As you plan for retirement, focus on what you can control.

7 Retirement Philosophies for Today's Investor

“It is not often that a man can make opportunities for himself. But he can put himself in such shape that when or if the opportunities come, he is ready.” ― Theodore Roosevelt

In the world of finance, we spend a lot of time talking about rates of return and trying to forecast the future. However, there are always unforeseen market events that impact our financial plans. When it comes to retirement, the most important thing you can do for yourself is focus on what you can control.

1) Start as Soon as You Can – Typically, the earlier you start the sooner you will theoretically reach your ultimate goal. Time can be a friend to an investor and an enemy to a procrastinator. The longer you wait the harder it becomes, mathematically, to retire on your existing lifestyle. 

2) Live Within Your Means – Investing is a trade-off between the spending you intend to do today versus the savings you’ll need in retirement. By keeping your lifestyle in check today, you could have excess income to save for tomorrow.

3) Invest for Life – You may want to let go of the idea of cashing in all your savings at a certain age. Investing is typically a lifelong process that you continue through your retirement. Instead of cashing out, look at changing your allocation to better match your investor risk profile.

4) Be Mindful of Your Asset Allocation – You can influence your overall rate of return by the way you allocate your investment dollars. Allocating your money is a delicate balance between the risks in your investment portfolio versus the return you need to achieve on those assets. Although you cannot guarantee you’ll earn a certain return on your investment, you can influence the overall level of returns by adjusting the levels of risk you expose yourself to in the markets.

5) Contribute Consistently – Unless you’re in a position to invest one large lump sum, you’ll probably want to regularly add to your investment accounts. Setting up regular payroll deductions to your 401(k) or IRA can help you ensure consistent contributions.

6) Pay Attention to All Related Costs – The investment process has two important types of costs: (1) the cost directly associated with purchasing an investment and (2) the cost of your time. The overall value of your portfolio and your general interest and knowledge level about investing will influence your investment choices. Investing in individual stocks and bonds can be costly for smaller accounts and require too much of your time to manage with larger accounts. If any of these areas represent an issue, you may also consider of ETFs, mutual funds or professionally managed accounts.

7) Stay Healthy – One of the largest expenses you’ll face in retirement will be your medical expenses. By eating right and exercising, you can have a positive impact on your medical needs and potentially reduce your retirement expenses.

Of course, this isn’t a comprehensive list of all philosophies that will help you reach your retirement goals. But they’re a good starting point. Talk to a Scottrade investment consultant today about your unique financial situation and the investing solutions that match your needs.

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