Today with the economy seemingly in a free fall and increased attention on the importance of saving and planning for the future, many African Americans realize they need to start planning for retirement today.
The truth is that the sooner you start planning and saving for your retirement the more you will have available.
Few people will actually start planning for retirement today, especially if they are young and single.
But the truth is, starting your retirement planning when you are young and single is the best time to do it.
There are two main reasons for this: one reason is pretty obvious – the longer you save the more you will have.
It will be nice to know whenever retirement rolls around that you are ready for it and you can live a comfortable life for the rest of your life.
And two, it’s easier to get in the habit of saving and making (and living within) a budget when you don’t have a lot of expenses.
Starting a retirement plan early on before you are married and have children and college funds to worry about may make it easier to get into the habit of saving for retirement.
Many people make a mistake and actually don’t even think about saving for retirement until they are close to retirement age. You don’t want to let this happen to you.
The problem is that at that time they have many other obligations and a lot less time to save.
So, I hope that we’ve established that starting earlier is better.
Another very important thing to keep in mind is that you should never just turn your money over to a financial planner and “hope for the best”.
So many people did that and so many people have lost a substantial percentage of their retirement savings.
You see, the traditional wisdom is to “invest for the long term” and that you can “recoup your investments when the market rebounds”
But there are two major flaws with that logic:
1. You may not have time to recoup your savings and investments in time for your retirement.
How would it feel if you were to lose upwards of half of your retirement portfolio just a few years, or months, before you were set to retire?
Then what? Do you keep working? Do you retire on time and hope for the best? Do you move in with your grown kids?
2. Few really wealthy and successful investors lose much of their investments when the markets go south.
Why is that? Well, for many of them they are at least a little knowledgeable and they are part of their own investing team.
When they see signs that the markets are going down they will pull much of their money out and move it to another form of investments.
That way, they can keep their money in a safe haven during the crash.
So instead of having to recoup their investments, they’ve lost little or none of the investments in the first place.
Not only that, but in many cases their investments continued to grow during the market crash!
So while millions are scrambling and hoping they can recoup what they’ve lost ( a process that may take many years) savvy investors are actually making money during the down market.
Keep all this information in mind as you start planning for retirement today.
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