Many people underestimate how much money they will need to maintain their lifestyle in their retirement years. Factors such as inflation, a diminishing Social Security system and rising costs of healthcare can all quickly erode our hard earned savings. With life expectancies increasing, many people spend up to one-third of their lifespan in retirement. This is why it is essential for you take the necessary steps to prepare for these years, and put your investments to work to account for them. Actively planning for your retirement may be one of the most important choices you’ll ever make, and it is never too soon to start, or too late to make adjustments.
While retirement may seem like its years away, taking advantage of investment opportunities early on in your career could make a substantial difference in how much you accumulate. As you get older, the number of options available to you will decrease. A solid retirement plan will help make sure you capitalize on what is available to you. For example, in your earlier years, you may wish to take on a higher level of risk with your investments, while you still have time to make up for market downturns. In fact, early in your career, the biggest investment risk is not being invested at all. As you get closer to retirement, however, you’ll want to select investments with lower risks.
While a comfortable retirement is an attainable goal, it does require some in-depth strategic planning, which includes some well thought out lifecycle management. During different stages in your life, it will be important for you to invest different amounts of income into different types of investments in order to make the most of what is available to you. Proper asset allocation – the concept of diversifying your investments will play an important role in this task.
Once you’ve finally reached retirement, it’s important to make sure your money not only lasts, but also continues working for you. Contrary to what most people believe, your retirement plan doesn’t end when you start retirement. As your financial consultant, we’ll help you determine which parts of your plan should be spent first, and how to allocate the remainder of your dollars.