Retirement can seem impossibly far away for many people, and, as a result, they do not plan financially for it. More than one-third of Americans have no money saved for their retirement. Many of these people with no savings work in jobs that offer 401k’s, which allow people to invest part of their income tax-free. About half of Americans do not take advantage of a 401k that is available to them. The best way to ensure that you are able to retire sometime in the future is to meet with an investment advisor and set financial goals. Here are two things they can help you with.
Deciding How to Invest Your Money
No matter what your financial situation, you should always be investing, even if it is only $20 a paycheck. 25 years ago, if you had invested $1,000 in the stock market, it would be worth over $14,000 today. If you simply save $1,200 a year for forty years in a 401k, a normal return will give you over $200,000 dollars. An investment advisor can help you decide the best strategy for your money, and where to put it. If you are young, investing in stocks with a high risk but high reward is a common strategy. As you grow old, it is common to shift capital into more conservative stocks.
Retiring Is an Expensive Life Choice
Upon retirement, the average U.S. citizen will receive about $15,000 a year in Social Security benefits. A very conservative lifestyle, with little to no travel, will cost a retiree over $40,000 on average. In short, it is necessary to have savings if you want to retire. A 401k or other stock market account is one of the best ways to bridge the gap. Furthermore, the average life expectancy for Americans today is over 85 years, which is significantly higher than for past generations. This means that retirement will be longer, and thus more expensive. The normal cost of living will also generally increase when one stops working. With more free time, annual entertainment and travel expenditures will often increase dramatically. Making sure that your nest egg has enough that you can retire and enjoy it is a goal that financial firms can help you attain. As mentioned above, an investment advisor can help you develop a strategy to build your money over time, and to provide you with the necessary amount for retirement.
While most people start dreaming of retirement as soon as they start working, many do not begin planning for it until it is too late. The sooner you consult with an investment advisor, the sooner you can begin growing your money so you will have enough to enjoy your later years. A retirement without travel and entertainment is not what many people have in mind, but without proper savings, it will be the only lifestyle most can afford.