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Stop Being Concerned About Your Retirement and Start Doing Something About it!

Stop Being Concerned About Your Retirement and Start Doing Something About it!

By Kevin Coppola
Source Article: http://www.pewsocialtrends.org/2012/10/22/more-americans-worry-about-financing-retirement/

If you are in your 20’s or 30’s and not concerned about much of anything (yet) this message is definitely for YOU…

Yet another study released this week—this one by the Pew Research Center—confirms what those of you who have actually thought about it probably already know, or at least already feel: Americans today are more worried about their retirement finances than they were at the end of the Great Recession in 2009. About four-in-ten adults (38%) say they are not very confident that they will have enough assets for their retirement, up from 25% in 2009.

But unlike 3 years ago when the “Gloomy Boomers” held the definitive lead in “worrying,” younger and middle-aged adults have finally caught up. I too was young and invincible once—like many of you are now—fearing nothing and somehow knowing that my retirement years would take care of themselves (or at least my parents would). Today, however, according to the study, retirement worries peak among adults in their late 30s—the sons and daughters of Gloomy Boomers. Not surprisingly, according to Federal Reserve Board data, this is exactly the age group that has suffered the steepest losses in household wealth in recent years.

But worry will get you nowhere.  It’s time to act.

If you are amongst those young (and growing restless) I’m here to congratulate you! The difference between being “all in” on this race to retirement while you are young versus waiting 10 (or 20) more years to start adds at least one extra zero to your projected bottom line. And the first step to getting there is kicking the passive pundits out of the driver’s seat of your retirement planning car and taking the wheel yourself.  And we can help you navigate.

The Compass Institute long ago paved the way for people to take an active role in managing their retirement portfolios. And the way you don’t do this by listening to people who tell you to “set it, and forget it,” tossing the better part of your portfolio into a statically-managed Target Date Fund (TDF) or one of the more elegantly veiled (and more expensive) professionally “managed” account. Because, unless you KNOW otherwise and have SEEN results to the contrary, all these vehicles use some variation on Modern Portfolio (aka, don’t-put-all-your-eggs-in-one-basket) Theory that advocates always holding some assets that are going to lose money in the interest of cushioning the pain of a changing tide.

Well, that pain, or losses in your retirement account, only lasts for as long as you let it.  This is not rocket science! The Institute created a strategy that sends you analysis of the mutual funds available in your 401(k0 plan, every 5 weeks, no matter what, and shows what small changes you can make to put more of your money in funds that are going UP and less in those going DOWN. And, no, you (we) will not always be right about the changes. But being right more often than not is a simple formula for capitalizing on upward trends and getting out of the way of financial ruin during downward ones.  This attention to your account, and the adjustments you make over the various market cycles that you will see in your lifetime, safely ensures a better investment return, which is what all of us need to achieve true retirement security.

 



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