1. Stick to the plan. During a market recline, people tend to lower their contributions or do away with them altogether. We believe that if your goals have not changed than neither should your investment strategy. Wealth accumulation doesn’t happen without consistency and commitment.
2. Contribute as much as you can. The more and the earlier you can contribute to your retirement plan, the better you’ll be able to handle the sudden decrease or demise of a steady stream of income when you retire. And by all means, utilize your company’s maximum allowable contributions. Contributing the highest percentage to a company’s matching plan will have a positive and significant effect on your wealth accumulation.
3. Minimize the effects of risk. As you grow and accumulate wealth, there are always risks that present themselves that can chip away at your income. Maintaining a diversified portfolio is a strong measure to keep your investment balanced, but there are personal risks that need to be managed also. Your health, for one thing. Make sure to budget in health care, so if you become sick, you have the insurance to cover your health care expenses, which can considerably decrease your wealth accumulation if not managed properly.
4. Control your assets with an estate plan. With children and/or an extended family in the picture, a good estate plan can help you control your assets, while you’re alive and in the event of death. This plan would include a will and a directive or a power of attorney for your medical and financial care.
5. Pick a good financial advisor. A key to building your wealth is having someone looking out for your best interests, and who can help you determine a strategy and budget to pursue your retirement goals. And if you are close to retiring and don’t have a plan in place, an advisor is still an important factor in creating strategies with the goal of not outliving the money you have been saving for retirement.
For more information regarding realistic expectations involving wealth accumulation and retirement, visit Mooney Lyons at mooneylyons.com.
Content in this material is for the general information only and not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss.