Retirement investing isn’t just for the middle-aged. It’s something everyone should plan for.
It happens in a blink: One minute you’re 25 and saying “Hey, I’m far too young to think about, retirement” and the next it seems you’re getting that ‘Congratulations you’re old” letter from retirement groups.
That “too young to think about retirement” mindset is exactly why too many individuals are unprepared when it does happen.
Planning for retirement needs to begin the moment you start working, so you can set yourself on the right track for retirement, and healthy financial habits.
Retirement Planning Begins The Minute You Start Working
When you’re in your 20s, your mind is completely focused on ways to move up in your career. Young workers often envision how long they can work at their jobs–and aim toward those higher positions that they can acquire after a considerable amount of experience.
Think about this, though: Many individuals don’t end up staying in one job or even one field anymore. And oftentimes with a job shift, also comes a temporary pay cut.
By saving for retirement early, you also protect yourself from other unforeseen life events and temporary pay cuts, since you’ll have money set aside in case you absolutely need it.
Manage Your Money Responsibly, With An Eye Always Toward The Long-Term Horizon
If you don’t already have an investment manager, think about getting one.
“Our advice would be to search out an investment manager that has experience, discipline, integrity and a strong investment process that will succeed in any market Dynamic,” says Hilton Capital Management.
Hilton Capital Management is a New York City-area investment firm whose philosophy is “capital preservation with reduced risk.”
Another Reason To Start Planning Early
Early planning is essential for acquiring the amount of money needed to retire. This amount could total in the millions of dollars depending on lifestyle, location, and factors like inflation.
Time can help an individual make retirement possible by using the power of compound interest.
For instance, beginning in their 20s, individuals place a small amount of money into their 401(k) or IRA retirement accounts every month. People begin to contribute more and more in their 30s, 40s, and 50s so each decade will see more.
Also consider that the IRA money is often supplemented by an employer in the form of a match. Monthly contributions are placed into stock or bond accounts that hopefully make money over time.
The result of this growth is that small sums of money can become massive over a period of many years and can multiply rapidly.
Early Planning Helps Manage Risk
Investing is a long term plan and, as Hilton Capital Management said, the landscape is always changing. There are bound to be ups and downs.
If an individual has an appetite for higher risk, they might not be able to do so if they are older, since the won’t have the same amount the recovery time if risky investments do not end up working out over the short-term.