Investing For Retirement
Investing for retirement requires that you be a good saver. You must set aside a portion of your earnings periodically. These funds should be invested in sound vehicles that grow your investments and provide income for your retirement.
According to the IRS pamphlet, Choosing A Retirement Solution For Your Small Business,
“Experts estimate that Americans will need 70 to 90 percent of their preretirement income to maintain their current standard of living when they stop working.”
To meet this need, a wise person will create a retirement investing plan.
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Investing For Retirement - Ways To Invest Money
There are many ways to invest money for your retirement. No doubt if you are a baby boomer, you are familiar with a 401(K) plan. Hopefully your company offers one. If they do, take advantage of the plan especially if your company offers a contribution to your plan.
If your company does not offer a 401(K) or similar plan, you should start your own personal IRA or Roth IRA.
If you are self-employed and have one or more employees, you can take advantage of Payroll Deduction IRAs, Simplified Employee Pensions (SEPs), SIMPLE IRA, Safe Harbor 401(K), Automatic Enrollment 401(K), Traditional 401(K), profit sharing, or Defined Benefit plan.
These are just types of plans. Most plans allow you to invest in stocks, mutual funds, gold, silver and bonds. You can also invest in real estate, mortgages, and trust deeds in some self-directed retirement plans.
What you decide to place in your retirement account will depend upon your financial goals, your age, and the time you have left to save. When you reach age 70 1/2, you are required to withdraw the minimum amount set by law or pay a 50% penalty plus the taxes that were due.
Own Gold and Silver
Many financial newsletters I subscribe to recommend that you hold at least 10% of your savings in precious metals like gold and silver. Gold and silver are real money and they have been since the beginning of time.
With the government likely to default on its debt sometime in the future, you will appreciate holding some of your savings in gold and silver.
Investing for retirement includes protecting your investment portfolio from inflation, and currency devaluation. In my article Invest In Silver And Hedge Against Financial Calamities, I cover five ways to invest in silver.
In my article titled Precious Metals Investing, I cover owning physical gold in your retirement account.
Invest For Income
Investing for retirement also includes owning dividend paying stocks for income. The best stocks to own are those companies that are number one in their markets and grow their dividend year after year. This would include stocks such as Walmart, Johnson and Johnson, Microsoft, Abbott Labs, McDonald's, Coca-Cola, Intel, and many more.
When buying any stock, even the blue chips, you need to buy as low as you can. After stocks have risen for a long time in a bull market, it would be wise to wait until the stock declines significantly before investing your money.
Subscribe To Newsletters
All stocks will fall eventually. Nothing goes straight up. If you are not a financial analyst, then I would recommend buying a good stock advisory newsletter or two. My favorites are published by Stansberry & Associates Research (www.stansberryresearch.com).
Dr. Mark Skousen also offers several excellent newsletters for investors and traders. Forecast & Strategies and Skousen High-Income Alert are two of his newsletters/services.
A subscription to good newsletters will alert you to new investments. They will also help your timing into the market.
Investing In Bonds
When investing for retirement, you should also consider if bonds are right for you. When you buy a bond, you are loaning money to the company or government entity. You receive regular interest payments at a fixed rate. At the end of the term, you also get your principal back.
You can buy individual bonds, or buy bonds in a fund. In my article Retirement Investment Income, I cover bond investing in more detail.
Investing In Mortgage Notes And Trust Deeds
Many real estate investors are aware of the fact they can invest in owner carried-back mortgages and trust deeds. Often in a slow housing market, sellers sell their properties and carry back the mortgage or trust deed. They do this in order to sell their property to a buyer who may not want a conventional loan or cannot qualify for one.
Often times, the seller would prefer cash than holding the mortgage and receiving their principal and interest payments monthly over several years. Motivated mortgage holders are sometimes willing to sell their mortgage note, in part or whole, for a discount.
The investor who buys a discounted mortgage note will receive a higher yield on his investment than the stated amount on the mortgage note. Some investors seek a 15% to 25% R.O.I.
If you set up a special self-directed IRA, you can invest in these cash flow instruments. One such firm is The Entrust Group. (www.theentrustgroup.com/investment_options/notes)
When investing for retirement, as you can see, you have many options to grow your wealth and receive income from your investments. I would recommend researching the investment vehicles that interest you. If you need help, find a competent financial advisor or subscribe to a newsletter with proven track record.
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