Footstep 24

Planning for retirement is essential

After the collapse of the financial markets in the fall, most people now realize that they need to save for their retirement, but may be thinking that there is a real danger they will lose their fund – after all, in the US alone, millions of people saw the values of their retirement incomes cut by one-third in a month or so. Most experts give this advice: ‘Provide your own pension fund.’

A lot of people also know that the US and UK governments have spent – and are spending – so much money to keep the banks going, in controversial ways that they will have no money left to increase the state pensions. In fact, some advisers recommend that you invest for your retirement on the expectation that there will be no state pension. Yet that is something we all grew up with.

So what is the answer? Now, you need to save a lot for retirement – more than you thought. Secondly, you need to find an investment advisor that specialises in retirement planning and for working with with over 50s, because these are people who want a conservative style of investment – and that is what you want with a retirement fund.

You want to avoid any retirement planners who make big claims, and go for those who think in terms of making gradual and steady form of investing for retirement. This generally means investing some funds in government bonds, some in corporate bonds and some in the blue chip equities. However, these days, corporate bonds can be risky, so it is best to avoid them.

You also need to remember that when you retire what you want is a retirement income rather than a lump sum, but you can easily convert your fund into an annuity when you want to.

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This entry was posted on Sunday, August 30th, 2009 at 9:01 am and is filed under Step. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.