Virginia Beach Retirement Planning
Virginia Beach retirement planning involves more than just saving money. Granted, saving money is important, as saving money will create the foundation of your retirement savings account. However, saving is not enough; you need to invest that money so that it will grow.
Also, savings and investments are different, and it's important that you have both for your Virginia Beach retirement. Savings for now, and your investments for later. Investing money is the best way to secure your future, and therefore it's an essential component of your Virginia Beach retirement planning.
It helps to understand the basics of investing, so you have a better sense of what your investment options are when you're considering your Virginia Beach retirement planning. You need to understand the basic investment terminology, as well as the different types of options. You may invest in stocks, mutual funds, exchange traded funds (ETFs), bonds or cash.
How to Save Money
Your first savings goal should be to have an emergency fund. Getting started on your Virginia Beach retirement planning is essential, but you need to have an emergency fund before you can start planning for anything. Without an emergency fund, you could easily go into debt, which will put a wrench in your future financial planning.
Your emergency fund should be enough to cover your expenses for about three to six months. That way, if you lose your Virginia Beach, VA job, you can still pay the bills and find suitable employment. Once you have an emergency fund, you can start considering other ways you might save money.
One of the best ways to kickstart your Virginia beach retirement planning is to start saving automatically. You can automatically take out a certain amount from your paycheck and put it into a Virginia 401k, for example. If you don't have the option of a 401k from your Virginia Beach employer, you can simply put it into a special savings account. Once you've saved enough, you can invest that money.
Obviously, one of the key components of budgeting is cutting spending leaks. Almost everyone has spending leaks, but sometimes they're hard to spot. One example is television: cable and satellite subscriptions can be extremely costly. Virginia banking fees may be other potential spending leaks, and so are late fees. Pay your bills on time! Also, eating out at Virginia Beach, Virginia restaurants adds up.
Retirement Investment Choices
Investing is one of the key components of your Virginia Beach retirement planning. The basic investment categories are stocks, bonds, and cash. If you're planning to create an investment portfolio, it's important to have a diverse and balanced account. You may want to consult with a Virginia Beach, VA financial planning advisor to create the appropriate investment portfolio.
First of all, though, you need to understand basic investment terminology (if you don't already). Stocks are one of the most common forms of investment, and will probably be part of your Virginia Beach retirement planning strategy. When you invest in a stock, you basically purchase a small share of a corporation. In doing so, you're buying a direct share in the business's success or failure.
A mutual fund basically pools investors money and then purchases stocks, bonds, or both, with that money. Mutual funds are often quite diversified, but some may be more narrowly focused in a particular industry or country. Mutual funds are generally considered "safer" than stocks, because they're already diversified. That being said, it's a good idea to have a balance of both stocks and mutual funds in your portfolio.
A bond is basically like a loan. An investor is essentially loaning money to a business or the government with a bond. Most bonds offer a certain amount of interest which will be paid over time. Bonds are typically quite stable, and might be part of your Virginia Beach retirement planning. However, if you're beginning your retirement planning early, you should know that bonds don't go up as much as stocks during an economic boom.
Cash is a safe investment, for the short run. In the long run, it's eroded by inflation, but in the short run CDs, savings accounts and money market funds may offer reasonable growth. It will be important to have more cash as you get closer to your Virginia Beach, Virginia retirement, but if you have money for long-term investments, cash isn't the best option.
When you're planning your retirement investments, you will need to develop a strategy. You will need to decide whether you're investing for growth or security, and how much risk you're willing to take. Obviously, this strategy will vary depending on your age. You may want to consult with a Virginia Beach retirement planning specialist to discuss your investment options, and create a balanced portfolio to secure your future.