Looking Forward: Investments, Assets and Your Retirement

Planning for retirement is not something that should be put off to the last minute or after the company farewell party. There are many things to do shortly before you retire and some things you should start as soon as you enter the work force. It is not original, but it is never too early to start planning for your future.

Beginning At an Early Age

If you are just entering the work force and not making a whole lot of money, it is still not too early to get into the practice of savings. Decide to put five percent of your paycheck into savings. 

As your income grows, continue to save. Try not to touch it. This is the first step toward reaching the goal of having a comfortable and enjoyable retirement.

Take Advantage of Any Program Your Employer May Offer

If the company you work for offers a 401K plan, participate in it. Contribute as much as possible to the plan. Usually, there is an option of making taxable or tax deferred contributions. 

Tax deferred may give you a little more spending money when you first begin investing, but it is not going to be a big help regarding income taxes when you retire.

Open an IRA

The individual retirement account allows you to put a portion of your income in an account that will draw interest. The contributions are tax deferred. There is also the possibility of opening a Roth IRA. In this plan, the money you contribute is taxable. However, the money you earn will be tax-free when you withdraw it. 

Regardless of which plan you open, do not go to the nearest bank and take whatever fixed rate is being offered. Talk to a financial adviser or stockbroker and determine how the money can be invested to generate the best yield with a reasonable degree of security.

Looking Forward: Investments, Assets and Your Retirement

Planning for retirement is not something that should be put off to the last minute or after the company farewell party. 

There are many things to do shortly before you retire and some things you should start as soon as you enter the work force. It is not original, but it is never too early to start planning for your future.

Beginning At an Early Age

If you are just entering the work force and not making a whole lot of money, it is still not too early to get into the practice of savings. Decide to put five percent of your paycheck into savings. 

As your income grows, continue to save. Try not to touch it. This is the first step toward reaching the goal of having a comfortable and enjoyable retirement.

Take Advantage of Any Program Your Employer May Offer

If the company you work for offers a 401K plan, participate in it. Contribute as much as possible to the plan. Usually, there is an option of making taxable or tax deferred contributions. 

Tax deferred may give you a little more spending money when you first begin investing, but it is not going to be a big help regarding income taxes when you retire.

Open an IRA

The individual retirement account allows you to put a portion of your income in an account that will draw interest. The contributions are tax deferred. There is also the possibility of opening a Roth IRA. 

In this plan, the money you contribute is taxable. However, the money you earn will be tax-free when you withdraw it. Regardless of which plan you open, do not go to the nearest bank and take whatever fixed rate is being offered. 

Talk to a financial adviser or stockbroker and determine how the money can be invested to generate the best yield with a reasonable degree of security.

Buy Life Insurance

Term life insurance starts out cheap. However, the premium increases over time. If you outlive the term, you or survivors get nothing. If it was an employer's policy, and you change jobs, there will be no refund. 

You can buy a 20-year paid-up whole-life policy for a higher, but fixed, monthly premium. If married, purchase a policy for yourself and your spouse. If there is an early death, the benefits are tax-free and can cover funeral expenses and help with the mortgage payments.

Be Diligent

Check your investments at least every month. Talk to your financial adviser or broker to get their take on where the economy is heading. Do not invest all your funds in one stock or company. At any given time, some of your investments could be threatened by a change in the financial markets. It may be necessary to make some adjustments.

Simply stated, to plan for your future you have to invest money you are earning today. Social Security in some form will be around 40 years henceforth and probably longer. However, it will only cover a fraction of your expenses. Do not buy over your income. That BMW in the showroom looks great, but the Chevrolet will get you to work. 

Think about the things for which you are planning. Is it your own retirement? Are you saving for your children’s college education? Do you plan to move to an exotic island before you are 50? Prioritize and be reasonable in what you plan to do. Watch your investments. Communicate with your financial adviser on options that may develop. Do not depend on a company retirement plan. 

You may have several different jobs during your working career, and the retirement plan may not follow you. If a company pension comes your way, you are ahead of the game. However, if it disappears, you can still be in good financial shape if you start early in planning for the future.

Term life insurance starts out cheap. The premium increases over time. If you outlive the term, you or survivors get nothing. If it was an employer's policy, and you change jobs, there will be no refund. 

You can buy a 20-year paid-up whole-life policy for a higher, but fixed, monthly premium. If married, purchase a policy for yourself and your spouse. If there is an early death, the benefits are tax-free and can cover funeral expenses and help with the mortgage payments.

Be Diligent

Check your investments at least every month. Talk to your financial adviser or broker to get their take on where the economy is heading. 

At any given time, some of your investments could be threatened by a change in the financial markets. It may be necessary to make some adjustments.

Simply stated, to plan for your future you have to invest money you are earning today. A specialist from Pinnacle Financial Partners recommends taking a look at your financial assets as a whole to determine what they can offer for your future plans. 

Social Security in some form will be around 40 years henceforth and probably longer, however, it will only cover a fraction of your expenses.

Think about the things for which you are planning. Is it your own retirement? Are you saving for your children’s college education? Do you plan to move to an exotic island before you are 50? Prioritize and be reasonable in what you plan to do. 

Watch your investments. Communicate with your financial adviser on options that may develop. Do not depend on a company retirement plan. You may have several different jobs during your working career, and the retirement plan may not follow you. 

If a company pension comes your way, you are ahead of the game. However, if it disappears, you can still be in good financial shape if you start early in planning for the future.