When you're investing for your retirement, you want to be sure you accumulate enough so that your retirement years are comfortable and enjoyable. If you make too many errors in judgment, you could jeopardize your future financial security.
Don’t wait to start saving
Too many people wait to start saving for retirement until after they buy a house and pay for their children’s college education. While this method may seem logical, it typically doesn’t work. Time is critical to the growth of your retirement account. If you put other goals first and wait to start saving for retirement, you will miss out on the benefits of compounding for all those years you weren’t saving. It’s practically impossible to make up the difference once you get a late start.
The ideal time to start saving for retirement is whenever you start your first full-time job. It may be difficult to save for something so far off when you have so many current demands on your paycheck. Start with a small amount every payday and increase it as your earnings increase. With a good budget and a little discipline, you may be able to save enough to buy a house, send the kids to college, and have enough for a comfortable retirement.
Don’t avoid the stock market
Occasional declines frighten some investors away from the stock market. Instead, they invest exclusively in more conservative investments because of their lower risk. What many investors don’t realize is that conservative investments also carry risk -- the risk that they won’t stay ahead of inflation. With essentially no gains from investment growth, progress is limited to the amounts investors put into their accounts.
If you have a significant number of years before you will be ready to retire, then your investments have a lot of time to recover from periodic declines in the stock market. Choose a mix of investments, including stocks, that will give your retirement savings the chance to grow over time.
Don’t follow the crowd
Everywhere you look there are financial experts giving advice on how and where to invest your money. It’s easy to become confused and misled. In most cases, by the time a hot investment tip hits the airwaves, it’s too late to benefit from it. When you are saving for retirement, you are a long-term investor. Avoid the fads and short-term trends and stick to your long-term investment plan.
Don’t forget to review your plan
Once they have implemented their retirement investment strategy and it’s working for them, many investors forget to review their plan periodically. If your personal or financial situation changes significantly, it may affect your retirement investment strategy. So, once your strategy is in place, don’t forget to review it occasionally to make sure it still suits your needs. Make sure you review your strategy again after a death, divorce, or change in employment in your family. Also, as retirement draws closer, you may want to shift some assets from more volatile to more stable investments.
You don’t have to be investment savvy
To invest well, you need time and expertise. Most of us don’t have either one, but there is an easy way to still invest – by letting the investment professionals at COUNTRY Trust Bank® do the investing for you. No matter from where you’re starting, you can put these experts to work for you.
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