Retirement Planning QuickStart Guide

The Simplified Beginner's Guide to Building Wealth, Creating Long-Term Financial Security, and Preparing for Life After Work

Ted D. Snow, CFP®, MBA

• Publisher: ClydeBank Media LLC
• Year: 2021
• ISBN:
  9781636100067
• Topic: Personal Development
• Subtopic: Personal Finance

THE ULTIMATE BEGINNER'S GUIDE TO TAKING CONTROL OF YOUR FINANCES AND PREPARING FOR RETIREMENT

INCLUDES LIFETIME ACCESS TO ONLINE INVESTMENT COURSE RESOURCES AND OTHER ESSENTIAL RETIREMENT PLANNING DIGITAL ASSETS
Planning for retirement is the biggest financial commitment of your life. Are you prepared? The future is often filled with fear and uncertainty. Fortunately, your retirement doesn't have to be. Managing your finances, preparing to transition out of the workforce, and ensuring that your money is working as hard as possible to make your golden years sparkle can be overwhelming. Best-selling author and finance industry veteran Ted D. Snow, CFP®, MBA, knows how to prepare for retirement no matter what stage of planning his clients are in. Retirement Planning QuickStart Guide cuts through the chatter to help orient you on your journey to retirement with financially sound money management strategies, practical tips, and a thorough look at with it takes to prepare for a retirement worth looking forward to Using the guidance and insight provided in this book, anyone, at any stage of their career, can find the answers they're looking for to prepare for a comfortable, satisfying, and financially secure retirement. Whether retirement is right around the corner or still decades over the horizon, you deserve a retirement that's a fitting reward to a lifetime of hard work. This book is your essential companion.

Retirement Planning QuickStart Guide Is Perfect For:

• People in their 20's, 30's, or 40's who know they have to start preparing for retirement but aren't exactly sure how yet.
• People in their 50's, 60's, and beyond – yes even people who are past the retirement age will find value in this book!
• Anyone who is concerned that they aren't adequately prepared for the largest financial commitment of their lives!

Retirement Planning QuickStart Guide Covers:

• Everything you need to know to get a head start on retirement planning from financial planning to the fundamentals of saving for retirement
• Retirement planning investment strategies, tactics, and techniques that set this book apart from other retirement planning books
• Preparing for retirement at any age (no matter how close or far away retirement truly is)
• Exactly how to retire from work and into life

Retirement Planning QuickStart Guide Will Teach You:

• Where and When to Start – How to Understand Your Unique Retirement Needs and Start Preparing Now
• 401(k)s, Traditional IRAs, Roth IRAs, Health Savings Accounts, Mutual Funds, and Other Financial Instruments – Which Ones Are Right for You and How to Use Them to Best Effect
• Accelerating Your Retirement Timeline – What to Do If You Don't Think You Have Enough Time (or Want to Retire Early!)
• More Than Money – Going Beyond Financial Security for a Happy, Healthy, and Rewarding Life After Retirement
• Fending Off Fraud, Estate Planning, Minimizing Your Tax Burden, Health Planning, Finding a Purpose After Work, and More!

*LIFETIME ACCESS TO FREE SUBJECT MATTER DIGITAL ASSETS*

• Access to comprehensive online investing courses to ensure your financial preparedness for retirement
• A dynamic asset allocation tool to help you put your money to work for you
• Life planning guide, a budgeting calculator, anti-fraud resources and more!

*GIVING BACK*

ClydeBank Media proudly supports One Tree Planted as a reforestation partner.

PART I

DESIGNING YOUR RETIREMENT

| 1 |

Key Retirement Accounts

It’s Never Too Early to Start

Chapter Overview

• The Advantage of Time
• Key Accounts
• Financial Advisors

Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.

– Albert Einstein

If you are reading this book in your twenties or thirties, I really like your chances for a successful retirement. Using time to your financial advantage is a key element of investing, and if you have already started thinking about how to accomplish your financial goals while putting money away for retirement, then you are definitely on the right track.

The reason is that the earlier you start investing, the more time your money has to grow and the more you benefit from compound interest, which is interest paid on your initial deposit plus the interest you earn on that deposit. Compound interest might not seem like a big deal when you are just starting to save and invest your money, but it becomes important over time.

Let’s say you invest just $250 in an account that earns 6 percent annual interest, and then you invest $50 a month for five years. Over five years, your total contribution to the account will be $3,250. At the end of five years, however, thanks to the beauty of compound interest, you will have $3,826. I know that does not seem terribly impressive, but you earned $576 in five years just by having your money invested.

But what if you invested $2,500 at 6 percent annual interest and added $100 a month for five years? At the end of the five-year period you would have invested $8,500, but your investment would be worth $10,349—$1,849 more than you had put into the account. And if you leave the money where it is and keep adding $100 a month, in five more years (assuming you continue to earn 6 percent interest compounded annually), your account will be worth $20,936. You get the idea, right?

My company website has a compound interest calculator that is easy and fun to use and provides a clear illustration of the power of compound interest. You can find it, along with many other practical calculators, at snowfinancialgroup.com/resource-center/calculators.

There are a lot of formulas that tell you how much you should invest each year and how much you should have saved by various points in your life in order to ensure you will meet your retirement goals. The fact is that many people have no idea how much money they will need to retire.

Bankrate, a personal finance company, conducted a survey in 2018 asking participants how much money they personally would need to save to fund their retirements. A startling 61 percent of all the age groups surveyed said they did not know. But here’s the thing: when it comes to your financial future, knowledge is power. When that knowledge is coupled with discipline and a sound investing strategy, the future gets even brighter.

Investors make many mistakes, some resulting from carelessness, others from bad advice, and others from a lack of understanding. The three biggest mistakes I have watched investors make over the course of my career are these:

1. Starting to invest too late, thereby losing out on the advantages of compounding.
2. Not investing enough. Contribution to investments every month should be a fixed expense in your budget.
3. Becoming conservative with their investment selections too soon. Sure, it is good to tilt your portfolio to less risky investments as you get close to retirement, to protect your assets in the event of a downturn. Being too risk-averse, however, can limit your earnings potential to the point where it will be difficult to keep up with inflation and meet your financial goals (you will read more about inflation in chapter 2).

If you are in your forties or fifties, or even your sixties, and are just starting to plan for retirement, your work will be a little harder. But coming late to the game is way better than not coming at all. So, regardless of what age you start planning for retirement, you need to know about some key accounts that can help you work toward meeting your goals.

Key Retirement Accounts to Start Building Now

When you are in your twenties, thirties, or forties, saving for retirement can seem like a daunting task. Forbes reported recently that 44.7 million people in 2020 were carrying $1.56 trillion in student debt, with an average of $32,731 per person.

Even if you have college debt under control, you might be looking to buy a home or a condo, or finally trade in the old Honda you’ve been driving since high school. If you get married and have a couple of kids, that presents another set of challenges, along with all the joys, as you are probably thinking about getting a col...