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Tags: retirement | wealth | planning | investor

CNN Money: 4 Strategies to Boost Your Retirement Wealth

CNN Money: 4 Strategies to Boost Your Retirement Wealth
(Dollar Photo Club)

By    |   Thursday, 28 July 2016 08:08 AM

So maybe you haven’t saved all of your life for your retirement, and you’re just counting on winning the lottery to fund your golden years.

A big part of your lack of planning may be that you feel a bit inadequate in your financial knowledge and economic prowess.

CNN Money recently offered four simple strategies to help you start building your nest egg: all based on common sense and not economic degrees.

“You don’t have to be a financial whiz kid or have the acumen of a Warren Buffett to make smart money decisions,” writes Walter Updegrave, the editor of RealDealRetirement.com.

He said if you follow the “core four” commandments of retirement planning success “you’ll have pretty much all the financial knowledge you need to significantly improve your odds of achieving a happy and secure post-career life.”

His four tips:
  • Saving discipline is more important than investing skill. “The more you save, the larger your nest egg will be, whatever your investments may earn. If anything, the amount you save will play an even larger role in determining how well you’ll live in retirement given today’s low yields and the likelihood that future investment returns will be much lower than in the past,” he said. You also don’t have to make daily checks on the volatile stock market and tweak your investments.
  • Being a passive investor can pay off. “Rather than trying to identify actively managed funds that may or may not rank at the top of the performance charts over a given period, you’re much better off entrusting most, if not all, of your retirement savings to “passive” investments, or stock and bond index funds that track, rather than try to beat, their market indexes.”
  • Worry more about slashing expenses than increasing returns. “The easiest way to reduce the amount you pay in investment management fees is to stick to low-cost index funds and ETFs, many of which charge less than 0.20% a year in annual expenses. If you’re paying a financial adviser to help you prepare for retirement, you’ll also want to make sure you’re not overpaying there as well, since any money you shell out in fees can ultimately have an impact on how large your nest egg might grow and how long it might last.
  • Sacrifice your ego for big dividends. “Too often we convince ourselves that we know more than we actually do. Witness how many times over the past few years — the Brexit episode being the most recent example — that pundits predicted the imminent demise of this bull market, only to see it climb to new highs,” he said. "So as you plan your course to and through retirement, stay humble and avoid overconfidence. The more you remain aware of the limitations of your knowledge and abilities, the more prudently you’ll be able to plan and invest in an inherently uncertain world."

Meanwhile, a recent new survey of retirement confidence confirms that many workers lack realistic plans for making ends meet in retirement. It also suggests there is a disconnect between Americans' confidence about retirement and their actual preparations to ensure a comfortable one.

The Retirement Confidence Survey published by the Employee Benefit Research Institute (EBRI) is the longest-running annual survey of retirement confidence among both workers and today’s retirees — this is the 26th annual edition. It provides a long view of how we are doing as a country in preparing for retirement, and this year’s survey does contain some encouraging news.

EBRI found that the percentage of workers who are confident about having enough money for a comfortable retirement has continued to recover from the record lows following the Great Recession, Reuters reported. Twenty-one percent are very confident this year, compared with 13 percent in 2013. Those who are somewhat confident rose to 42 percent, up from 38 percent in 2013.

So that means 63 percent of those surveyed have some degree of confidence. But here is the problem — many people are just guessing. Only 48 percent of workers say that they or their spouse have ever tried to calculate how much they will to have save to live comfortably in retirement.  
(Newsmax wire services contributed to this report).

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So maybe you haven't saved all of your life for your retirement, and you're just counting on winning the lottery to fund your golden years.
retirement, wealth, planning, investor
Thursday, 28 July 2016 08:08 AM
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