The majority of Americans will not be as prepared as they need to be for retirement. Many will accept that and learn to live in retirement with less. That does not have to be the case, provided you still have some wage-earning years left. Here is some advice if you are late to the retirement investment game, are looking for retirement investment companies in Jefferson, NC, and are wondering how to make up for lost time.
Contrary to some advice, it is almost never too late to start saving and investing. Even if you only use your retirement investments to cover emergencies, that is money you can earn investment income on and with other government assisted programs for retirement and healthcare, might avoid touching for many years. If you are in your forties and start saving $17,000 a year, in 24 years, you can earn in excess of $1,000,000, depending on what you invest in and the rate of return you average.
Add in for inflation and the total years to get to that total are is 27. So if you are 40 now, you can reach an inflation-adjusted investment total of $1,000,000 by the time you are 71, which is not an unreasonable assumption for retirement age given where programs like Social Security are headed.
The temptation if you are lagging in retirement funds and just starting to work with retirement investment companies is to increase your exposure to make up for lost time. This is OK in a controlled environment, but should be kept to a minimum. The reason is that increased risk is just that and you are assuming it could wipe you out rather than yield a higher return.
A good rule is to align your risk with your age. Thus, if you are in your 40’s, the risk you will tolerate should be slightly higher than if you are in your 50’s and so on, based on an average annual return on investment of 7% in your 60’s and 10 or 12 percent in your 20’s or 30’s. That way, if you do get caught in a market correction, you are not wiped out and can recover fairly quickly if you have the patience.
Building for retirement is something almost everyone should do as soon as they can. If you do not when you are younger, however, it is not the end of the world. With planning, working with retirement investment companies in Jefferson, NC, and adopting a disciplined and aggressive savings strategy, you can make up for lost time quicker than you think.