For most people, the prospect of retiring can be an inviting proposition. Sadly, however, far too many people underestimate the amount of money they will need to maintain anything even remotely close to their current standard of living. Worse, some people fail to make any serious plans of any kind. To avoid having to rely on the mediocre income provided by Social Security, here's some advice for retirement planning Rockland MA workers need to consider.
The most important thing to remember is that there are only a finite number of working hours and years in the average worker's life. That means that, almost by definition, there is only so much time in which to plan for the end of one's career. As a result, every person should begin taking steps toward preparation as early as possible.
For most workers, any planning will involve a strategy of investments designed to maximize returns on savings. Though few people can manage to invest truly large sums in the stock market, the fact is that the vast majority of people can find some way to invest if they exercise common sense and solid budgeting practices.
Risk reduction is the key to successful investment, of course, and that most often translates into diversification. Smart investors utilize a combination of strategies that focus on stocks, mutual funds, and bonds. The exact mix of these different types of investments will evolve over the course of an investor's life, with a greater reliance on somewhat riskier investments in the younger years and a migration to safer vehicles as he gets older.
Never forget the benefits of the 401(k) plan either. These plans are offered by many employers, with some of those employers even going so far as to offer matching contributions. Along with that benefit, the structure of this investment vehicle makes it easy to manage investments over long periods of time, while enjoying the many tax benefits associated with the plans.
A worker's current lifestyle comes into play during planning as well. There is an obvious tendency for people to want to improve their standard of living as they age and make more money. It seems there's always a better car or a bigger house to buy. The drawback to that is obvious: every dollar spent frivolously today is one less dollar that can be invested for tomorrow.
It is also wise to learn to manage money efficiently while working. The average person lives from paycheck to paycheck, constantly spending every dollar he or she receives. While low incomes and other factors can sometimes make this a necessity, in many instances it is merely a matter of habit and an inability to live within one's means. Wasteful habits can dramatically reduce the money available upon retiring.
The fact is that all but the poorest among us should be able to manage some type of investment and savings strategy to prepare for those senior years. Almost anyone can ensure that his or her retirement is a comfortable one by starting early, developing a plan of frugality and common sense investments, and remaining focused on the end result.
The most important thing to remember is that there are only a finite number of working hours and years in the average worker's life. That means that, almost by definition, there is only so much time in which to plan for the end of one's career. As a result, every person should begin taking steps toward preparation as early as possible.
For most workers, any planning will involve a strategy of investments designed to maximize returns on savings. Though few people can manage to invest truly large sums in the stock market, the fact is that the vast majority of people can find some way to invest if they exercise common sense and solid budgeting practices.
Risk reduction is the key to successful investment, of course, and that most often translates into diversification. Smart investors utilize a combination of strategies that focus on stocks, mutual funds, and bonds. The exact mix of these different types of investments will evolve over the course of an investor's life, with a greater reliance on somewhat riskier investments in the younger years and a migration to safer vehicles as he gets older.
Never forget the benefits of the 401(k) plan either. These plans are offered by many employers, with some of those employers even going so far as to offer matching contributions. Along with that benefit, the structure of this investment vehicle makes it easy to manage investments over long periods of time, while enjoying the many tax benefits associated with the plans.
A worker's current lifestyle comes into play during planning as well. There is an obvious tendency for people to want to improve their standard of living as they age and make more money. It seems there's always a better car or a bigger house to buy. The drawback to that is obvious: every dollar spent frivolously today is one less dollar that can be invested for tomorrow.
It is also wise to learn to manage money efficiently while working. The average person lives from paycheck to paycheck, constantly spending every dollar he or she receives. While low incomes and other factors can sometimes make this a necessity, in many instances it is merely a matter of habit and an inability to live within one's means. Wasteful habits can dramatically reduce the money available upon retiring.
The fact is that all but the poorest among us should be able to manage some type of investment and savings strategy to prepare for those senior years. Almost anyone can ensure that his or her retirement is a comfortable one by starting early, developing a plan of frugality and common sense investments, and remaining focused on the end result.
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