At this time of year, you probably have taxes on your mind. It’s also the perfect time to review how well you’re currently managing your finances to achieve your future goals. Accumulating enough money for a comfortable retirement means creating an investing strategy based on your objectives, time frame and risk tolerance.
Catching The Worm
No matter what your goals are, the earlier you begin investing, the more likely you are to reach them. Time and the effects of compounding — the continual reinvestment of investment earnings — have the potential to turn even a small investment into a substantial sum. The early years of investing can be critical. Consider contributing to an employer’s retirement plan or individual retirement arrangement (IRA) as soon as you’re eligible.
Even if retirement is several years away, planning for the lifestyle you hope to enjoy once you do retire is essential. You may want to travel extensively or pursue a favorite hobby. You may even want to turn a hobby into a business. Or you may want to sell your home and move to another state — or another country. But whatever you’re envisioning for your retirement, taking the appropriate steps now offers your best chance of having enough money in the future.
When you’re choosing investments for your portfolio, you should keep potential inflation in mind. Over the long term, even low inflation may outpace the buying power of a portfolio that includes only conservative investments. Also remember that health care costs tend to rise in retirement and could consume a sizable portion of your budget, so plan accordingly.
Don’t Underestimate Your Needs
Because no one can be sure how many years they will spend in retirement, your best course of action may be to plan for a long retirement. Investing as much as possible for as long as possible can help you accomplish your goals.
Your finanical goals are unique, so be sure to consult a Security National Bank Wealth Management professional before taking action.
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