There was a time when company-run pension plans allowed hard-working Americans to rest assured that they would be taken care of after retirement. So there wasn’t much preparation involved and few actually knew that they may have required additional savings.
Times have changed though and with our new-found independence also comes responsibility. We like to know we are in charge of investment decisions and here is where the situation becomes complicated.
The confidence in having enough money to ensure a comfortable lifestyle throughout retirement has been on a downward trend since 2007. Although in 2014, it rose moderately, it’s still worrisome that only 18 percent of all workers are confident in their retirement savings.
The longer life expectancy of the American population has now contributed to a longer time spent in retirement so making clever market investments should be enough to ensure the funds you need later on in life.
A clear lack of confidence in the future has also caused workers to either expect to retire much later than workers would have several decades ago or not expect to retire at all. In 1991, approximately 11 percent of American workers had expected to retire after the age of 65. Nowadays, 33 percent of workers know that they won’t retire before age 65. 10 percent doesn’t expect to retire at all.
Simultaneously, a different number decreased. In 1991, approximately 50 percent of all workers had expected to retire before 65.That percentage has dropped to 27 in 2014.
So what are the chances that Americans find proper retirement investment opportunities? A massive mistake is failing to begin saving up when you are young. Statistics show that 36 percent of all workers don’t even have $1,000 in savings or investments. And considering that a person requires approximately 70-80 percent of their pre-retirement income after retiring, not starting early enough may prove disastrous.
Invest cleverly: mix different sectors in a varied portfolio, including highly-volatile ones and so called “safe options.” Younger people tend to dare for out-of-the box investments, such as revenue generating websites. Today’s Growth Consultant as well as other firms help you with your investment decisions.
It’s important to not become discouraged, especially when witnessing your portfolio drop significantly in certain situations. Don’t stop saving in such situations. Talk to your broker or consultant and increase your savings when stock prices are at their lowest (because it’s the time when returns are highest).
As a general rule of thumb, always try to plan for a longer than average retirement period and don’t plan your savings on the average life expectancy. In the end, you mitigate any risk of outliving your savings and running out of money.
The precise moment to retire should also be carefully chosen. Though it may seem idyllic to retire before 60 or 65, an early retirement may significantly stress your portfolio. Consider working part-time jobs or continuing your full-time employment for a little longer so that you are not forced to tap into valuable savings too early.
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