When you think of retirement, you usually imagine an elderly couple, spending the winter of their lives peacefully and happy and travelling around the world. However, to make this come true for you, you have to plan for your retirement.
Health statistics show that retirement can last nearly as long your working careers, and 25 or 30 years to live without a paycheck. The earlier you start to save for retirement, the better you will spend the last quarter of your life.
Hopefully, the strategies below will help you to invest your retirement money wisely.
Make Investments into Tax-Deferred Retirement Accounts: IRA, Roth IRA or 403(b)
Both the 403(b) plan and the IRA plan are long term investments that are not taxed on the growth until you take the money out.
A Roth IRA is similar to IRA, but with one important difference – you have to pay taxes on your annual deposit upfront but won’t ever pay any taxes on the growth.
Invest in Stocks and Stock Mutual Funds
Stock mutual funds are the greatest thing that you could do for your money. They have greater growth potential than bonds and, if chosen wisely, can pay off quite nicely. The beauty of stock mutual funds is that you don’t have to invest in dozens of individual stocks to create a diversified portfolio. By investing in stock mutual funds, you get that and professional management as a bonus.
Choose No-Load Funds with Small Fees
Say no to funds that charge commissions and sales charges for the fund. Instead, opt for no-load funds that don’t charge the sales commission and allow you to buy directly from the fund itself.
Compare management fees and choose the fund with the lowest charges.
Other than that, the basic rules remain the same – save as much money as possible, start saving as early as possible and contribute as much as possible to a tax-deferred account.