| Mutual Funds are a very common investment | | | | point that allows you to financially survive the rest |
| vehicle. They are easy to buy, relatively simple to | | | | of your life? |
| understand, and commonly offered as the | | | | According to the US Census Bureau, in 1960, the |
| primary investment vehicles in most 401(k) plans. | | | | average life expectancy was 69.7 years. In 1980, |
| The problem is that the only time most people | | | | it increased to 73.7. In 2006 average life |
| take a look at the results of a mutual fund is | | | | expectancy increased to 77.7. How long do you |
| when they buy it. Most "investment professionals" | | | | plan to live? If you retire at 65 with $500,000, |
| will encourage investors to pick a fund and then | | | | could you make it to 80? After 40+ years in the |
| keep adding funds into it periodically, and bank on | | | | workforce and preparing financially for retirement, |
| the fact that the market (and thus the fund) will | | | | would you be able to live on roughly $30k a year |
| grow over time. | | | | (not to mention, what will $30k really be worth |
| Well, statistically speaking, they are right. If you | | | | then)? What if you live to 90 - what do you do |
| look at the market throughout its history, it | | | | then? |
| grows over any 10 or 20 year stretch. And if you | | | | Working with a financial advisor (which is better |
| are 30, 40 or 50 years old, and have several | | | | than investing blindly) will more likely ensure their |
| decades to retirement, you should be okay, right? | | | | retirement than it will yours. You need to educate |
| Well, tell that to the baby boomers who had the | | | | yourself financially, so that you can make better |
| same thoughts 20 years ago, watched their | | | | decisions now - decisions that can ensure you a |
| portfolios grow slowly but surely through the 80s, | | | | comfortable retirement, no matter how long you |
| 90s and the 00s, until 2008 wiped out 40 - 60% | | | | live. You need to be able to take control of your |
| of their retirement funds. Many of them followed | | | | own finances. Buy and hold (aka "Buy and Hope") |
| this "plan" for the majority of their working life, | | | | is dead. A little education can go a long way |
| and are now trying to figure out how they are | | | | towards maximizing your retirement dollars. |
| going to be able to fund their retirements. | | | | If you are like most people, and you picked a few |
| What will you do if the market is not where you | | | | funds for your 401(k) or IRA based on the |
| want or hope it will be when you retire? Can you | | | | returns they were getting the couple of years |
| afford to make the assumption that when you | | | | prior, ask yourself, "How long has it been since I |
| are ready to leave the daily grind behind and | | | | reviewed my portfolio?" Years? Decades? What |
| enjoy your "golden years," the market will be at a | | | | are they doing now? |