Retirement can seem impossibly far away to many people, and as a result, they don’t plan financially for it. More than a third of Americans have no money saved for retirement. Many of these people with no savings work in jobs that offer 401ks, which allow people to invest part of their income tax-free. About half of Americans don’t take advantage of a 401k that is available to them. The best way to ensure you can retire in the future is to meet with an investment advisor and set financial goals. Here are two things they can help you with.
Decide how to invest your money
No matter what your financial situation, you should always invest, even if it’s only $20 per paycheck. 25 years ago, if you had invested $1,000 in the stock market, it would be worth more than $14,000 today. If you simply save $1,200 a year for forty years in a 401k, a normal return will give you more than $200,000. An investment advisor can help you decide the best strategy for your money and where to put it. If you’re young, investing in high-risk, high-reward stocks is a common strategy. As you age, it’s common to shift capital to more conservative stocks.
Retirement is an expensive life choice
Upon retirement, the average US citizen will receive about $15,000 a year in Social Security benefits. A very conservative lifestyle, with little or no travel, will cost a retirement of more than $40,000 on average. In short, you need to have savings if you want to withdraw. A 401k or other stock market account is one of the best ways to bridge the gap. Additionally, the average life expectancy of Americans today is over 85 years, which is significantly higher than that of 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 entertainment and travel expenses will often increase dramatically. Making sure your savings have enough for you to withdraw and enjoy is a goal finance companies can help you achieve. As mentioned above, an investment advisor can help you develop a strategy to build your money over time and provide you with the amount you need for retirement.
While most people start dreaming about retirement as soon as they start working, many don’t start planning until it’s too late. The sooner you consult with an investment advisor, the sooner you can start growing your money so you have enough to enjoy your later years. A retirement without travel and entertainment is not what many people have in mind, but without adequate savings, it will be the only lifestyle most can afford.