Successfully Planning For a Secure Financial Future

Financial growth

There is not enough awareness around investments and the importance of saving in our country. A large percentage of young workers do not have anything saved for a financial emergency. An even larger percentage of those close to retirement age have nothing saved to retire! Learning about the benefits of investing and saving too late can severely affect the success and comfort of your financial future. Consider the following investment tips, regardless of your age or closeness to retirement age.

Build an emergency savings fund Too many Americans would be bankrupt or completely broke if they were met with a financial emergency. Putting even a few dollars a week away when you begin working can slowly build up an emergency savings fund. The fund should be contributed to until you have at least 6 full months of expenses if you were to lose your income. However, most financial advisors will encourage up to 12 months of savings.

Begin contributing to your retirement account now Even if you are in your 20?s, it is important to begin saving for retirement now. Retirement will come before you know it and you may not have enough to comfortably retire. If you plan for your retirement from the moment you begin working, compounding interest will grow your fund much quicker. One in five people who are near retirement age have zero money saved.

Most of these people near retirement age wish that someone would have explained retirement and compounding interest to them better. However, in a recent survey, about 41% of people ages 18 to 29 said they never thought about retirement planning. Retirement is simply not something on the mind of someone who is in their 20?s, even though this is the crucial period to begin saving for it.

Invest in stocks based on your age The specific stocks that you invest in should depend on your age and how close you are to retirement. If you are nearing retirement in the next few years, you will want to choose stocks that are less risky. Losing a lot of money in the stock market could prevent you from retiring when planned. If you are in your 20?s and still have many years until retirement, you can be more risky with your investments. The higher risk investments can pay off more in profits, but could result in you losing a significant amount of money.

Always contribute to matched 401Ks Many employers today will match your 401K retirement account. Regardless of your situation, it is extremely important to contribute at least the full amount that your employer will match. Otherwise, you are giving away free money. Some even look at this as a pay increase, because your employer is giving you more money for simply putting money into a retirement account, something that you should be doing anyways.

Too many employees do not take advantage of these employer matched retirement accounts. Just 53% of the civilian workforce participates in or contributes to a retirement plan, according to the U.S. Bureau of Labor Statistics. That means that almost 50% of people who could be receiving free money toward their retirements are not. All financial planners will recommend matching free 401K accounts as your first step in taking control of your financial future.

Work with a financial services company Most people do not take advantage of compounding interest or matched 401K accounts because they simply do not know about them. Working with a financial services company can provide you with this necessary knowledge and a variety of financial opportunities that will better prepare you for any emergency or for your upcoming retirement.

In the next few years, many people will be at retirement age and will not have enough money to do so. People who learn about the benefit of early saving for retirement too late may have to work longer than expected. Retirement and emergency savings accounts should begin from your first paycheck. Working with a financial planner can be successfully prepare you and ensure that you are right on track for your retirement.

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