Five Ways to Invest for the Future

At some point you will no longer be able to work, or want to work, due to health conditions, age or the economy—or all three. Thus, it is critical to “marry” long-term investment strategies to retirement planning.

You cannot depend on Medicare, Social Security and other government-based programs to comfortably sustain you through retirement. The strain on these programs will only increase as the Baby Boomer generation swells the rolls. Also, no one knows exactly what the future holds. Long-term investment planning can provide some peace of mind.

Although each situation is different, here are five practical steps to follow.

  1. Set your goals. Start by establishing your main objectives. This requires an analysis of certain aspects such as your intended retirement date, the amount of money you hope to have in retirement, the amount to invest on a regular basis and how you expect to attain your goals. Write down the goals on paper to use as an ongoing guideline.
  2. Stick to an investment schedule. Disposable income is hard to come by. When possible, try to invest at regular intervals to keep building up your portfolio. Generally, it is easier to make small investments over time as opposed to large sums. One idea: Pay yourself before you pay others by taking a set percentage or dollar amount from your paycheck each month. Of course, if you should suddenly come into a windfall, such as an inheritance, it also makes sense to invest this amount wisely.
  3. Give yourself a raise. Even if you are not in line for a salary increase at work, you may be able to bump up your take-home pay by claiming extra withholding allowances. Try to bring your tax return liability to zero. If you are getting a big refund each year, you are effectively giving the government free use of your money. Consult a professional tax adviser.
  4. Use common sense. Making sound investment choices requires a careful balance. On one hand, you want to receive a reasonable return, but do not expose yourself to inordinate risk. Do your “due diligence” before you invest. Also, remember: Past performance is a factor to consider, but it is not a guarantee of future success.
  5. Seek professional assistance. These tasks may be daunting, but you do not have to do it all alone. If you decide to rely on a financial services firm, make sure you choose one that will help you concentrate on your investment goals. The firm should work with you to protect your interests. At the same time, you can remain in complete control of your finances.

Finally, be aware that there are some potential downsides to a plan of long-term investing, but the pros far outweigh the cons. These five steps can help put you on the path to a rewarding future.