Most people we encounter in our lives live by the ‘Deferred Life Plan’, which means putting endless hours of work in now for the hopes and dreams of a glorious retirement. History has shown us over and over again that far too often this isn’t the result. Thankfully, we’re about to share with you an investment strategy that has beaten the S&P 500 for over 100 years in a row and is profitable in ANY market environment!
Most people are truly lost when it comes to retirement planning and investment strategies that meet their individual goals, especially when they are just starting out on this venture. They simply have no idea where to begin, so don’t be one of them! Just by reading this article you will be more prepared than the rest.
How Much Money Will I Need to Retire?
The first step in a successful retirement plan is calculating how much money you’ll need when the time comes. Retirement is an expensive endeavor, and you should be prepared for that when doing your planning. Experts have estimated that you’ll need between 70% and 90% of your income before retirement in order to keep the same standard of living. Understand these needs early on in the planning process so that you won’t become frustrated later. Here’s how to do that:
Calculate your average cost of living today and multiply it by 0.7-0.9, depending on how conservative you want to be with your calculations (the higher the number in this range, the more conservative). That will tell you how much money you’ll need each year during retirement. Now, look at the tables above to find out how much you need to start saving today in order to hit your retirement goals.
Start Saving for Retirement Now!
Ask any financial adviser and they will tell you the most crucial part of building a solid nest egg for retirement is starting early! It doesn’t matter if you feel like you’re already late to the party or if you’re only 16 and making minimum wage washing dishes at a restaurant, make today the day you put thought into action. Something as little as a $50/month contribution can go a long way in the big picture.
Still not sold that you should start today? Do yourself a favor and check out this compounding interest calculator and play with monthly contributions to see how far just a few more dollars per month adds up to significant sums over 20, 30, or 40 years! Using an average annual interest rate of 7-8% is a good place to start when running various scenarios (the average returns of the S&P over the last 30 years).
Once you figure out the amount of money you need to invest on an annual (and then monthly) basis, the next step is making the decision on which investment strategy is best for you.
An Alternative ‘Time-Tested’ Investment Strategy
In a perfect world we would be able to put our money in a clearly defined place with little to no risk and a high rate of return. Unfortunately, investing for retirement is not that easy. You can invest in stocks (volatile), bonds (low interest rates), CD’s (low interest rates), and a number of other individual strategies that just aren’t ideal.
An all-to-unfamiliar investment vehicle that few utilize is something called participating whole life insurance. You might be surprised, and comforted, to hear that this alternative investment strategy is one used by some of the wealthiest individuals ever to walk the planet. Not only can this type of long-term investment provide generational wealth to be passed down, but it also provides you with a tax-free income stream!
Here’s a rough estimate of how much someone can invest with this strategy and the results they’d achieve:
*These are averages. Each person will have a different amount based on his/her overall health, family lineage, habits, etc. You will receive a personalized plan from the provider of your custom-built plan.
*Females: Your rate (investment) will typically be even lower than males!
**These investments are also going to leave hundreds of thousands, if not millions, of dollars to your family when you pass away! Retirement income AND generational wealth is the goal.
Most people look forward to their retirement, especially after they have been working for several years. They believe retirement will be a wonderful time when they can do things they could not during their working years. This can only be accomplished by taking action today with your retirement. Do yourself a major financial favor, and do some additional research on this alternative investment strategy!
Other Retirement Investment Strategies
If you choose not to partake in the participating whole life insurance investment strategy, that’s totally fine! Another step you can take is to make sure to diversify your investments over time in a retirement portfolio. This is a crucial technique, as it will reduce the amount of risk that you have when you are playing the market. If you are not having success, take some time off to study what you need to do to maximize your earnings.
Utilizing paid retirement services and managers in the beginning is well worth the investment. Find a financial manager today and begin developing a relationship. You will quickly find that the financial options for your retirement savings are nearly limitless. Working with a financial manager, who does this day in and day out, is the best way to narrow down the field and relieve the stress of starting on this endeavor. Do upfront research on management fees and find a conservative middle-of-the-road fee. This will ensure they aren’t a bottom of the barrel manager, yet won’t rob you blind through fees. The money spent early on in the retirement process will go a long way to achieving your dream retirement. Start with a quick math lesson on how compounding interest works and how even a little bit of money early on goes a very long way in the retirement process.