An Investment Secret That Can Transform Your Retirement Savings

oak harvest financial group Oak Harvest Financial Group

As you think about retirement, are you dreaming about traversing the world with once in a lifetime trips to mark off your bucket list? Or maybe traveling in your RV throughout the USA taking in the beauty of this great country? No matter what your plans are for the retirement years, ensuring you have a rock solid plan for funding those dreams is more important than ever.

So let us ask you this simple question, how’s your retirement planning going right now? If you’re like many other Americans, the answer might not be so favorable. According to the Board of Governors of the Federal Reserve 2019 Retirement Report, the average American has only $65,000 saved towards retirement. Even more concerning, the average American under 35 years of age has only $13,000 saved towards retirement. This essentially means that there are many individuals who will have to continue working well past retirement age just to pay their bills. And that can be a very scary scenario!

So how do you create a plan to ensure you can retire well? What is one of the best investment secrets that will transform your retirement savings?

TIME. As simple as that sounds, when you have time on your side, it makes a world of difference in your retirement savings. 

In your personal life, time is the one thing you cannot ever get back as the days, weeks, months and years pass by. If you have children, you know this to be true by spending half of your retirement savings just to keep shoes on their feet. They grow up fast!

When it comes to your retirement savings, time can be on your side if you start intentionally planning early and often. You will put yourself in an ideal situation to retire well if you start in your early years contributing towards a retirement plan. Having dreams of what retirement might look like for you is great, but the reality is that the planning for those years starts today. Not tomorrow, not next year, not when you have thousands of dollars to put into a retirement account each month. The work begins right now.

 

How Does Time Really Affect My Retirement Savings?

One of the most significant advantages of leveraging time to increase your retirement savings is a term called compound interest. Compound interest is when the interest you earned on the principal balance is invested back into the investment and then you start earning interest on the accrued returns. Simply put, you earn interest on both the money you’ve invested and the interest you’ve earned. 

So how does time and compound interest really affect your retirement savings? Let’s take a look at an example that will be eye opening for you.

Investor 1 starts contributing to her retirement at age 25, sets aside $5,000 per year for 10 years, and then stops contributing at age 34. Investor 2 starts contributing to his retirement at age 35, sets aside $5,000 per year for 30 years until the age of 65.

Any guesses which investor ends up with more retirement savings at age 65? Logic might trick you into thinking that Investor 2 contributed for 30 years, so he would have to have more. But that would be very wrong. Investor 1 would end up with over $175,000 more in retirement! That is the power of compound interest at work. By investing early, compound interest takes over and helps grow that investment exponentially over time. Quite astonishing how much of a difference 10 years makes by starting to invest early.

 

If I’m Late Starting A Retirement Plan, Have I Lost Too Much Time To Still Win?

Although it’s best if you can start contributing towards retirement at an earlier age to take advantage of how compound interest works in your favor, the fact still remains that starting now is your best option. If you happen to be approaching retirement age, you will need to be careful what investment vehicles you choose for your retirement that could impact what age you retire at or even required minimum distributions (RMDs) for investments like individual retirement accounts (IRAs)

Regardless, the key is to work with a company of experts that can help shape and guide your retirement plan to help meet your goals. Tools like a retirement savings calculator can give you some insight of how much you need to save each month and what interest you would earn over the years of investing.

 

Why Is Time The Best Option To Build a Successful Retirement Plan?

Having a strong retirement plan to take advantage of compound interest over time is key to achieving your dreams during the later years of your life. But it also is because there are some real realities that could get more complicated if you have not planned ahead.

Working forever is not a realistic plan. It may sound easy to say in your younger years that you could work until 70 or 75 years old, but the reality is you do not know what the future holds. You could be forced to retire early due to a medical challenge. You could be forced to retire early if the company you work for downsizes or merges with another company eliminating your position. So, working forever is not the best approach towards retirement – having a well-funded retirement savings account is your best option!

The future may have some unforeseen financial needs.

There is no crystal ball telling you what the future holds – especially during retirement years. You could have a life saving surgery that might cost thousands of dollars. You might need to replace a roof on your home that comes directly out of your retirement savings. Or maybe you have some expensive vehicle repairs that add up quickly. The goal is not to live in fear of what worst case scenarios might come in the future. The goal is to have a retirement plan that allows you the income needed to sustain the lifestyle and cover the practicalities of life.

Social security income is not a long-term game plan.

