Retirement without proper planning and being left with no money to care for oneself during old aga can be a curse. On you reach that stage, many wonders you would have been saved enough to support yourself, but it may be too late to start thinking so only at that point in life. However, things need not have to be that complicated if you start to plan things well ahead. Here are some expert tips about making smart investments for retirement to enjoy life.
Scott Tominaga – How much do you need for retirement?
Scott Tominaga suggests that you cannot exactly predict the needs during your retirement, which may vary from case to case. If you are unsure about it and want to get some standard examples, you may look at the study results below.
A recent study conducted by a leading financial studies university came up with a suggestion for an average citizen to plan their savings for retirement. For example, people who retired during the year the 1980s may have spent about $46,000 on an average year for their basic living expenses if they are still alive. The same study also predicts that people may need about $69,000 a year during retirement in the 2040s.
What do you earn during retirement?
Very few people may get a steady pension from their employer during retirement, so you need to have funds ready to give you some assured income. Another study by the Chicago Tribune shows that about one-third of the retired seniors simply rely on the social security pension payments as their retirement income. However, this is only about $1,300 per month in the United States, which is less to meet the cost of living even for a senior citizen. On the other hand, if you are on a pension plan you created during your employment, it will give you some steady income to live comfortably during retirement.
How much should you save for retirement?
As we have seen many research and survey reports above, let us explore another survey by the Bankrate research team, which shows the habits of Americans on saving for retirement. Only one-third of the people surveyed anything saved as retirement funds, which come to an average of about $25,000. Better social security and health insurance supports may be the reasons that people do not have a habit of accumulating retirement funds.
What type of investments to choose for a retirement portfolio?
You need to look at various factors while considering investments for a retirement portfolio. Here are some guidelines.
- Stocks: Less than 50% of your money can be put into stocks as these typically may earn higher returns based on your risk level.
- Bonds: Bonds may provide more steadily over a longer period and surely have some upward growth potential which the stocks do not always offer. Having a particular percentage in bonds can also help to reduce the overall risk.
- Cash: It is advisable to keep at least liquid funds worth to survive for eight months of expenses and any emergencies for retirement funds.
- Commodities: One should consider about 10% of commodities and non-traditional investment vehicles investments. This may help increase the overall returns over time by controlling the risks of other investments.
While considering the retirement portfolio management, Scott Tominaga points out the trust as no one knows what may happen over time with the interest rates, cost of living, inflation, or the economic conditions 20 years from now. So, you need to be thoughtful and balanced in identifying and investing in retirement plans.