With the stock market in its current state, it would be a good idea to re-examine your retirement account and the investment strategies connected with them. According to a recent article in the “Wall Street Journal” (WSJ), most people make their initial investment decisions and then forget about their retirement account. This lack of review can impact your savings over the long term.
The article mentions two issues in particular that you should keep in mind during this review process. The first relates to your mix of investments. The second relates to gauging exactly when to retire.
In terms of your mix of investments, you should see if your account has a balance of stocks and bonds that is appropriate for this point in your career. A good way of maintaining such a balance is through Target Dated Funds, which tailor their mix of stocks and bonds to how many years away you are from retirement. Those further away from retirement will have a mix more geared towards stocks, while those closer to retirement will have a more conservative mix, perhaps one more geared to bonds. NADART offers a number of different Target Dated Funds as investment options.
In terms of gauging when to retire, you need to see how much retirement income will be available if you retire at one age versus another. The WSJ article shows that under certain circumstances, an individual retiring at age 62 could expect to have about $26,000 a year in retirement income, while waiting till age 67 to retire could boost that figure to just over $41,000 a year. Factors such as having more employee and employer contributions made, compound interest accumulating longer, and not having to withdraw money until a later date can all impact your final retirement income balance. (Working longer can also boost your Social Security income.) NADART has several online calculators that can help you to sort through these factors and estimate at what age it would be most appropriate for you to retire.
If you would like to sponsor a NADART retirement plan and want to learn more about our plan features and services, please complete our online Product Information Request Form. Or you can contact one of our Marketing representatives at (800) 462-3278, ext. 7161 or by e-mail at nadart401k@nada.org.