Retirement Security Is Not an Impossible Dream

There are many simple steps and strategies for investors to follow to help them achieve a financially secure retirement.
The road to a secure retirement can be riddled with speed bumps and potholes. Some plan participants may feel that they don't really have to worry about retirement because it's way off in the future. Others cut back or eliminate their contributions to the retirement plan because they have many other pressing financial obligations and are not confident, they can manage their retirement assets effectively.
However, the good news is that there are many simple steps and strategies that can shift your retirement planning into high gear and move you closer to a financially secure retirement. Here are some ideas for you to consider.
Prioritize Your Retirement Security
Planning for retirement may not be at the top of your priorities right now, but it's not wise to ignore the future either. It is important to plan for when your regular salary stops coming in. The reality is that your actions today can have a significant impact on your quality of life in the future.
By shifting your priorities, a little and setting aside some time and effort to plan for your retirement now, you can increase the likelihood that you'll have the financial resources available to enjoy a financially secure retirement.
Boost Your Contribution Level
It's not rocket science: the more you contribute to your retirement plan, the greater your potential retirement savings. If you add $200 a month to your contribution amount, you could potentially end up with an additional $92,408 for your retirement, assuming you earn a 6% average annual total return over 20 years. (This is a hypothetical example used for illustrative purposes only. It assumes amounts are invested monthly and monthly compounding. It does not represent the result of any particular investment. Your results may be different.)
Increasing the amount you contribute may be less difficult if you can take advantage of the Tax Credit. This tax credit is available to qualifying taxpayers who contribute to an eligible retirement savings plan or individual retirement account. It is claimed as a direct offset against a taxpayer's income tax.
Think Diversification
You can enhance your potential for a secure retirement by carefully distributing your retirement funds among the major asset classes and investing in well-managed, diversified funds. * While diversification does not ensure a profit or protect against loss in a declining market, it can help reduce the risk that a portfolio's overall value will be impacted if one asset class suffers a decline for an extended period. In addition, a diversified portfolio is less likely to experience the volatility common in portfolios invested solely in equities.
Look to Grow Your Annual Return
A 1% increase in a portfolio's average annual return compounded over time can significantly impact the portfolio's size. Compare your investments' total average annual return against the returns of other similar investments. If it appears that your investments are underperforming, you may want to consult with an experienced financial advisor to determine if you need to alter or temper your current investment strategy.
More importantly, your financial advisor can help you identify the steps you need to take to move you closer to a financially secure retirement.
*You should carefully consider a fund's investment objectives, charges, expenses, and risks before you invest. The fund's prospectus, which can be obtained from your financial representative and/or or through the management platform of your digital retirement plan, https://www.yourbenefitaccount.com/banco/, contains this and other information about the fund. Read the prospectus carefully before you invest or send money. Shares, when redeemed, may be worth more or less than their original cost.
The information and general descriptions found in this article are designed to help you understand some of the factors you should generally consider when evaluating the appropriateness of any strategy or investment within your retirement plan. Any description included is for informational and educational purposes and for your independent consideration only; it should not be regarded or viewed as advice or as a recommendation to take (or refrain from taking) any particular action. By providing this information, we assume that you can evaluate this information and the general descriptions found here to exercise your independent judgment. Banco Popular de Puerto Rico, its subsidiaries and/or affiliates are not engaged in rendering legal, accounting or tax advice services. If legal, accounting, or tax advice services are required, you should seek the services of a competent professional.
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