Building Sufficient Funds for Retirement

We've all heard the dire warnings that social security benefits won't last, and that those of us 40 and under might not receive the monthly payments we're counting on once we retire. When you factor in how much of a hit investment portfolios have taken in recent years due to the general state of the economy and stock market, it's no wonder more and more people are worrying about how they're going to build up sufficient funds for retirement.

I think it's safe to say that most folks imagine life after 65 as their "golden years". After retiring, they'll be able to relax, do all the things they've always wanted to do, and finally live life to the fullest. It's a time for traveling the world, taking on a new hobby, and spoiling the grandkids rotten. We just trust that our 401k plans and other funds for retirement will carry us through, and we won't have to worry about finding another source of income.

But if past economic downturns have taught us anything, it's that we can't count on our portfolios holding their value indefinitely. We have to be smarter about our investing so we can retire sooner and live better once we reach the end of our working careers. We cannot pull out of the market entirely, because just putting money under our mattress won't allow us to accumulate the necessary funds for retirement. Instead, we have to learn how to make safe, low-risk investments that will grow steadily year after year.

An important first step in this process is to visit a top financial planner in your area for a consultation. Most of these consultations are free, and will give you a good idea of how the broker intends to invest your money. You should trust your instincts when meeting with planners and advisers. If the person comes off as too much of a smooth talker and reminds you more of a used car salesman than a trustworthy investor, then follow your gut and walk away. It's far better to invest safely with some peace of mind than to chase unrealistic returns in an effort to quickly build funds for retirement.

Your adviser will probably guide you through the intricacies of 401k plans or the benefits of opening a Roth IRA, since these are the two most common ways to help sock away funds for retirement. Before committing your money, be sure to ask about early withdrawal penalties, hardship withdrawals, and income taxes once you start withdrawing. These are critical considerations that can impact your long-term financial health. You might also want to check out a good mutual fund, some high-yield bonds, certificates of deposit, blue chip stocks, and other stable financial instruments.

If you're worrying about how you can build sufficient funds for retirement, you're not alone. This is an issue that most of us wrestle with more and more as we get closer to that magic age of 65. But some good, sound financial planning now can go a long way towards making the golden years truly carefree and rewarding, so talk to a qualified professional today!