Building a foundation for retirement

Posted 2023-05-24 19:00:14

20K

Building a foundation for retirement

Retirement can mean different things for different people. It could mean stopping work entirely and traveling the country. Or it might mean quitting a full-time job to work part time and pursue something you love.

Now, if you’re just getting started in a career, you may not be thinking about when you want to retire. Or what kind of lifestyle you want when you do. But just because you’re not thinking about it yet doesn’t mean you shouldn’t start preparing for it. Because the earlier you start saving for your retirement, the more flexibility you’ll have to create the future you want.

Retirement accounts

One way to get started is to open a retirement account and start contributing to it regularly. You can then choose to invest that money in things like stocks, bonds and mutual funds. By investing, you’re giving your retirement fund the opportunity to potentially grow over time.

There are, of course, some risks to investing. Investment accounts aren’t FDIC insured, and aren’t bank guaranteed. And as the market rises and falls, investments can lose value. However, historically, over the long term, there have been periods in which the market has recovered losses.

It’s also worth noting that some investments can be riskier or more volatile than others. And while not all investments may do well, on a whole, market growth has historically outpaced the rate of inflation. Of course, past performance is no guarantee of future results. But investing is one way of potentially offsetting the effects of inflation on your money over the long term.

401(k)s and IRAs

Now, let’s look at two types of retirement investment accounts you might encounter. Of course, there are many more, but for now, we’re just going to focus on two of the most common ones. Sometimes they’re referred to as retirement vehicles. You could even think of them as vehicles that can carry your money toward your financial goals.

Some retirement accounts might be offered through your employer, like a 401(k). Other accounts you can set up on your own, like individual retirement accounts or IRAs. Employer plans, like 401(k)s, are often set up so you can automatically set aside a portion of your paycheck to help build your account. Some companies even help out, by contributing an additional amount of money to your account. This can be an excellent benefit to take advantage of.

Accounts you set up on your own, like IRAs, won’t have that employer match. But you’ll have the freedom to shop around for an account that’s right for you – and typically choose between a larger selection of investments. You can manage these accounts on your own, or have a professional help you.

Retirement accounts like 401(k)s and IRAs offer tax advantages, but they also have potential drawbacks. For example, you could be charged a substantial amount of additional tax if you withdraw money from them early. Basically, they’re designed to encourage you to set money aside for retirement, and discourage you from being tempted to use the money you’ve invested before you retire. Whatever you might envision for your future, if you start early enough, time is on your side.

Conclusion

By doing your own research or working with a professional, you can start to create an investment plan that takes your personal goals and ideal retirement date into consideration.

Please log in to like, share and comment!

Business

10 Most Frequently Asked Questions About Project Management Tools

Project management tools have become essential for teams aiming to collaborate efficiently, stay...

By 2025-05-16 14:47:01 0 11K

Business

What Are the Best Practices for Collaborating with Brands and Sponsors?

Collaborating with brands and sponsors is a powerful way for content creators to monetize their...

By 2025-02-19 15:22:05 0 10K

Business

Frequency of One-on-One Meetings: Do I Have to Run Weekly 1:1s?

How Often Is Often Enough? One-on-one meetings (1:1s) are among the most important tools for...

By 2025-08-01 14:09:35 0 6K

Business

What Are the Best Digital Marketing Strategies for Startups?

Starting a business is exciting, but without a solid digital marketing strategy, it can be...

By 2025-03-14 16:14:00 0 11K

Business

Overall Satisfaction: Why It Matters and How to Measure It

Understanding how satisfied customers are with your product or service is one of the most...

By 2025-07-24 18:16:05 0 5K