F I SCAL FI TN ESS
MICHAEL J. DONNELLAN King Financial, Inc.
KEYS TO RETIREMENT INVESTING Clients who are financially knowledgeable incurred annual investment returns that are 1.3% higher compared with those who are least knowledgeable about personal finance, according to a study by experts with the National Bureau of Economic Research. The difference is considered significant, “enhancing the retirement nest egg of the most knowledgeable by 25% over a 30-year work life,” the researchers said. Know your retirement savings plans Once retired, your income will come from several possible sources: Social Security retirement benefits, pensions, employer retirement savings plans like the 401(k), personal savings and/or part time work. The value of your employer based savings plans, like the 401(k), 403(b) or 457 plans, will be an important source of that income. The more you save, the more that will be available for you to use during retirement. Maximize your match If your employer offers matching contributions, be sure to contribute at least enough to get all of the match money offered. This is literally as close to “free money” as you are ever going to see in this lifetime.
12 | Official Publication of The Ohio Landscape Association
Have an investment strategy, not a bet Your retirement plan assets can be invested in very conservative investment options. Most plans offer a Stable Value or Fixed Interest rate account. However, a potentially higher return often requires assuming degree of risk to a degree. Therefore you may want to consider investment options that invest in bonds and stocks. If you choose this path, mix up stocks, bonds and cash in a manner that fits your risk tolerance. Your plan will usually offer some help in this area. Don’t pick your funds simply by what they did in the past. continued on page 14