We all have dreams of the perfect retirement that includes no money worries at all. Unfortunately, studies estimate that only 2 in 5 people will truly have enough saved to have no financial worries in retirement. There are financial moves to improve your chances of having your dream retirement.
Why do most people not have enough money at retirement?
Regrettably, most people don’t start early enough in their working career. Putting off saving for retirement just 10 years can severely lessen your chances to have enough saved for your dream retirement. It is just too hard to catch up the longer you wait because you have lost the benefit of compounding returns.
What else can lessen your chances?
It is not taking the appropriate level of risk for your age. It is critically important to balance the risk and return of your investments to maximize your retirement savings growth. Too often people are on either end the risk spectrum. It is important to remember that the older you are the less risk you can afford to take but when you are younger you might want to take more risk to increase your earnings.
Is there a common mistake people need to avoid?
Yes, it is prioritizing other expenses ahead of retirement savings. This is the number reason people delay or change retirement plans. If you fund your child’s education or spend more on housing, transportation or entertainment at the expense of your retirement savings it can have drastic circumstances. There is only one way to fund your retirement and that is through savings.
How can you avoid poor investment choices?
There are two simple investment truths to follow: Don’t invest in anything that you don’t understand and never invest in something that is too good to be true. It is very unlikely to find a high return, no risk investment option. If you don’t understand an investment you could make mistakes in how you manage the investment.
What advice would you give to an investor of any age?
Make sure that you get the proper advice from someone who understands all of the nuances of investing. Understanding all of the potential risks and opportunities can be overwhelming. Getting any level of professional help will only improve your chances of success. An additional benefit is that when there are turbulent markets, you have someone else to help you navigate uncertain times.