For most of us, our entire lives are spent building wealth to be able to retire one day without having to work any longer to receive a steady income. Not only setting money aside, but investing it in hopes of growing it beyond its original value, is at the foundation of the wealth accumulation process. As investing takes place from decade to decade of one’s life, the concept of age appropriate investing becomes relevant.
What exactly do we mean by age appropriate investing?
Smart investing is a balancing act between risk vs. safety. In other words, how much risk do you want to take when investing, and how much money do you want kept safe from risk?
Investors who are just starting out might be comfortable taking more risk than mature investors. That’s because, considering you are starting out investing at a young age, you have more time to make up for losses than you do when you are older. For example, if a 30-year-old experiences a 25 percent stock market loss, he or she has far more time to make up for that loss than a person on the verge of retirement. A 25 percent loss when you have 40 years until retirement is going to hurt far less than a 25 percent loss when you have four years until retirement.
What does age appropriate investing mean to you?
When choosing the best way to invest for your age, you need to assess your risk tolerance. Many of us may have brokers suggesting that we invest in high-yield stocks or mutual funds with retirement on the horizon, but if your personal tolerance for risk is low, you should make changes to your investing strategy despite what your broker says.
If you’re at the age where you would rather have all or at least a portion of your money protected from market losses, but you aren’t necessarily wanting to give up market gains, then an annuity can be an effective age appropriate investment. Annuities were created to be good, safe places for your money. There are some types that are very good, and there are others that you should steer clear of. However, the index annuity is one investment vehicle that allows you to capitalize on market gains while keeping your money 100 percent protected from market losses.
At Ty J. Young Inc., we are focused on helping our clients invest age appropriately by securing the best annuity products that are on the market today. To learn more about how we can help you establish your retirement income, call our team of skilled financial advisors at 877-912-1919.