What Is The Best Retirement Advice?
How would you know if you are receiving the best retirement advice? If you are a new investor, just starting out, you may accept any advice as the best advice. If you are desperate for your investments to increase in value, you may also accept any advice as acceptable advice. But not all advice is the best advice. So what should you do? Well, the first thing you should do is to understand who it is that is giving you the advice.
Finding The Best Retirement Advice
Financial planners, insurance agents selling retirement products and brokerage firms all have one objective when giving you advice. Their objective is quite obvious if you are aware of their purpose; it is to make a sale. They are in business to sell product. They give advice that will help them match their products with your needs. It’s as simple as that. Now of course not all financial representatives are out just to get you to buy their product, but its best to approach them as if they are. That way you can stay away from any emotional sales pitches. If you understand that the advice they are giving could be slanted more towards their best interest instead of yours, you can hold firm and not be swayed.
Simplify, It Is The Best Approach
The simplest approach is always the best approach. The same is true with investing. The best retirement advice that you will ever receive is to invest early and often. That’s as simple as it gets. Start investing into your retirement account when you start your first job. And don’t stop investing until the day you retire. Your working years are available to prepare for your retirement years, take full advantage of those 40 years or so to sock away as much money as you possibly can. You will not regret it.
If your employer does not offer a retirement plan that’s okay. You can open your own Individual Retirement Account (IRA). You will be amazed at how much money you will have by the time you reach retirement age if you make small deposits during your entire working life.
Unfortunately, investors sometimes complicate things. Many people mistakenly think that if they can’t do it big, it’s not worth it. If you also think that way, do yourself a favor and change that thinking. Retirement accounts are not built up with one large deposit. Investing for your retirement is a lifetime financial commitment. A little at a time all adds up. And it’s just easier to invest a little at a time. You only make so much money and that money can only be stretched so far. We all have financial obligations, making retirement investing one of those financial commitments is the simplest approaches. Besides, who has thousands of dollars sitting around waiting to be plunked into a retirement account?
Following The Best Retirement Advice
Invest Even When It’s Confusing
It’s easy to get confused about when to invest. Do you buy when the market is high or low? Should you sell when the analysts predict a market drop? Well, the absolute best time to invest is when the market is in a slump. Why? Because stocks and mutual funds are basically, on sale. So keep on investing even when the market drops. When the market is in a slump, you are buying at discount prices and you can’t beat that.
If your retirement investing is set up as an automatic payroll withdrawal, your money is going into the market at different times. Which means that you are dollar cost averaging. In other words, your money is buying stocks and bonds at high points and low points.
Avoid The Biggest Investment Mistakes
The 1st Mistake: Stopping
- For your long-term future, one of the biggest mistakes you can make is to stop investing
- If you stop investing you will not bring back your prior asset values or your financial investment just by pulling out of the market
- But if you stay in the market and continue to invest, you may build back up your asset values; and maybe even exceed your original account value
The 2nd Mistake: Denial
- The second biggest mistake you could make is to be in denial
- You may not even know that you are in denial
- If you ignore the fact that you and only you will prepare for your retirement, you are in denial
- Advice from financial planners tell you that you do need to save for your retirement…..no one will do that for you
Repairing The Big Investment Mistakes
Get Some Financial Education
- Educate yourself on the best way to get yourself financially ready for your retirement
- Talk to a financial planner, research financial web sites, go to your local library
- Interview different financial planners
- Learn about all of the retirement contribution rules and contribution limits
- Learn how to recognize a good financial advice and not so good advice
- Learn how to differentiate a good financial investment from a bad one
- Understand that your entire financial picture will be impacted by the financial investments you chose, so chose wisely
It’s Your Retirement
You are in charge. You will determine what kind of retirement you will have. Try to get and follow the best retirement advice you can to make your retirement a smooth transition.