Nearly one-third of baby boomers over the age of 55 have neglected investing for retirement, thus saving less than $10,000 for those golden years. A mere 22 percent have socked away $250,000 or more. By the time you reach age 50, much of your major financial obligations should be well behind you. Experts predict, by the time retirement rolls around, you should have saved up approximately four times your annual income. In fact, studies indicate you’ll most likely need more than $1 million, but most are inadequately prepared.
The most serious blunder most people make is under-estimating the importance of investing for retirement and not planning ahead. Surprisingly, only one in four savers has a plan to guide his or her retirement decisions. Regardless of whether you are retiring soon or far in the future, now is a good time to take inventory of your current financial portfolio.
Two of the main types of investment vehicles for retirement you should primarily focus on are gold for retirement and annunities for retirement;
Investing in Annunities for Retirement
Ask most retirees and they have this fear of outliving their retirement funds and the recent economic crisis sure didn’t relieve that fear. At the very least a venture into annuities are more stable and rewarding.
Most annuities are based on a portfolio of government and corporate bonds, but called variable annuities are based on index funds in the stock market.
• There are fixed annuities that are the most basic type and has benefits for your spouse, and children as well
• There are immediate annuities that help defer taxes and offers distribution options on the amount and type of contract as well
• And there are variable annuities that offer long-term investments for a lifetime of income. It offers tax benefits that are also extended to the beneficiaries listed in the investment portfolio Income options are flexible and all things considered, that’s not bad
Until recently, annuities were the least appreciated and most overlooked retirement tool; but this tool is a gift that keeps on giving and can help retirees survive and provide a buffer against a down market.
The biggest reason people choose to invest in annuities is to have an income that will last forever. Annuities decrease the chance that retirees will die impoverished, making this a simple solution for small investors to diversity their retirement portfolio with less risk. Some of the features of annuities include;
• Initial premium is low; you can purchase an annuity in installments for as low as $50 in sponsored retirement plans.
• Investment options; you have options that allow you to invest your premiums into various mutual funds that you select.
• Death benefit; annuities offer you the option to pass on your retirement, upon your death to your beneficiaries.
All annuities offer a guarantee; a guaranteed income, a guarantee against the loss of any principal, and a guaranteed rate of return on your investment. This is one of the most important determining factors and why annuities have become a #1 product.
Shopping among different annuity policies is the safest form of fire to ensure that you get the best performance thus the most convenient service and the safest policy.
Investments that Withstand Volatility
The value of investment accounts still remain on shaky ground, which has many moving investments to a secure a Gold IRA rollover. In fact, the option to invest in precious metals has always been available, and a preferred investment for the elite. Now, the trend is emerging as one of the best options to secure retirement funds. Since the plummet of the U.S. economy, choosing a precious metal investment and the choice to Convert IRA to gold is becoming more widely used.
Gold holds a timeless appeal, especially for those who are concerned about the volatility of the stock market, receding retirement accounts, inflation, and devaluation of the American dollar. More investors are looking at the physical gold IRA for its practical applications and the truth is, investors have better options and more control when building a portfolio with gold for retirement.
Remember the days when the value of your IRA kept you feeling safe? Well don’t look now but the majority of accounts have fallen to 60% or less of their value since the day they were opened.
The good news is, if you transfer your 401k to a precious metals IRA, you will not have to go through an employer. Instead, you can work with an independent broker to handle your Gold IRA rollover and manage it.
Advantages of Gold Investments At-A-Glance
• Gold is the only currency that is not under the control of any government and, therefore, in which politicians can not influence.
• Paper money is constantly losing value
• Gold is a safe haven in a crisis scenario. While traditional diversifiers like government bonds and substitute dealings, usually are unsuccessful at times when the market is under stress and shows instability, gold typically improves the portfolios during those times
• There is more appreciation of gold today in emerging economies. China has one of the highest savings rates in the world and now that Chinese law changed, they allow private investors to buy gold. Additionally, India is the largest consumer of gold in the world
• Gold is a highly liquid investment. It is both an asset and a currency. Among investment possibilities, there are very few that can be converted as easily and quickly as gold currency: you have no penalties, no waiting, and no strings attached
A gold IRA rollover has proven to be one of the most worthwhile mediums that continue to endure and should remain the primary asset in every portfolio.
The Best Insurance for Your Retirement
Everyone has already witnessed the American dollar plummet, along with the spending power. As expected, the de facto devaluation of the paper dollar also paralyzes retirement accounts, bonds, stocks, and even your regular savings accounts.
Of course, employers and banks would rather keep you in-the-dark and leave your investments as-is. No matter how you look at it, gold will buy more tangible items than a piece of paper. Therefore, by choosing to diversify your investments and include precious metals you avoid any devaluation.
On the other hand, precious metals are much more isolated from shifts and changes in the global economy. In fact, as our paper dollar plummets, investment in precious metals has been leading to huge profits.
Gold investments are a safe haven and not only a wise investment but a great choice to preserve future purchasing power when investing for retirement.
How Much Money Should I Save for Retirement?
Would you believe the majority of people procrastinate when it comes to pre-planning for those golden years? Unless you plan on working until literally, the very last day of your life, retirement planning, whatever the age, should be one of your principal financial goals.
Something worth a dollar today can cost significantly more tomorrow, and of course history shows that things always cost more over time. Considering this dynamic, it becomes obvious that doing nothing with your money will cause you to lose your purchasing power. Your lack of planning or errors in this planning can be a real headache in the future.
5 basic questions everyone should consider when investing for retirement
- What is my current age – I am a X years old who earns $ monthly
- What years I hope to retire – At age 55, 65, 70? (65 years old is the most common)
- The number of years until retirement. – How many years do you have to save until you retire? Keep in mind, a person typically lives another 20 years after retiring
- How much income will I need during retirement? Undoubtedly, you will have monthly bills, and personal expenses, hence you will need to figure out what percentage of your disposable income is required for necessities
- Additional income needed to live my dreams — many of us adopt a certain lifestyle today, yet retirement funds will not support those dreams. You should consider any additional income you may need.
Common Mistakes People Make When Investing for Retirement
• Spending all or part of the money you have planned for retirement
• Planning too late and that the numbers, when planning, are too high to reach the target
• Not having a plan for the future or planning
• Not realizing that inflation affects savings
• Believing that your employee pension plan can fix the situation
When should you start saving for retirement
One thing is clear: it’s never too early to start saving, and if you are near retirement you should make extra efforts and save the maximum amount of money every month to have peace.
You have to take into account your personal circumstances: Your sex is a factor in life expectancy since women live longer than men and retire much earlier than men, so they should start saving before retirement and at a higher percentage.
As you can see there’s a lot to consider about your future retirement plans, and never put off pre-planning because investing for retirement is not only important, but one of your most challenging decisions.