Retirement Advice from Canopy South
What You Need to Know to Retire in Style
For many Americans, regardless of their age, the notion of “retirement” seems like a distant and foreign land. Twenty-somethings can’t fathom a time when they might turn 66, professionals in their 30s are too busy grabbing the next rung, workers in their 40s are juggling deadlines and soccer practices, and executives in their 50s have hit just their best marks. Who has time to think about retirement?
Take the time you need to develop a solid retirement plan. It pays off. Read our retirement guide today and then find a financial adviser you trust. Start saving for tomorrow.
Canopy South Capital Management’s Ultimate Guide to Retirement
Start Saving Now
We get it, the sun will come out tomorrow. Tomorrow’s another day. But let’s face it, there’s no time like the present. The earlier you start saving, the better off you’ll be. Here’s a great example of the miracle of compounding from CNN Money: “If you start early, the effects of compounding can be huge.
For example, suppose you start setting aside $1,000 a year (about $19 a week) when you're 25. You put it in a retirement account earning 7% a year. Even if you stop investing completely when you turn 35—that is, you've invested for only 10 years—your total investment will have grown to nearly $113,000 by the time you turn 65 and are ready to retire...Let's say you do the same exact thing, but you don't start investing the $1,000 a year until you turn 35. And you keep on investing that much every single year until you turn 65. How much do you wind up with when you're 65? Only about $101,000.”
How much you’ll actually need for a comfortable retirement depends on your lifestyle, income, and your retirement goals. A qualified financial adviser can help you develop a realistic goal.
Where Should You Put Your Retirement Savings?
In a word: everywhere. Take advantage of your employer’s retirement plans, such as a 401(k) or a 403(b) and capitalize on any employer contributions and other tax advantages. Put your money into an IRA, a Roth IRA, or a self-directed IRA. Invest in stocks, bonds, mutual funds, and real estate to round out and diversify your portfolio.
Beat the Market with an Automatic Savings Plan
Weather the ups and down of the stock market with grace and equanimity. When it comes to your retirement, you’re playing the long game. You can’t control what the market does, but you can control how much and how smart you save.
When stocks take a dive, the impulse to call your broker and get out of the game entirely may be strong. Don’t let your impulses take you down. Instead, adopt an automatic savings plan to help you ride the crests and swells of the market. If your employer offers them, sign up for automatic yearly increases to your retirement withholding or make a habit of upping your savings annually. Think of it as a birthday present to your future self. “More than 70% of employees who automatically increase their contributions are on track to a comfortable retirement, or almost there, says Rob Austin, director of retirement research at Aon Hewitt. (The firm defined success as saving 11 times salary by age 65.) That compares to an average of just 20% for all workers” (time.com/money).
When you implement an automatic savings strategy, market downturns look like opportunities for future growth. So when the wave crashes, all you need to do is smile and gather your resources for the next ride.
Make Sure Your Retirement Allocations are Growing Up with You
If you were wise and fortunate enough to have started investing when you were 22, it’s likely that your investments skewed towards the aggressive. As you draw closer to your targeted retirement age, whether it’s 55 or 66, you’ll want to work with your financial adviser to make sure that your portfolio reflects the appropriate level of risk with an appropriate balance of stocks, bonds, real estate, and cash. Plan on checking in on your investments and your allocations each year. Make sure your stocks are performing as promised and your mutual funds are the best available. Also, yearly check-ins allow you to buy low and sell high.
Keep Investing Throughout Your Retirement
For many, real estate may offer steady, reliable income stream. For others investing in real estate provides great control over appreciation. Look for solid investments, great locations, excellent partners. While there are many ways to invest in real estate, a Forbes contributor writes: “My personal preference: private placements, which are offerings that accredited investors can participate in through investment firms.” If you have limited experience investing in real estate, consider working with a Registered Investment Adviser who has experience investing in real estate.
For more information about retirement investing or to learn more about Canopy South Capital Management, contact us today.