Tags: Retirement | retirement | automatic investment plan | AIP

Automatic Investment Plan (AIP) and Your Retirement

By    |   Thursday, 11 June 2015 02:16 PM

Saving for retirement can be a daunting challenge. For many people, the best way to accomplish those retirement goals is to take the money before they see it in their checking account. One way to do this is through an Automatic Investment Plan (AIP).

There is nothing magical about an Automatic Investments Plan. According to Investopedia, the term is just a fancy way to say that an investor has an automatic draw from a savings or checking account or has money diverted from their paycheck directly into investments that can be used for retirement.

Free Retirement Calculator: When Can You Retire? — Click Here to Find Out

The advantage of this kind of investing is that it is automatic. Most people appreciate the ability to not have to worry about budgeting those funds, and potentially forgetting or being tempted to use that retirement investment dollar for a different monthly expense.

With an Automatic Investment Plan an investor chooses certain investments, and designates a regular amount of money to go toward the purchase of those investments.

For instance, if an investor wants to buy stock in the Ford Motor Company, he or she can set up a plan to buy $50 of stock twice a month on payday. These funds can be tax sheltered in a retirement account or simply be mutual fund or stock investments.

How Soon Can You Retire? Free Test Shows You When — Click Here

These plans are set up on an automatic basis, which means that regardless of market conditions, they will continue unless changed by the investor. Many investment firms offer users the opportunity to sign up and manage accounts online.

The term Automatic Investment Plan is used in a variety of ways. Some firms, such as Capital One, require investors to set up their own stock choices. Fidelity, on the other hand, uses the term Automatic Investment Plan for an option which simply allows investors to put more money into currently help mutual funds or other investments.

Fee structures for these kinds of investments will vary. Be aware there may be fees per transaction. Some are based on percentage invested. Some are flat fees. To be aware of what you will be paying, check for the fee schedule with the investment firm for account minimums and costs for automatic investments.

An Extremely Simple Way to Determine If You're Ready to Retire — Find Out Now

Related Stories:

© 2020 Newsmax. All rights reserved.


   
1Like our page
2Share
Money-Wire
Saving for retirement can be a daunting challenge. For many people, the best way to accomplish those retirement goals is to take the money before they see it in their checking account. One way to do this is through an Automatic Investment Plan (AIP).
retirement, automatic investment plan, AIP
422
2015-16-11
Thursday, 11 June 2015 02:16 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved