Investing for Retirement: an Age-related Tip

Posted by Shannon Bobbitt

April 14, 2009

by Jessica Moore

This article will discuss strategies to ensure your investments see you through your retirement, tailored to your age group. This is only a guide, and you should consult your financial manager prior to undertaking any large investments.

No doubt, you’ve heard that we are facing an economic downturn and are worried about the future. Like most people, you are probably concerned about your job future and have pushing long-term goals down on your list of priorities. Don’t - the best way to survive lean times is to have savings set-up that help you to manage your finances.

Unfortunately, we can no longer depend upon Social Security to carry us through our golden years. More and more, governments are pushing the onus of caring for themselves through old age back onto the people. This burden opens opportunities for the savvy consumer though. Through smart investing and discipline you can lead a life of luxury instead of merely surviving your old age.

It is a common myth that investing requires a large amount of capital initially, don’t believe this. With some careful planning anyone, regardless of income or expenses, can begin saving for comfort in their golden years.

To get a fuller picture of your savings options read the entire article. If you would prefer to only read about your situation skip to the section about your age group.

If you are 20 - 30: Start right away. Capitalize on your greatest asset - time. Choose safe, long-term investments that lock up your principal. This will make sure that you don’t “temporarily” withdrawal funds to finance a weekend in Vegas. Options you may want to explore are IRAs (Individual Retirement Accounts) which provide valuable tax break incentives as well as compounding interest on your investment or if you’d prefer to have temptation removed you could opt for a 401k. A 401k is a savings plan that automatically takes deductions from your paycheck and can allow for the generation of a healthy nest egg later in life.

You are 30something: You are beginning to reap the rewards of your hard work with higher wages. Add to your 401k and IRA accounts gradually, slowly increasing contributions. Experts say that you should be investing about 10% of earnings by this point in life. Take the remainder of that 10% and invest in stocks. Stocks come with inherent risks, but prudence can help minimize risks.

If you are 40 - 50: Before you panic, remember that you still have about 20 years to prepare your retirement fund. If retirement saving hasn’t been a priority for you, you’re going to want to hit your contribution limits on any 401k or IRAs you do have. Also don’t rely solely on employer based plans; open up at least one private plan for yourself. Your 40s are a good time to resort your assets. Take an overview of your entire portfolio. If you have been investing, scale back your stock options to 80% of your assets, and reinvest that money into saver options like bonds. Finally, if you have been supporting an adult child, it may be time to cut the apron strings.

If you are 50 - 60: You’re finally close enough to see the end-zone, but now you’re worried you haven’t done enough. You will have to be honest with yourself. Decide what your goals for retirement are and find out how much money you will need to meet those goals. Once you are armed with this, collect all your records: assets, expenses, debt, goals and contact a financial expert. You are going to need assistance to, and they can help you. Utilize any government grants or other opportunities that might be available to you. Depending on where you live, you may be entitled to contribute a higher percentage of your salary than previously. If your situation isn’t as rosy as you’d like you may need to look into delaying retirement or taking a part-time job after leaving your current position.

About the Author:

When it comes to your retirement plans there are several things to be aware of. These days you should make sure any of your gift cards are safe, as financial troubles are affecting many retailers.

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Investing for Retirement: an Age-related Tip

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