3 Important 'Rules of the Road' to Retirement
January 29, 2018
By Colin OShea
Saving and investing for a retirement that’s many years in the future isn’t a short trip across town. Instead, it’s a long haul from coast to coast. You’re probably going to encounter plenty of rough stretches that could test your resolve. But sticking with your long-term strategy will help you reach your destination of a financially comfortable retirement.
1. Stay on Your Route
As a long-term investor, you’re in a good position to ride out any stock market volatility. While short-term drops in investment performance may be a concern, remember that stocks provide an opportunity for potential long-term growth. Although past performance is no guarantee of future results, the stock market has eventually recovered from every downturn. If you are comfortable with your long-term investment strategy, stick with it even during market downturns.
2. Keep On Truckin’
Participating in your retirement plan — even when there are troubling economic conditions — may help you reach your retirement savings goal. When you save consistently, you’ll potentially benefit from any market upswings and be able to invest at lower prices when the market is down. Over time, contributing at a steady pace may be a more effective strategy than stopping contributions when the economy is rocky and then saving again when conditions improve.
3. Push the Pedal to the Metal
You have a lot of other demands on your money, which can make it hard to save more for retirement. But you should try to increase the amount you contribute to your employer’s plan or other retirement savings account. Over time, even a small increase in your contribution level can have a significant impact on the amount of money you’ll have available when you retire. And the sooner you start contributing more the better, since your money will have more time to benefit from potential growth. Shifting into a higher savings gear may help you get to your financial destination by the time you retire.
Over time, regular contributions to your retirement savings plan can add up significantly:
||ACCOUNT BALANCE AFTER:
| Weekly Pretax Contribution
|| 20 YEARS
This is a hypothetical example used for illustrative purposes only. It is not representative of any particular investment vehicle. It assumes a 6% average annual total return, compounded monthly. Your investment results will be different. Tax-deferred amounts accumulated in the plan are taxable on withdrawal, unless they represent qualified Roth distributions.
For more tips on saving for retirement, contact your Security National Bank Wealth Management advisor today.