Retirement Tips

This is National Retirement Week. Have you saved enough for your retirement? If not, why? There are many ways to plan for retirement. Whatever method you choose it is a known fact that unless you are born in a wealthy family you will have to save for retirement. If you retire at age 65 you could live another 10-20 years which means you will need on average $1,000,000 to $1,600,000 depending on your salary.

This translates into contributing to a retirement account for a minimum of 20 years depending on your salary but more likely for 25 to 30 years or more on a consistent basis. The key to planning for retirement is to start planning as soon as your get your first job, planning early eliminates the need to play catch-up in your later years in life.

However, it is never too late to plan for retirement. No matter what your age you should put some money aside for your retirement even if you have to get a job after retirement which is better than having no money saved at all. Many people do not save enough and end up having to work well past their desired retirement age or have to get part-time jobs because social security is not enough to cover all of their expenses. Don't panic and get overwhelmed by the media, fear, anxiety and nervousness of those around you. Don’t let emotions cause you to make bad decisions. If it sounds too good to be true it is. Don’t let someone invest money for you that is not a licensed financial advisor.

How to Save for Retirement:
1. CDs/Bonds/Mutual Funds
2. Pay down debt
3. Contribute extra to your 401(k) or other retirement account
4. The motto is "buy low, sell high" is truly appropriate during an economic crisis. This is a great time to buy stocks or to invest in a mutual fund. When the market bounces back you will achieve great gains.
5. Sign up for matching employer contributions (free money)
6. Increase retirement contributions with each salary increase
7. Save at least 10-20% towards retirement
8. Scale back expenses within at least 1 to 5 years prior to your retirement date
9. Don't depend on your spouse's retirement account because your spouse may not have saved enough money for retirement
10. Review allocations yearly to make any necessary adjustments. Check your statement for any errors and notify your financial planner immediately.

Diversify at a minimum:
Pre-retirement invest 60% stocks, 40% bonds/cash; near retirement (5-10 years) invest 40% stocks, 60% bonds/cash; during retirement invest 20% stocks, 80% bonds/cash.

What to invest in:
1. Invest in emerging market funds (foreign markets)
2. Equities (mutual funds) or other items that return a dividend or capital gains
3. Pharmaceuticals
4. Oil and petroleum
5. Commodities (corn, soy, wheat, coffee beans, petroleum, copper, coal, salt, sugar, soy beans, aluminum, rice, gold, silver, palladium, platinum, electricity, gas, oil, etc.) when the prices are low.
6. Real estate, if the home’s value is low it can continue to decrease but over a long period of time you will gain equity and can make a profit
7. Defensive stocks don’t depend on economic prosperity such as the food and beverage industry, manufacturing companies such as Philip Morris, Proctor & Gamble and alcohol and tobacco
8. Under-priced stocks (offer price is lower than price of the first trade, however they carry a higher risk factor because they may not rise in the future) – IPO’s, airline stocks, small cap stocks, etc.
9. Utility stocks – water, gas, electric, telephone companies
10. Green technology and green energy stocks for long-term gains such as Canon, Green Mountain Coffee Roasters, Nike, Whole Foods, Google, etc.
11. Invest in Dividend Reinvestment Plan (DRIPs) to offset any losses you may have experienced or use it as an easy way to start investing.