Tips to be an efficient under 30 investor

Common Retirement Planning Mistakes and How to Avoid Them

  1. Not having a plan. You might think you are too young to start a retirement plan or even think about it, but the day will come and if you are not ready it will be a big blow to take. Starting early, staying on task and, systematic investing is key.
  2. Are your assets allocated to fit you and your goals? You might be too aggressive or conservative and not even know it. It’s key to look at what and how much is in a fund and to keep rebalancing your overall investments to keep it diversified. You don’t want all your eggs in one basket.
  3. Not taking advantage of employers 401ks or other retirement plans. Some companies do a match up to a certain % of your paycheck and if you do the % they match your money has doubled already. We will happily look over your plan and provide eduction.
  4. Not having a Roth IRA. It can be one of the biggest parts of your plan. Qualified distributions are tax free, when you put money into a Roth it is after it has been taxed.
  5. Too many accounts in different places. It sounds odd but it’s true. Keeping your assets in to many places can lead to unnecessary complexity.
  6. Having too much money in your bank savings account might be hurting you- inflation and slow growth may be hurting your overall value. To learn what other options are out there give us a call today.
  7. Changing jobs.  If you had a 401k or other retirement plan at work, you have some options with what you can do with the money. A plan participant leaving an employer typically has four options (and may engage in a combination of these options), each choice offering advantages and disadvantages.  Let's discuss your options.
    1.  Leave the money in his/her former employer’s plan, if permitted;
    2. Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted;
    3. Roll over to an IRA; or
    4.  Cash out the account value.           
  8. Trying to be your own financial advisor. There are online sites where you can take care of your own plan and investments, but do you know the parts to a well-diversified plan? I can take care of my flu or cold but when it gets bigger than that, I should be at the doctor’s office. Let us be your financial doctor and help you have a healthy plan to help you get down the road.     
  9. Tax Refund- saving your tax refund every year when possible is a great way to add a boost in your account.
  10. The rule of 72 - is an easy way to estimate how long it will take to double your money.

Take 72 divided by the Interest rate that you expect = Number of years it will take to double your investment.

72 divided by a hypothetical 6% = 12 years to double.

Or 72 divided by 12 years =6% needed to double.

The rule of 72 is a mathematical concept and does not guarantee investment results nor functions as a predictor of how an investment will perform.  It is an approximation of the impact of a targeted rate of return.  Investments are subject to fluctuating returns and there is no assurance that any investment will double in value.

Diversification helps you spread risk throughout your portfolio, so investments that do poorly may be balanced by others that do relatively better. Neither diversification nor rebalancing can ensure a profit or protect against a loss. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

Asset allocation does not ensure a profit or protect against a loss.

To qualify for the tax free penalty free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 591/2 or due to death, disability, or a first time home purchase

The information contained in this presentation is general in nature and should not be construed as comprehensive financial advice. As with any financial matter, please consult with your qualified financial professional before taking any action.