Mutual Fund Education Alliance - Investment Goals - Retirement
Sample Investment Approaches
By starting
early, you can save toward retirement with only a small
percentage
of your annual income. This is important when there are
children
to support and college educations to fund.
With time
on your side, you can build a healthy retirement portfolio and
benefit from compounding interest, dividend reinvestment and capital
growth. You also can afford to be quite aggressive, since a shorter-term
downturn will have less impact when you invest for a period
of up
to 20 years. You may have a combination of funds that seek
rapid growth
and some combination of growth and income.
Begin an
automatic investment plan.
Invest in
your company-sponsored retirement plan and contribute annually
to an IRA.
As retirement
approaches, you may want to maintain an aggressive
element to your
portfolio (there's still time for some substantial capital
appreciation) while gradually repositioning some of your money in less
risky
income and capital preservation-oriented funds.
Maximize
contributions to your company retirement plan and IRA.
Continue
an automatic investment plan.
Once
you are near or in retirement, you want to protect what you've
accumulated with more moderate and conservative
investments. You also
want to position your money so that it can begin to
provide income on a
regular basis. However, you'll need to maintain some
investments for
long-term growth, just in case retirement turns out to
be more expensive
than you anticipated or inflation heats up.
Continue
contributions to your retirement plan until age 70½.
Ask
your tax adviser how much to begin withdrawing from your savings
and retirement plans.
By starting
early, you can save toward retirement with only a small 
