Want to retire comfortably? Follow these 3 principles


It’s hard not to feel an emotional and financial pinch when looking at your investment portfolio online. The COVID-19 pandemic has led to some seismic shifts in our investments, with a bouncy-house feel that can create much angst. Some financial planners predict the S&P index could tumble an additional 20 percent before the presidential inauguration in January, assuming there is a surge of coronavirus cases in the United States.

The uncertainty plays with our head and the goal most Americans have: retire comfortably with financial security and at an age of our choosing.

But all of that is still possible, says Nigel Green, the chief executive and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organizations.

“The far-reaching and severe economic fallout has impacted all aspects of financial life and has left many anxious about their retirement planning strategies,” he said. “And there’s more geopolitical uncertainty to come, which will drive markets and therefore personal financial plans.

“However, while financial strategies need to be reviewed to ensure they’re suitable for this new era and the financial environment – which includes a strong probability of negative interest rates and volatile markets – it remains entirely possible to retire comfortably.”

He does offer a cautionary asterisk. Investors will have to form and maintain some good habits.

 “You’ll need to ensure that you save, that you invest, and that you’re tax-efficient,” he said. “It’s my ‘SIT’ process – and all three of the principles are essential for long-term financial freedom.”

It begins with taking money out of your weekly or bi-weekly paycheck and popping some of that money into your retirement income.  Most investment planners suggest saving at least 15 percent of your pre-tax income each year for retirement, including any contributions you may get from your employer.

“In my experience, people simply are not saving enough to live a comparable lifestyle to their current one throughout retirement,” Green said.

Finding the right investments and finding legitimate ways to decrease your tax burden are the second and third pillars of his retirement plan. Diversified investments are critical to long-term goals

“Having the appropriate investment mix in a properly diversified and regularly reviewed portfolio is vital for long-term financial success,” he said. “Financial markets are always fluctuating, but history teaches us that over the longer-term their performance is consistent; they almost always go up.”

Which leads us to the third pillar: Tax efficiency.

The easiest ways to reduce taxable income is by maximizing retirement savings and setting up both health spending accounts and flexible spending accounts.

“Tax efficiency is the third pillar of successful retirement planning,” he said. “There are legitimate ways to reduce your tax burden – and these could amount to major savings over the years.

“Financial security in retirement needn’t be a pipe dream,” he said, “even in these highly unusual times.”

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Millions of Americans have been impacted by COVID-19 and its economic consequences. Many workers have been forced to put a hold on new contributions to 401(k) or other retirement savings plans, which has resulted in a big opportunity cost in terms of lost future retirement income. Some pre-retirees have even delayed retirement altogether or had to reimagine their plans to consider part-time work to improve their savings. So, if your retirement savings progress has been sidetracked, don’t panic. It is never too late to re-start saving for money you will need in retirement.

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