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Invest for Retirement

Invest for retirement, and you'll be financially prepared to enjoy a comfortable standard of living with funds to spare even for a little fun beyond your basic living expenses. Neglect your financial future, and you might find yourself in a difficult position once you are ready to retire and possibly be pinned down by financial advisor fees. Investing is something you know you should do, but determining what steps to take and how to stay on track is not quite so easy. When you are young, finding the money to pay your day to day bills can be a struggle, especially if you lack professional guidance. In your 20s, it's tempting to choose disposable income over savings. And once you start a family in your 30's, finding the money to raise kids, put money aside for their college tuition and maybe take a vacation or two starts to overshadow investing for retirement.

Making Retirement a Priority

The most immediate action you can take to invest for retirement is simply organizing your priorities. Seeking the help of a certified financial planner is a great first step since it gives you an outside opinion. This allows you to objectively examine your obligations, from monthly bills to future goals, to determine where you can cut expenses and where you need to invest your time. A good financial plan takes every area of your life into consideration, including your "fun expenses" and long-term goals. Working with a professional financial planner forces you to think critically about what kind of lifestyle you want in retirement and what kind of financial investment it will take to reach your goals.

Every year that you don't invest for retirement, you lose valuable opportunities to benefit from compound interest. This can result in hundreds of thousands of dollars lost from your nest egg if you wait until your 30s to think about your financial future. Even an amount as small as $50 a month can make a big difference when you consider the positive effects of interest over several decades. A financial planner can help you find the best types of savings accounts to start your investment, while developing a long-term plan that can take you from a simple bank savings account to a diversified portfolio. It's important to remember that all nest eggs began with a single dollar, and every effort you make is significant in building your financial future.

Good Investment Choices

Knowing where to invest for retirement can be difficult, particularly if you don't have a financial background. This is where seeking professional adivce can help. A certified financial planner can give you options based on your income, age and long-term goals. If you are in your 20's, for example, you can afford to invest in riskier accounts, but you might not have much savings yet. Your advisor will likely suggest high interest savings accounts until you have amassed a few thousand dollars, at which point he or she can recommend a mix of stocks, bonds or mutual funds to maximize your earning potential with minimum risk. As you get older, the appropriate mix of stocks versus bonds and low-risk accounts like Treasury bills will decrease.

As you invest for retirement, the best choices for you will depend heavily on your long-term goals. The more expensive your goals, the more you will need to invest for retirement. If you want to sell your home and spend your golden years traveling in an RV, you will have a significantly different financial strategy than if your goal is to travel the world, staying exclusively at four-start hotels. You will have a different strategy altogether if your prerogative is to keep your home as a place to spend the holidays with family. The activities you hope to enjoy during retirement will also have an impact on how you invest. If you plan to indulge in ski vacations, you'll have to build a much bigger nest egg than if you hope to spend your retirement gardening. Discussing your desired lifestyle with a financial planner can help you determine how much you'll need to invest for retirement to live according to those standards.

Certified financial planners can help you invest for retirement in a number of important ways. Although you know you should invest in your future, it is often difficult to know where to begin. A financial advisor can show you how to develop a budget, diversify your portfolio to minimize risk, and how to invest in solid, stable accounts that will grow steadily as you reach retirement. The good news is, you don't need to be an expert to invest wisely in your future. If you aren't sure how to invest for retirement, seeking professional advice when you are young can make life significantly more comfortable once you retire.

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