I’m sure the secret is out by now, but social security has significant challenges ahead to ensure it stays well funded for many years to come. Social security should be factored in as part of your retirement income, but should only be a piece of the puzzle when it comes to your full game plan. It is still important to contribute to investment vehicles like 401k, IRAs and other investments to take full ownership of your retirement.

Your retirement can help support your family, not create dependencies.

For most individuals, retirement is looked at as a time to spend more time with family and have some fun along the way. But that is only possible if a plan is in place to save and invest during the working years. For many, retirement can be a thriving time where you can support your family and show generosity to others. That could be helping with a down payment for a house for one of your children that are just getting their life started as a young married couple. Or maybe taking your kids and grandkids on a nice vacation each year, all expenses paid. These are all great ways to support your family, but without a proper retirement plan, it can also create dependencies on your family if you cannot adequately support yourself. Very few individuals would intentionally create a dependency that would strain any family relationships. So, it’s really up to you to ensure you have a strong retirement game plan to thrive later in life.

There is no question that TIME is one investment secret that will transform your retirement savings. Taking advantage of the power of compound interest can be a game changer for your nest egg. It is never too late to start – and here at Oak Harvest Financial Group, we help people just like you everyday develop customized retirement plans to meet your goals. Schedule a call today and together, we can set you up for success.

Investment Advisory services are provided through Oak Harvest Investment Services, LLC a Registered Investment Advisor. Insurance services are provided through Oak Harvest Insurance Services, LLC. Oak Harvest Investment Services, LLC and Oak Harvest Insurance Services, LLC are not affiliated with the U.S. government or any government agency. Information presented is for educational purposes only intended for a broad audience. Not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.

“Peace of Mind,” “Safety,” “Principal Protection,” “Lifetime Income, “Guaranteed Income,” or other guarantees are associated with fixed insurance products. No such language refers in any way to investment advice, investment advisory products, securities, or recommendations provided by Oak Harvest Investment Services. Investing involves risk. Rates of return are not guaranteed unless otherwise stated. All guarantees are dependent on the financial strength and claims-paying ability of the issuing insurance company. Annuities have limitations and are not appropriate for all circumstances or individuals. They are not intended to replace emergency funds or to fund short-term savings or income goals. Lifetime income may be available on certain products through an optional rider, at no cost or for an additional cost, depending on the contract. Insurance products are not insured by any federal government agency and may lose value. By contacting us, you may be offered information regarding the purchase of insurance and investment products. 

Oak Harvest has a reasonable belief that this marketing does not include any false or material misleading statements or omissions of facts regarding services, investment, or client experience. Oak Harvest has a reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to www.oakharvestfg.com for additional important disclosures.

 

 

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An Investment Secret That Can Transform Your Retirement Savings
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As you think about retirement, are you dreaming about traversing the world with once in a lifetime trips to mark off your bucket list? Or maybe traveling in your RV throughout the USA taking in the beauty of this great country? No matter what your plans are for the retirement years, ensuring you have a rock solid plan for funding those dreams is more important than ever.
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Oak Harvest Financial Group
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Investment Advisory services are provided through Oak Harvest Investment Services, LLC a Registered Investment Advisor. Insurance services are provided through Oak Harvest Insurance Services, LLC. Oak Harvest Investment Services, LLC and Oak Harvest Insurance Services, LLC are not affiliated with the U.S. government or any government agency. Information presented is for educational purposes only intended for a broad audience. Not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.
“Peace of Mind,” “Safety,” “Principal Protection,” “Lifetime Income, “Guaranteed Income,” or other guarantees are associated with fixed insurance products. No such language refers in any way to investment advice, investment advisory products, securities, or recommendations provided by Oak Harvest Investment Services. Investing involves risk. Rates of return are not guaranteed unless otherwise stated. All guarantees are dependent on the financial strength and claims-paying ability of the issuing insurance company. Annuities have limitations and are not appropriate for all circumstances or individuals. They are not intended to replace emergency funds or to fund short-term savings or income goals. Lifetime income may be available on certain products through an optional rider, at no cost or for an additional cost, depending on the contract. Insurance products are not insured by any federal government agency and may lose value. By contacting us, you may be offered information regarding the purchase of insurance and investment products.
Oak Harvest has a reasonable belief that this marketing does not include any false or material misleading statements or omissions of facts regarding services, investment, or client experience. Oak Harvest has a reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to www.oakharvestfg.com for additional important disclosures.