Start Now – The sooner in your career you begin saving the less you will have to save every year to reach your retirement goal. This is the power of compounding interest. 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.
Use all the Retirement Tools your Employer makes available to you – Use all the tools at your access and maximize contribution to your retirement plan. At a minimum you should be contributing to your retirement plan at a level takes advantage of any employer match. Often, a company’s retirement plans will also have financial planning tools available to plan participants, take advantage of these financial planning tools. If your retirement plan does not offer any financial planning services, you should seek out the services of a fee only fiduciary financial advisor.
The Key to Managing Risk and Investment Returns is Asset Allocation – Any good wealth manger will tell you that the asset allocation is the key to investment returns and portfolio risk management. It is also the key to staying with your retirement plan investments in turbulent markets. If your asset allocation is out of line with your personal risk appetite you are more likely to make poor investment decisions when markets are volatile like selling when market is down.
Your retirement savings needs to last 25 years or more after you retire. – As an investment advisor we consistently talk to people coming to us for retirement planning. When discussing their personal investment time horizon, many people close to retirement believe they have a short-term time horizon, as they will use their anticipated retirement date. This date is not the end date, but instead the start of a new phase of your retirement plan. Your retirement plan investments 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 Ryan Carney for a complementary discussion: 716-322-7480 or Ryan.Carney@WinthropPartners.com