7retirement mistakes to avoid
Post on 23-Jan-2017
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Research says 60% of workers dont calculate how much money they need to save for their retirement income needs. You must set them goal and then design a plan to achieve it.
As individuals enter their 60s, their financial literacy and decision-making often starts to decline. Retirees can use aspects of financial planning that cope with the aging process in later years to ensure they can maintain their investments and avoid financial scams.
Retirees roll money out of company plans with less knowledge in investments, they become easy prey for salesmen offering annuities & risk-free money management. A single mis-step could cost you lots of money.
In ideal markets, it takes 7 years to double your money and about 25 years for it to lose half its value from inflation. Hence, the best long-term investment portfolio will bring you a return above inflation with as little risk as possible.
The best option is to cut down the risk and relying on a portfolio of bonds, real estate and dividend-paying blue chip stocks to reduce the risk of panic are the next best option.
Then there's always the risk of losing ground to inflation if rates rise and bond values plummet. A small percentage of equities can bring an extra bump of return one need to offset rising inflation over long time.
Avoiding stock market risk increases other types of risk. For instance, there's longevity risk, or the risk of outliving one's money. One shouldn't think of short-term and others asbeing risk-free asset.
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