Start Retirement Saving Now – The earlier you begin retirement savings the less you will have to put away every year to reach your retirement goal. Example if you save $10,000 a year for 20 years at an 8% return you will have saved approximately $500,000 for retirement, conversely, if you saved $20,000 a year for 10 years at 8% return you would have approximately $310,000 saved for retirement. This is the power of compounding interest
If you employer has Retirement Tools or Matching Funds, use Them. – Use all the tools available through your employer and maximize contribution to your retirement plan. Minimally, you should be contributing to your retirement plan at a level takes advantage of any employer match. Some company’s retirement plans will have financial planning tools available to plan participants, if you are a do it yourselfer use these financial planning tools. If your retirement plan does not offer any financial planning services, find the services of a fee only fiduciary financial advisor.
Asset Allocation – Most investment managers will tell you that the asset allocation is instrumental to investment returns and portfolio risk management. The proper asset allocation can be the key to maintaining your retirement plan investments in turbulent markets. If your asset allocation is not in line with your risk profile you are more likely to make bad investment choices when markets are volatile. Like panic selling when market is down.
Do not get too conservative with investments as you approach retirement – Wealth managers are always having conversation with people about retirement planning. One common misconception people have about retirement is that their investment time horizon is short term, as people tend to use their anticipated retirement plan end date. This date is not the end date, but instead the start of a new phase of your retirement plan. A properly structured retirement plan will still need to last 20+ years and provide income for you and your family.
If you are just setting up retirement investment plan or you think that you may need a course correction from an experienced and impartial fee only fiduciary like Winthrop Partners, contact Thomas Saunders for a complementary discussion: 267-454-4585 or [email protected]
Thomas Saunders is the Managing Partner of Winthrop Partners. Prior to founding Winthrop Partners, Tom was Senior Vice President at what is now JP Morgan. His career includes senior and executive roles at Brown Brothers Harriman and First Niagara Bank, a top 25 Bank. Click here to contact Thomas Saunders about your investment and planning requirements.