Retirement planning should be on everyone’s minds, but it’s a difficult concept for many people to correctly grasp. You have to imagine what your income, expenses, and life changes will be like years down the road while trying to anticipate what the economic landscape will look like during that time. This can be very daunting, especially if you don’t have a financial background. Fortunately, there are some basic principles of investing for your retirement that you can follow that will put you on the right path. These principles all align with the main goals of retirement investing, which are:
- Keeping your savings safe for when you need them
- Growing your savings faster than the rate of inflation
- Minimizing investment taxes and fees
To start off, you want to make sure that you’re living without any serious debt (not counting a mortgage). This means credit cards, car payments, or even student loans. It’s a basic principle to not live on debt while you’re trying to invest, since interest penalties can easily eat up any of the gains you’ve made on your investments.
While you’re investing, keep in mind that sometimes an investment will fail. To try to counteract this, you should plan to keep your savings growing at the same time as your investments as a sort of insurance policy. This way, you’ll have something to fall back on in retirement in case your Plan A does not work out. It’s also important at this time to understand your risk comfort level, meaning how you’ll react to changes in the market. This could make a huge difference in how you invest, which could make or break your retirement.
One of the most important aspects of investing for your retirement is to make decisions by yourself. This doesn’t mean that you shouldn’t take advice from financial professionals, however. You just need to keep in mind that the money you invest is yours and yours alone, and that you’re the one ultimately responsible for any investment outcomes. Financial planners and Los Angeles County elder law attorneys can provide guidance on different types of investments and any tax concerns that may come up, as well as keep you appraised on any changes to federal or state tax codes and regulations.
If you’d like more information about investing for your retirement, or if you’d like to review your existing retirement strategy with an experienced elder law attorney, please set up an appointment at our Los Angeles County elder law office by calling (818) 905-6088