Tuesday, July 13, 2010

Manage Your Own Money For Retirement

Most companies will match a percentage of their employee’s contribution to their retirement accounts. This is a nice benefit as it encourages the employee to save money because they are being given an additional sum on top of their base salary.

This additional sum in your retirement account can be quite substantial as it cannot be withdrawn until you hit retirement.

Brokerage firms will also allow you to set up a direct retirement fund, called a Roth IRA. If you have the time and enjoy doing financial research, giving yourself control over your retirement savings might be a good idea.

You don't have to pay sales commissions and management fees to incompetent money managers who make money regardless of your portfolio performance. You also have destiny in your own hands by investing in your desired asset classes and executing the buy and sell orders.

However, managing your own retirement account is not without risks. The market is very volatile and you are not guaranteed to make profits from stocks. This approach is recommended if you buy risk free assets like Certificates of Deposit or Money Market short term paper. In such cases, engaging a financial planner is a waste of money.

It is only when you don't have the time or expertise in exotic investments, that you seek professional money managers. They can help you to diversify your portfolio into stocks, bonds or complex assets like options, forex, commodities.

You have speak to a real person about your financial goals, and work on a strategy that fits your needs. But remember that money managers do not always make money, so entrusting your money to them might not give you the best return.

To ensure a secure retirement, it is important to find a money management professional who has been in business for years. Check their track record and expertise in negotiating the volatility of the market.

Also check out red flags like your money being tied up for a significant period of time. Make sure that you can always gain access to your funds at any time as most fraudulent companies require you to lock up your money for years.


Stela James said...

Thats too important to save a money...
part time jobs