Planning for a Bright Future

About Me

Planning for a Bright Future

When I graduated college, I landed a dream job teaching accounting at a university. For five years I enthusiastically taught my students important accounting principles. During this time, I put a significant portion of my paychecks into a retirement fund. Because I’ve always been extremely conservative with my finances, I invested all of my cash into money market funds. Unfortunately, this decision did not yield great results. Now that I’m older and wiser, I’d like to rectify the retirement mistake I made when I was younger. On this blog, I hope you will discover the best types of funds to include in your retirement portfolio. Enjoy!

Is Your Retirement Just Around The Corner? It's Never Too Late To Make A Financial Plan

It's always better to begin saving for retirement when you're young. When you reinvest the earnings from your portfolio, the compound interest turns a small initial investment into a large asset. However, don't worry if you have not yet started saving for retirement. Whether you're in your 40s, 50s or 60s, you can make your retirement more comfortable by starting to save as soon as possible.

You have a few benefits working in your favor when you begin investing at a later age. You are likely earn more money than you were young, and have more funds available to set aside into your retirement account. You also have a better idea of what's necessary for you to live and what items are luxuries that you can do without. You may be required to make changes in your lifestyle to catch up to those who started saving early in their lives. Here's what you need to know about beginning to save for retirement at a later age.

Reduce Your Debt Burden Quickly to Free Up More Cash in Retirement

Working quickly to eliminate outstanding debt will rapidly improve your financial position. This may involve selling your current home (whether you own or mortgage the home) and moving into a smaller one that you can buy fully in cash in order to eliminate your monthly mortgage payment. Look into selling boats or cars if you can live without them. Your goal is to eliminate as many monthly debt payments as you can — these don't disappear when you retire from work, and eliminating them will free up cash that you can enjoy.

Consult With a Financial Planner to Craft a Portfolio With Acceptable Growth and Risk

When you're just beginning to save for retirement later in life, it's important to consult with financial planners to look at potential areas to save money and potential avenues of investment. A financial planner can point out opportunities you may be overlooking.

He or she can also help you formulate a sound investment strategy that matches your acceptable level of risk. Typically, those who save for retirement put money in riskier growth investments when they are young and slowly move their portfolio into more stable investments as they age. This helps to maximize the rate of return on the portfolio while the investor is young and the funds are not needed immediately. At the same time, switching to safer investments ensures that a market crash or economic downturn near retirement age doesn't wipe out a majority of the portfolio's assets. When you begin to save later in life, you have less time to grow your assets and may need to make riskier investments — your financial planner will help you decide what level of risk is acceptable to you.

By reducing your debt burden so that more of your money is going toward your retirement account and eliminating bills that would continue with you into retirement, you create a comfortable financial space in which to spend your later years. Contact a qualified financial planner to formulate a strategy to pay down your debts and design a portfolio that meets your risk goals to make sure you retire with enough money to maintain a comfortable lifestyle.