Retirement planning requires asking yourself some questions, such as “When do I begin saving for retirement?”, “How do I start?” and “Should I purchase stocks, bonds, annuities, commodities, mutual funds or other assets?”
The answer to the first question is simple: start as soon as you can. Ideally, you’d start saving in your 20s, when you first leave school and begin earning paychecks. That’s because the sooner you begin saving, the more time your money has to grow. Each year’s gains can generate their own gains the next year – a powerful wealth-building phenomenon known as compounding.
The answer to the second question depends on your circumstances, such as availability of a company plan (401k or other), but again the important point is to begin as soon as you can.
A more difficult decision is choosing where you will put your retirement funds. A basic rule of thumb is ‘Diversify’; Don’t put all your eggs into one basket. Talking to a professional advisor will help you decide how much risk you are willing to take versus how much return you will want on your investments, which will help you decide where you want your retirement funds to go.
And don’t give up if you haven’t started saving for your retirement regardless of your age. Starting now is better than never starting. Here is an article for those who have not yet started saving for a fast approaching retirement.
For additional help on retirement planning, please contact us at (859) 264-4200.