- (Re)-Build Your Retirement Savings
Whether you’re just starting to save for retirement or your retirement fund took a recession-induced nosedive, it’s still possible to meet your retirement goals and dreams. The good news is, whether you’re building or re-building your retirement fund, you’re young and you’ve got time on your side. Practicing these "dos and don'ts" are just a few of the ways you can get on track for retirement.
DON'T delay and pay the high cost of waiting.
The earlier you start, the easier it will be to achieve your retirement goals. Time is a powerful key to achieving financial security. Look at how saving early in life can increase your potential for a secure retirement:*
DON'T delay and pay the high cost of waiting.
The sooner you begin to save, the greater the growth potential on your investment. The chart above showed you how you compound your contributions if you start early. Now take a look at how much it will cost if you wait to start saving for retirement until you’re older.
DO take advantage of a down market.
Make the most of your money by investing in mutual funds when the stock market is down and prices are low. This way, you can buy more shares for less money. Then, when the stock market goes back up, you’ll have more shares that could potentially be worth more money.
While no one knows exactly how to “time” the market, systematically investing a certain amount each month over time regardless of what’s happening in the stock market has the potential to pay off. Systematic investing can’t assure a profit or protect against a loss, but if you’re investing over the long haul your systematic investing plan can ease your panic should the market go down periodically.
DON'T expect help from Uncle Sam.
Face it. Social Security might either be minimal or long gone by the time you'll reach retirement age, so don't factor it in.
"Without changes, by 2037 the Social Security Trust Fund will be exhausted… "1 Today, if the CPP/QPP plans are left as they are, an increasing number of Canadians will face an uncertain future in retirement.2 For most young adults, it is unlikely that most will receive a monthly pension check or health insurance in retirement from an employer. Bottom line? No one else is going to plan retirement for you. It’s something you’ll need to take care of yourself.
DO avoid being part of the status quo.
More than half of the Americans polled in the 2009 Retirement Confidence Survey reported that they have less than $25,000 saved for retirement. Yet, as a general rule, most people will need anywhere from 80% to 100% of their gross income during their early retirement years.
DON’T guess.
According to the 2009 Retirement Confidence Survey, “instead of doing a systematic retirement needs calculation, 44% of workers continue to guess at how much they will need to accumulate” for retirement. Make sure you do the math and factor in living expenses, the cost of living longer, medical expenses, etc.
Investing entails risk, including loss of principal. Shares, when redeemed, may be worth more or less than their orginal value.