Retirement can seem incredibly distant for many people, and as a result, they don’t plan for it financially. More than a third of Americans have no money set aside for retirement. Many of these people without savings work in jobs that offer 401k, which allow people to invest a portion 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 will be able to retire in the future is to meet with an investment advisor and set financial goals for yourself. Here are two things they can help you with.
Decide how to invest your money
Regardless of your financial situation, you should always invest, even if it’s only $20 per paycheck. 25 years ago, if you invested $1,000 in the stock market, it would be worth more than $14,000 today. If you just save $1,200 a year for forty years in a 401k, a normal return will net you over $200,000. An investment advisor can help you decide on the best strategy for your money and where to invest it. If you’re young, investing in high-risk but high-reward stocks is a common strategy. As you age, it is common to shift capital into more conservative stocks.
Retirement is an expensive lifestyle choice
In retirement, the average US citizen will receive about $15,000 a year in Social Security benefits. A very conservative lifestyle, with little or no commuting, 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. Moreover, the average life expectancy of Americans today is over 85 years, which is significantly higher than for past generations. This means that retirement will be longer, and therefore more expensive. The normal cost of living will also generally increase when one stops working. With more free time, annual spending on entertainment and travel will often increase dramatically. Making sure your nest egg is enough for you to retire and enjoy is something financial companies can help you achieve. As mentioned above, an investment advisor can help you develop a strategy to grow your money over time and provide you with the amount you need for retirement.
While most people start dreaming of retirement as soon as they start working, many don’t start planning for it until it’s too late. The sooner you consult an investment advisor, the sooner you can start growing your money so that you have enough to enjoy for your years to come. Retirement without travel and entertainment isn’t what many people have in mind, but without adequate savings, it will be the only lifestyle most people can afford.