Investing In Your Future

Retirement is an idea that is coming for all of us. By not being prepared for it, we set ourselves up for financial hardship in the future. However, if we start building wealth now through investing and creating a retirement plan, we could create a financially secure life by the time we are ready for retirement. Investing is the first step to start building wealth for yourself. In 2018, 37% of Americans between the ages 18 to 34 years were invested in the stock market (Norman, 2018). Your younger years are the prime time for you to start thinking about investing. A benefit to starting early is you can take on more risk or be able to take a financial loss because you have a long time before you need to use your funds. Patrick Gleason, a wealth advisor at William Blair, believes that another benefit to starting early is the “compounding returns over years can be quite significant”. Although starting your investment journey early has many benefits, there are also several other factors to consider. Capital gains tax is a type of tax you pay on the profits you make after selling certain assets. These taxes can be minimized by opening a Roth IRA and/or a 401k account. A Roth IRA is a type of retirement account you can own that allows tax free growth on your assets. According to GoBankingRanks, “64% of Americans are not prepared for retirement” (Dennison, 2019). By opening an IRA account you can have money for when you retire, avoid losing money on taxes, and reap the benefits of your long-term investment strategy. If your employer offers a 401K plan, this is one of the easiest ways to begin saving for retirement. Be sure to learn more and consider contributing to these plans, especially if your employer offers to match your contributions. Now that you know the benefits of starting investing and thinking about retirement early, you may still be confused on where to exactly begin. During an interview with Angela Wang, an analyst at Willaim Blair, she suggested that you “put in a minimum of 50 hours of learning on the basics of investment”. There are more investor and financial tips on otmonline.org. Investopedia.com is a great way to learn about financial terms. Also, speaking to advisors from credible firms with credentials such as Chartered Financial Analyst, Certified Financial Planner, etc; learning more about benefits programs at your work; talking to your banker; or even taking college classes can help you get a better understanding of how you should particularly start your investment journey. Learn more about investing at FutureFinanceReady.org - Be Ready to Invest. Resources: Websites: https://www.gobankingrates.com/retirement/planning/why-americans-will-retire-broke/ https://news.gallup.com/poll/233699/young-americans-wary-investing-stocks.aspx

Investing In Your Future