Whether your golden years are decades away or right around the corner, having enough to live on comfortably after you retire is a concern for just about everyone. Regardless of how much you have today, investing wisely now can help make big strides toward the financial goals you have for your future. Here are a few tips to get you started.
Pay yourself first. Savings is one of those things that falls by the wayside when the budget gets tight or something fun and frivolous comes up. Keep yourself in check by setting up your paycheck in a way in which you’re automatically saving the first 10 percent of it. Whether that 10 percent is used as a 401K contribution, goes toward another type of retirement fund, or is simply deposited into a savings account, paying yourself first is the best way to ensure your investment goals will get met.
Hire a pro who knows … you. Stocks and bonds are black and white, but the right combination of investments is a gray area that differs for every individual based on their goals, assets and personality. The financial advisor you choose should get to know you and your financial history in order to create an investment plan that works best for you. At Belco Retirement & Investment Services, financial advisors sit down with you face to face and spend time collecting and studying your information in order to come up with a plan that’s uniquely perfect for you.
Keep taxes in mind. Financial guru Tony Robbins once said, “When it comes to our investments, we have been taught to focus on returns. But it’s not what you earn that matters, it’s what you keep. And if your portfolio isn’t tax efficient, then you may not be keeping as much as you should be.” Before investing, you should be aware of not only general income tax but also long-term capital gains and short-term capital gains taxes. Your financial advisor can walk you through the ins and outs of all three, and help you invest in a way that makes sure most of the money stays with you.
Avoid cluttered investments. Don’t spread yourself too thin, trying to cast a wide net of investments across many industries and platforms. While diversifying is good, making your money move in too many different directions will leave your head spinning and, potentially, some of your investments unchecked. Generally speaking, you should aim for a mix of high risk and low risk investments, holding more money in (high risk) stocks when you’re young and eventually transitioning to more (low-risk) bonds as you near your goal retirement age.
Don’t over-check. The stock market rises and falls, and if you’re the type that panics when you see numbers drop (or gets overly excited when you see them rise), you’ll want to ovoid over-managing your own investments. A regular check-in with your financial advisor to review any changes to your investments as well as your life and goals is necessary; an hourly log-in to your accounts online is not.