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Why One of the Biggest Perks of Retirement Planning Has Nothing to Do With Retirement

Smart retirement planning boils down to a few simple truths.

  • Time is on your side.  The earlier you start saving money, the more time you give compounding to work for you. 
  • Take risks when you're young.  Although stocks are three times more volatile than government bonds, it earns nearly twice the average annual return.
  • Don't pay high fees for fancy accounts. Every dollar paid to a fund manager is a dollar that can't compound. Index funds charge a fraction of an equity mutual fund because they don't hire high-priced investment managers to pick stocks.
  • It's not about retirement. Saving for retirement might be the goal, but following these steps could provide general financial security.

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Why One of the Biggest Perks of Retirement Planning Has Nothing to Do With Retirement

Why One of the Biggest Perks of Retirement Planning Has Nothing to Do With Retirement

https://www.inc.com/magazine/201703/kathy-kristof/retirement-building-blocks.html

inc.com

1

Key Idea

Smart retirement planning boils down to a few simple truths.

  • Time is on your side.  The earlier you start saving money, the more time you give compounding to work for you. 
  • Take risks when you're young.  Although stocks are three times more volatile than government bonds, it earns nearly twice the average annual return.
  • Don't pay high fees for fancy accounts. Every dollar paid to a fund manager is a dollar that can't compound. Index funds charge a fraction of an equity mutual fund because they don't hire high-priced investment managers to pick stocks.
  • It's not about retirement. Saving for retirement might be the goal, but following these steps could provide general financial security.

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