Saving for retirement is a major priority for most individuals. Past generations relied heavily on the Social Security Administration benefits as their primary source of income upon retirement. Today, retirees are living longer and enjoying a more adventurous retirement. Those dreams, travel plans, and exotic hobbies require more money than Social Security alone can provide. While it is important to save regularly for retirement, it is also important to protect your retirement account from losses.
Retirement Contribution Sources
There are several sources you can use to add funds to your retirement plan. Recognizing that Social Security alone may not be enough to meet your needs, it is important to look for employer contributions. In addition to a retirement plan sponsored through the workplace, an Individual Retirement Account, or IRA, will help you reach your retirement goals. Having multiple streams of income in retirement could ensure that your money lasts longer and continues earning profits or interest throughout your retirement years. The accounts alone are not enough to prepare for future withdrawals. How the money is currently being invested is a vital component of how much will be available for future use.
Retirement Investment Strategies
As you draw near to retirement age, it is important to review and monitor your investment portfolio. An aggressive portfolio that includes several high-risk investment options may be appropriate for someone just starting out in their career but is not usually suitable for an individual with less than ten years to their first withdrawal. If you have found yourself in a position where you have lost your IRA, do not panic. You can recover from this financial setback if you do not immediately sell your positions. Redirect future contributions into more stable funds, such as blue-chip stocks and highly rated bond funds. Keep a close eye on the existing funds that have decreased in value. Depending on your risk tolerance, you can decide when to sell them off and move the money into different options. Ideally, you want to make a move when your shares are at or above your cost basis. It may take some time to bounce back, but as long as a company is still in business, its stock price will continue to move each day.