Question Of The Month –September  2009

“How Can You Develop your Retirement Investment Plan?

1. What Are Your Goals - Objectives For Investing. 

            Your objective in this situation should be to develop an adequate nest egg to fund your comfortable secure retirement.  What age can your afford to --- would you like to retire.

2.         What Is Your Time Horizon.

            The number of years you have to invest before reaching your goal.  Your time horizon is long-term, unless you are 5 years or so until retirement.  Long-term in that you are not looking just until the day you retire but for the rest of your life.  You will need funds for other goals…a house, a car, college tuition for kids, etc.  These funds should be in place outside of your retirement nest egg in a more liquid vehicle where it will be more accessible.

3.         What Is Your Personal Financial Situation

            The stability of your job, the state of your finances.  Your job and financial situation - position may enable you to take on more risk than someone with an unstable job or finances.

4.  How Much Money Will You Need to Live On?

            Difficult to determine until 5 – 10 years before you retire but --- you should try to determine a ballpark figure. 

5.  Your Sources Of Income In Retirement.

            Social Security, a pension, a 401(k), 403, 457 plan,  other savings – investments, rental income, a part time job. 

6.         What Is Your Tolerance For Risk

            Your view of  risk is probably different than mine.  It  is probably different than your brother, sister, next door neighbor, co-worker, the mechanic who works on your car..  We all approach risk from a different perspective.    With the right mix of investments you should be able to make the most of your saving-investing dollars while striking a comfortable balance between risk and reward. 

7. Given Your Tolerance For Risk, How Will You Allocate Your Assets? 

            Develop a formal plan in writing that will guide you with all of your saving – investing efforts.  Too many investors make too many mistakes – market timing, chasing performance, buying on a hot tip, etc. -- when they do not have a plan.