As retirement grows closer and Baby Boomers begin making long-term financial plans, investment opportunities become prominent in financial discussions. With people living longer in retirement, it’s important to make investment decisions that will benefit their nest egg rather than taking from it. In order to make responsible investment decisions, there are some important do’s and don’ts to keep in mind.
Retirement saving should be the number one priority for future financial stability. When considering investment opportunities, it’s important to remember to ask for advice and to keep a diversified portfolio. In order to avoid fraud, investment opportunities brought to your attention through an unsolicited phone call or email should be ignored. In addition to that, you should never feel pressured to invest without solid financial planning first.
Investment do’s will help to keep your finances safe and your financial health stable. Not all investment opportunities are created equal, so it’s important to do your homework and take safety precautions.
Do Prioritize Retirement Savings
Baby Boomers know the importance of saving for retirement because, by this point, many Boomers are either there or almost there. However, it’s still important to prioritize your retirement savings when you’re considering the investment opportunities that make sense for you. Investment opportunities can help to grow your savings, as long as you’re doing it responsibly. Never invest the money if you don’t have the means to do so. Your retirement savings should be your top priority. If you don’t know where to start, ask for advice before diving into investment opportunities that you’re not sure about.
Do Ask for Advice
Having a financial advisor available to ask questions to can be incredibly valuable when you’re going through the do’s and don’ts of investing. Because each person’s financial situation is different, it can be difficult to give blanket advice about the investments that are right for you. There are so many ways to go about investing, whether that be bonds or annuities. Options like FX trading allow you to invest with your IRA or 401(k), but they may be confusing or difficult to understand, which is why it’s important to ask for advice. It’s better to understand your options and keep your money safe.
Do Diversify Your Portfolio
This term is thrown around a lot when it comes to investment opportunities, but it’s important because it helps to keep your investments safe. A diverse investment portfolio will ensure that you don’t put all of your assets in one investment, just in case that investment loses money or doesn’t perform as well as you’d hoped. One popular way to do this is by diversifying your asset allocation into different elements — like stocks, cash, bonds, real estate, etc. Investing has a lot to do with balancing risk and reward, and diversifying your investment portfolio is one way to do that.
The don’ts are just as important as the do’s — maybe even more so. Investing your money can be a great way to increase your assets in retirement, but doing it incorrectly can destroy all of your hard work and leave you in a difficult spot.
Don’t Trust Email or Phone Investment Opportunities
Unfortunately, the aging population is a popular group of people to prey on for scammers. As a result, there are plenty of scams out there that are specifically designed to trick Baby Boomers and others who aren’t as familiar with the technology. This is why it’s important to understand not to trust any investment opportunities that arise as a result of an unsolicited email or phone call. Protect yourself from these scams by letting unknown numbers go to voicemail, never opening an email you don’t trust, and getting advice from a financial advisor before investing in any large investment opportunity.
Don’t Feel Pressured to Invest
Don’t ever feel pressured to invest any of your savings or retirement money. Don’t ever feel pressured to spend money on something you’re unsure about. If you feel more comfortable paying down debt, feel free to do that as a portion of your retirement money management instead of partaking in an investment opportunity you aren’t comfortable with. It’s common for children, grandchildren, other family members, or friends to suggest investment opportunities with your assets, but not all investments are great for everyone. Hiring a financial advisor is a great way to go to ensure an objective viewpoint to help you feel comfortable with an opportunity.
Don’t Ignore Financial Planning
Planning for retirement and making financial plans can be confusing because it’s difficult to determine how long you’ll be in retirement, and what your life will look like. However, it’s still important to pay attention to financial planning and make a plan for your spending. Take into account the amount you’ll get for social security, the costs of long-term care should you need it, and your health insurance coverage. Investing can be expensive, so don’t ignore your long-term financial planning just because there are so many unknown variables.
Retirement is both an exciting and stressful time for many Baby Boomers. Though the prospect of being out of the workforce and spending more time relaxing can be alluring and exciting, the financial aspect can seem daunting and scary. Investing opportunities can be a lucrative way to increase your nest egg for retirement, but it’s important to invest in those opportunities responsibly.
The do’s and don’ts for each person and financial situation are different, but they are designed to keep your financial health in a good place for retirement.