Are Your Thoughts about Retirement Wrong?

Are Your Thoughts about Retirement Wrong?

As the baby boomer generation ages, they may rely on information that was good for their parent’s generation.  Our parents believed that a pension plan was an employer sponsor benefit that is based on your tenure with a company.  The days of showing up to work, doing your job well, and staying loyal to a company will no longer guarantee a comfortable retirement.

Assuming that Social Security plus a small pension check will be enough to live on is a bad assumption.  Pension and Social Security were never meant to be the primary source of income for those who retire.  Most people need to fund their own retirement and plan on putting money aside specifically for retirement.  It is time to get serious about retirement; because you can’t ignore the fact that one day you will have to retire it is unescapable.  Some people have preconceived ideas about retirement investing.

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  1. Retirement investing is not for old peopleOften times younger people do not realize that they can use time and compound interest to their advantage, however the other thing that they do not realize that the stock market will be an essential part of their investing future. When people think of savings, they automatically think of a savings account at a local bank, which yields extremely low rates of return.  Though there is a potential for risk in any investment, the stock market is the highest yielding investment option available.
  2. Retirement savings should not be put at risk, even if you only have a little saved.A little bit of risk in investments is a good thing, but like with everything else in life moderation is needed. The idea of putting your little bit of retirement savings at risk is more pressure and stress than some people are able to handle.  When you start to invest in the stock market you can choose from two different brokerages: one, a full-service brokerage and two, a discount brokerage.  With a full-service brokerage you are working with a professional advisor that sits down with you to determine your investment goals and works to meet those goals.  As a good rule of thumb it is in your best interest to not to give up your full control over your money and investment decisions, otherwise you may become a victim of ‘churn and burn’ profiting, where a stock brokers buys and sells stock for the soul purpose of generating commission fees. Should you find that you are a victim of these actions you need to find yourself a good securities attorney such as those at Thomas Law Group to determine your case.
  3. I’ll spend less when I retireGenerally, spending less when a person retires is not the case. When a person retires they try to complete things that they wanted to do while they were working like traveling and hobbies.  So, when a person initially retires they tend to spend more. Coupled with the face that the cost of living increases as we age, especially as health deteriorates and the possibility that you may need an assistant for living.
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