Quality of life during retirement is really the issue that everyone is looking for. We all have different visions of what that might be. Individual Retirement Accounts topped up each year can help to achieve these objectives. These visions are based on our upbringing. Also where we live and many other things that have happened to us as we shaped our lives. Some people will have corporate or company pensions to rely on. It is usually never enough. That is why we happen to think that individual retirement accounts are just as important for someone with a pension as it is for someone who does not have a corporate pension.   For self-employed people an individual retirement account is even more important.

Individual Retirement Accounts – Areas to Focus On

Manage Risk

It is all about managing risk over the long term. Investing in quality stocks and mutual funds as well as bonds, while maintaining diversity can be a recipe for success. Growth and income stocks and mutual funds over the long term will help to ensure that your retirement plan is sizable and meets your objectives for retirement.

Self Employed

If you are self-employed it is possible that you will be able to sell your business when you retire. However, sometimes plans do not always turn out the way you think. Your company may not be worth as much as you hoped it would. Or it might even go bankrupt leaving you high and dry when it comes to retirement. Build an individual retirement plan account to give yourself that extra bit of insurance. If your business does well, you will even be better off!

At the very least it will help you top up pension from your company or from your business when you sell it. Having s secondary plan for retirement is just good business sense.

Need to Manage

Just like a business, the retirement account must be managed. You may decide to use a financial adviser, however, we urge readers to be very involved and to make informed decisions every time your adviser recommends something. Review your portfolio once per month or at a minimum once per quarter. Set up review sessions with your adviser at least twice a year to make course corrections in terms of your investment balance and diversity.

Diversity

We have all heard of people who had all of their retirement with one company, only to find that the company goes bankrupt and they lose everything. Regardless of how loyal or strongly you feel about a particular investment, always diversify your investments so that your risk level does not place you in a position to lose your total investment. In addition, use several investment advisers and test investment scenarios against both of them before making a decision.

Focus on Growth, Income and Balance Investments

High growth stocks can go up fast and they can descend fast. Growth & income stocks will generate income for your retirement plan as well as there is potential for growth in the value of the stock. These are usually the best stocks to follow over a long period of time. Maintaining a balance of investments across various industries will also provide diversification and protection from downturns in one economic segment or another.