When someone says retirement, I know most, if not all of you have blanked out. Trust me I know. I’m a 20-year-old in a 48-year-old body. But believe from my experience when I say that I’m so glad I implemented the strategies below, because when I retire in a few years I’ll have enough money to act 20 again.
1. Quite simply, no company I know today, aside from the military is offering guaranteed pensions when you retire. It’s 401k, IRA, or DIY.
2. Social security is on track to be broke in around 12 years (Source: OASDI Trustees Report), so something will be changing unless we either bring in a bunch of new tax payers through immigration, or we start to repopulate like never before. We both know that’s not going to happen, so you’ll either be working longer or getting less, or a combo of both.
Great news, you’re going to live longer. Oh yeah, you’re going to need more money to do so.
1. If you’re lucky enough to work for a company that has a 401k plan that provides some type of match, take it with both hands. Enroll and maximize your contribution to at least the match. To retire on a salary anywhere close to your average, it’s quoted that you need to average 10% of your pay in some form of savings plan (Source: TIAA.org). If you’re the unlucky one, set up a personal IRA, or investment account and send a percentage of your pay there. I know it sucks, not exciting, but you’ll thank me one day. I’ll probably be long gone, but hey I’ll be listening.
2. “Buy the Index.” Unless you’re ready, willing, and able to be a student of the stock market, meaning you’ll be reading research, selecting the names you want to purchase, and highlighting the entry and exit points, then just buy the index. You can do this simply through index funds, and most now days are really inexpensive. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. We have programs that start at $5k. Click here for more information.
3. The true secret of wealth creation is Automation. You’ve heard it said many ways by many different people, (pay yourself first or set it and forget it). However you say it, try to forget it’s there, so you don’t think about taking the money for something less important than the rest of your life. Don’t stress about the ups and downs of the stock market. Volatility creates opportunity. If you’re consistent with adding money to your account, you’ll be able to take advantage of this. Think about it this way, if the market goes down you are buying it cheaper.
Again, I know how morbid this sounds, but at some stage investing for your future will be an important one to you. Address it now while it’s on the backburner and you can set yourself and all you care about up for the long haul.
Any opinions are those of Mick Graham and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these opinions will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance.
Individual investor's results will vary. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Investors should carefully consider the investment objectives, risks, charges and expenses of mutual funds. The prospectus contains this and other information about mutual funds. The prospectus is available from our office [or from the fund company] and should be read carefully.