Keep Retirement on Track with Sound Savings Strategies
They say only death and taxes are a certainty. There is something else that should be on that list: growing older. It’s another inescapable fact of life. Even if you are not following the traditional American Dream of working 40 years and saving for retirement, your savings strategies may be one of the most important predictors of your financial future.
There are several factors affecting Americans’ ability to save. Inflation is one. The easing of the restrictions of the pandemic is another. Your savings rate is what will assist you to weather a period of inflation. Inflation only affects your spending. If you are saving a big portion of your income, the bit inflation takes won’t hit too hard. But if your saving is a small percentage of your income, inflation can easily wipe that out.
About 45 percent of workers between the ages of 18 and 35 say they don't see a point in saving for their future until things return to normal. That may seem like the only alternative, but if you slow down or stop your savings and investments now, it will have a huge impact on your retirement fund. Perhaps you will have to work longer and put off your retirement for several years. Or lower your expectations for the lifestyle you had in mind for your retirement.
The other side of this equation is how you spend your money. The more you spend, the less you can save. And, since you can’t slow down the aging process, year by year your retirement date creeps closer. Budgeting and rethinking your spending is a better option than cutting back on your savings plan.
“Sound savings and investment strategies for retirement are a long-term activity,” advises David Beckerman, Senior Vice President, Investments, for David Lerner Associates. “It’s a marathon, not a sprint. Instead of changing with current financial situations, talk to an advisor about the sensible middle ground of investing.”
Investment is the other side of the retirement equation. Just saving is not enough. You must be smart about what you do with that money and put it where it will grow over time, so it can provide you with the retirement fund you will need. Even in a volatile financial market, inflation, or an impending recession, investing regularly for retirement is still the best move. Remember, the shares you buy when the market is down are likely to increase in value when the market recovers.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC