When To Start Saving And Investing For Your Retirement

When To Start Saving And Investing For Your Retirement
  • Opening Intro -

    While retirement sounds to some like something that is very far away into the future, saving for retirement is something that should begin as soon as possible.

    The sooner the better.


Many people start focusing on their retirement savings very late into their life, and while it’s never too late to get started, making sure that you start saving money from an early point has certain advantages. Starting early is the first advice that anyone is going to give you when it comes to your retirement savings.

Investing Early

Investing should begin right away, in order to let compound interest work int your favor. If you are able to invest a large amount of money when you are young then you won’t have to worry about your budget during your older years. It’s important to find a good balance when it comes to risk and investment return. In case you started saving late and want to catch up or if you want to make sure that you get all the money possible, you have to stay smart when it comes to your investing strategies.

Foreign Currencies

Depending on how savvy you are about investing, there are certain areas you can look into in order to find out whether or not that investment strategy is for you.

For example, Vietnamese currency is currently being watched as a foreign currency investment as far as long-term investments go.

There have been many recoveries happening in Vietnam since the war, but there is still a ways to go. Currently, the dong (Vietnamese currency) equals 0.000043 US dollars.

Constructing A Portfolio For Your Retirement

Having a portfolio of stock and bond index funds is a common way to generate retirement income – working with a financial advisor can be helpful. Having a portfolio helps when it comes to generating long-term returns.

Down the line, during your retirement years, you can figure out a set of withdrawal rules, in order to make sure that you’re making the most of the money while at the same time you’re not spending all of it during the first year – generally 4% to 7% per year is a good rule.

This form of "total return" portfolio means that you are looking at up to 20-year average annual return which meets (or in some cases exceeds) the withdrawal rate that you set out. This is an approach used by experienced investors, which means that having an advisor will ensure that your money is being handled right.

Your 401(k)

Contributing to your 401(k) should be a part of your retirement plan if you’re working at a for-profit employer. Being eligible for a traditional 401(k) plan offered by your employer means that you can contribute pre-tax money.

Signing up for a 401(k) can be done at any point by simply filling out a form highlighting the percentage of your paycheck that you want added to your savings account, with the employer taking care of the rest. In some cases, employers will raise the savings rate each year if they are allowed by you.

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How Much Money Should You Save

Setting out a goal and knowing how much you’re going to need will make the process of savings as well as investing easier. Generally speaking, you should save as much as possible. Setting out goals can also make the process of saving more rewarding, as you will gain the satisfaction that you met a milestone in your pursuit. Figure out at what age you might be able to retire and how much money you will need to save and invest in order to retire at that point in your life.

Figure out how big of a percentage you will want to take out of your account each year, and how much that percentage is. For example, you might consider taking out an X amount of money every year during your retirement to be enough for you to lead a comfortable life. If you know at one point you will retire and have the plan figured out, then things will become more clear.

If you choose to follow the "4 percent rule" (withdrawing 4% every year), then try to figure out how much money you will need in your account if you’re looking at 20 years of retirement in order for you to take out a steady amount every year and not worry about your savings.

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