There are studies and reports that the average person begins saving for retirement at the age of 32! In addition over 25% of consumers have not started saving for retirement at all which is a huge concern to them and to people who provide social services and to governments who are interested in their citizens enjoying their retirement years. If you think the government will look after you, think again, it is unlikely that there will be sufficient income for you to maintain the quality of life that you desire.
There are lots of misconceptions and myths about retirement and saving for retirement. However more and more people seem to be getting the message that they need to begin saving for their retirement and follow a regular savings program to ensure that they have the quality of life they are looking for when they retire.
Retirement Investing Myths and Reality
Market volatility will keep a lot of people on the sidelines. They want to buy low. But are afraid that the instant they get in the market it is going to drop. This does happen from time to time. However if savers adopt a long term strategy, and use dollar cost averaging, their investments will grow over time. These investments will provide them with the money they will need in retirement.
Some people feel they need a large amount to invest for retirement and specifically for mutual funds and stocks. The reality is that with a regular savings plan, your money slowly builds and compounds over time. Many investors are pleasantly surprised at how much their investments have grown over time with a regular savings plan.
I can catch up on my savings when I am older. This myth is followed by many people. The reality is that they have missed out on all of these years of compounding interest. This is income which by the time you retire is providing more funds than what you can save. Start early prior to age 25 and watch your money grow.
Investing is complicated. Stick with straight forward savings plans. Use a financial adviser to guide you through a balanced well managed savings plan. Maintain a balanced portfolio. Make sure it is diversified to protect your investments over the long term.
Rich people are the only ones that benefit from tax deferred accounts. Rich or middle class or below middle class, everyone receives a tax refund when they invest in a registered retirement fund. They also benefit from the tax protection from all income within the savings plan when it is a registered retirement plan. Regular savings and compounding can build a really nice retirement plan, especially if you begin early.