|Retirement planning and investing for retirement are important - no matter which retirement plan you choose. Your FRS retirement plan by itself cannot provide enough for a comfortable retirement. Everyone needs to learn about saving and investing to help close the gap.
So, no matter which plan you choose, you owe it to yourself to learn all you can about how to plan and invest for your retirement.
These ten keys to retirement planning and investing will help you get started.
- How much will you need?
Most experts agree that you'll need 70% - 90% of your pre-retirement yearly income to enjoy the same lifestyle you had before you retired.
- Where will you get it?
You will need three main retirement sources: your FRS retirement benefits, Social Security, and outside savings.
- Put time on your side
If you start saving early for your retirement, you can take advantage of getting "earnings on your earnings."
- Put off paying taxes on your savings
Take advantage of any opportunities you have to save with pre-tax payroll deductions.
- Make sure you don't outlast your money
An annuity can guarantee that you'll receive monthly income for the rest of your life, even if you live a really long time.
- No pain, no gain
Keeping your retirement savings only in "safe" investments may help you sleep better now, but could give you sleepless nights during retirement. Invest in some riskier investments to keep ahead of inflation.
- Plan your meal before you shop
Trying to pick the "best" mutual funds without a strategy for how they fit together is a loser's game. 90% of your retirement success will be based on getting the right mix.
- Patience is a virtue
No one has a crystal ball to warn them when the market will fall. Successful investors have a long-term plan.
- Watch those fees
What you don't see can hurt your savings. Avoid unnecessary fees, to make sure your money works for you.
- Keep your head out of the sand
You're the customer, so take charge. Understand your rights, ask hard questions and do what's in your best interest, whenever you are investing.