But, not many of us have 40 years left… I know I don’t. So why mention it here in Wealthy Retirement?
Because almost all of us have 20, 25 to 30 years to go and that’s more than enough time to make a huge difference in our retirement income… if we make a few minor adjustments now.[ad#Google Adsense 336×280-IA]Remember, retirement planning is not just about making it to retirement.
It is about making it through retirement, as well.
So, with 25 and 30 years in retirement – which most of us can expect – we will have plenty of time to make changes that will affect the quality of our life for many years.
There are lots of ways to bump up your return in retirement by as little as 1%.
You increase the equity position in your portfolio.
You can own more small caps. Or you can add large cap value stocks or own low-cost index funds. I’ve talked about those here before.
All of these are fine if – BIG if – you have the time to let them work and, more importantly, can assume the increased risk they carry.
But here are two ideas that will increase your return far more than the required 1% and won’t increase your risk at all. In fact, they’re going to lower it.
- Don’t second-guess the market by moving in and out of positions based on insecurities and fears. That’s how most people make decisions. The best research shows that if you can avoid doing that you’re going to double your long-term return. Not increase by 1%… double it. If you’re holding the types of securities I’ve talked about here in the Two-Minute, you should be able to stay put through just about anything.
- And the second idea… Postpone retirement by as little as two years. This is going to give you about a 25% increase in your income in retirement.
And this is how… You’re going to have two more years to contribute to your retirement and two fewer years that you will have to draw from your funds. That’s going to allow you to draw 5% each year, not 4%, and that’s a 25% increase.
Increasing your retirement income does not have to include increasing risk. Learning to let the market be the market and giving the economy your two cents for two more years is all it takes to build a much nicer life for your golden years.
Make the changes now! Believe me, you don’t want to wake up broke in your 80s.
— Steve McDonald[ad#wyatt-income]
Source: Wealthy Retirement