Cracking Your Retirement Nest Egg
November 12, 2008
25 Things You Must Know Before You Tap Your 401K, IRA, or Other Retirement Savings Plan
Whatever you haveor haventput away, if you are getting serious about retirement, this book can show you the right moves to make and the pitfalls to avoid. Malaspinas tips will guide you to a worry free, financially well-organized retirement.
Margaret A. Malaspina is principal of Malaspina Communications, a firm that specializes in investment and financial communications and advises some of the nation’s largest investment companies. A former vice president of Fidelity, she helped launch the writing career of Peter Lynch and was part of the executive team that started Worth magazine. She is the author of Don’t Die Broke and is a guest on radio and television financial shows.
Cracking Your Retirement Nest Egg
What you should know about your retirement:
Saving for your retirement is very critical, and can help you to fulfill your dreams of relaxation and enjoyment in retirement. Although it may seem difficult, saving for retirement is not really difficult. Starting early, however, is very important when assuring a safe retirement later on. Saving for retirement involves some sacrifice, but you will enjoy the later years moreso if these sacrifices can be made earlier on. There are several opportunities of investment in saving for retirement.
The old mentality when saving for retirement has focused on conservative investing. This “low risk, income only” model of retirement investing was followed mostly throughout the 1950s, 60s, and 70s. Recently, however, increasing lifespans and inflation have made this conservative approach unsafe simply because it doesn’t take enough chances. Investing in bonds and safe stock only tends to result in small dividends that won’t be sufficient for a long and healthy retirement.
More modern retirement plans must take some risk in order to provide for the retirement that everyone wants. Because of inflation, dividends that sufficed in years past are no longer good enough. Riskier investments, often through a mutual fund, are necessary in order to provide the retirement that you have planned. The true threat anymore these days is that a retiree will run out of money. With a more diversified and risk taking portfolio, higher growth will allow a retiree to live in comfort. If this approach is taken early on, the investor can ride out poor markets and still come out with a significant nest egg.
One of the best ways to figure out if your plan is working is to work with one of the many online retirement calculators seen on the internet. Calculators such as CNNMoney.com or Bloomberg.com can really help to put your earnings in perspective. Although these calculators are certainly not perfect, they can give you a general idea of whether your investments are going to work in the long term.
Speaking with a financial adviser can also help in determining the soundness of your saving strategy. There are several crucial questions to ask yourself, such as whether you plan on living through income alone, or if you will withdraw from your investment principal. Planning for retirement is extremely important, and you must pace yourself financially in retirement.