, the president and CEO of Total Financial Solutions, noted that a major mistake those planning for retirement tend to repeatedly make is not understanding the fees and hidden costs attached to their accounts.

“One of the biggest mistakes that we see time and time again is that people don’t understand the way that fees — especially financial fees, investment fees — in your retirement accounts, how they work,” Halaby said. “So many times people forget that the financial world is not a free world.”

In the same way that you can expect to pay for your meal at a restaurant, Halaby stressed that the financial world is a business, and it’s dangerous to believe anything is given for free when in fact there are almost always fees, expenses and other costs that you may not even realize exist.

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Jeff Girard, Halaby’s co-host on “Total Financial Solutions Safer Money Hour” on KHTS, noted he can’t count the number of times he’s seen clients who have been putting money into an account for five, 10, even 20 years and don’t see much change, despite the stock market being up.

“Why is that?” Girard said. “When you uncover some of the moving parts that are involved in their accounts, they start to see that it was not really set up for them to win, necessarily.”

For instance, one of Halaby’s clients didn’t realize that she was paying 4 percent in fees every year, and had paid astronomical amounts over the last eight years.

“She had it just under $300,000,” Halaby said. “That’s $12,000 a year, $1,000 a month in fees. So when we looked at her account and she said, ‘Arif, I started this account eight years ago with $285,000 and today it has $298,000,’ we did the math. (In) eight years, she had paid in fees about $100,000. She earned around $13,000.”

Halaby noted that it’s vital to ask yourself if using a financial product makes sense for you, and to keep in mind that a broker’s job is not to make you money, but to keep it instead.

“Most people don’t realize, in the financial world, you are not buying safety, security, advice,” he said. “What you are buying is for a computer to manage your money, to put it into a system.”

Girard encouraged asking not only about fees, but about other hidden costs that might be buried in the fine print.

“You have to ask, ‘What is my total cost?’ I think the language is the barrier here, because in the fine print … it’s disclosed, and they’ll say, “Hey, look — it was written down here,’” Girard said. “But if you call and you ask, what are my total costs, what are my total deductions, not just fees — that is where you actually get into the meat and potatoes of it, because the word fee means one thing. Cost means another.”

The financial professionals at Total Financial Solutions can help look at a person’s unique circumstances and determine the best ways for them to plan for retirement, whether that means staying their existing course or making changes because of things like fees and hidden costs.

“What we do (is) strategic income, keeping your family out of debt, managing money, planning for your future,” Halaby said, “trying to help your family make better financial decisions.”

Total Financial Solutions offers assistance with preparing for retirement in Santa Clarita and the surrounding valleys. Santa Clarita financial professional Arif Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. As a well-known financial professional, Arif Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners retirement planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344

Total Financial Solutions – Newhall

https://www.youtube.com/watch?v=4tEAr_nguAI

Arif Halaby, Total Financial Solutions, Financial Planning, Planning for Retirement, Retirement Planning