You have a job. You go to work every day and bring home a paycheck every week. You pay your bills every month, fill your fridge and put gas in your car to get to work. Any money that is left is yours to spend, right? What else would you do with that money? This is a common thought pattern of many residents of our country. Most people are unaware of the need to create a savings account for emergencies. Most people are unaware of the importance of contributing to a retirement account early on, to guarantee that you have enough to actually retire. Most people were never told these things, and most find them out too late. Financial advisors are important in creating a unique savings plan that is based on your individual income and savings needs.
Lack of retirement funds is and will continue to be a huge problem for the residents of our country. Most people do not have enough money to retire and are nearing their retirement age. In fact, 1 in 5 people who are near retirement age have zero money saved. This will cause them have to work longer into their retirement years and to potentially never have the ability to retire. Otherwise, they may retire and live in poverty for the rest of their lives.
Retirement funds should begin as early as the 20s. It may be hard for someone in their 20s to contribute any portion of their paycheck into a retirement account, but it is necessary to do so. Additionally, financial advisors will inform clients that putting money into your retirement account in your 20s will guarantee that you have even more money come retirement account. In addition to the obvious additional payments throughout the years of your twenties, the compounding interest will add even more money into your account. The difference between starting to invest in your 20s versus your 30s is amazing. Financial planners will provide this information to you.
Just 53% of the civilian workforce participates in or contributes to a retirement plan, according to the U.S. Bureau of Labor Statistics. This is a troubling number, leaving almost half of the civilian population unprepared for retirement. It is important that anyone coming home with a paycheck inquire into asset management or retirement information to prepare for their future.
Financial advisors will also provide valuable information on the possibilities of investing. When you are contributing to a retirement fund in your 20s, you have the ability to be a little more risky with your investments. You are better able to play with different stock options and retirement funds, attempting to increase your returns. Someone who is nearing retirement age will not want to make those same risks, in the event that they lose a large portion of their retirement money. A financial advisor is a great resource for information on which stocks and investments are more or less risky.
Many jobs provide their employees with the option of automatically putting a portion of their paychecks into a retirement account. Some jobs will even match this investment up to a certain percentage. Many younger employees do not see the need for this, as they cannot vision their retirement with it being so many years away. It is important to always contribute the full amount into the retirement account to profit off of the compounded interest. Financial advisors will also recommend that you invest the full amount in order to receive the matched percentage. The added income from your employer is just like a raise.
Many Americans are not aware and do not think about their retirement. It is important to, however to prepare for your retirement early on. You will receive the best investment options and you will get the best return on your money if you choose to invest in your 20s and on. Additionally, employees should always take advantage of automatic investment plans, especially when their employers will match their investments. Financial planners are a great resource for choosing and learning about the different risk options that are available for investing for retirement accounts.