Remember when retirement planning was easy?
Back in those heady days, retirement was preceded by you working at the same company for 30 years, retiring, and then taking it easy on the golf course as your monthly check found your mailbox. Just a simple scenario, right?
Well, as you know, bettter than I, those days are gone. Unless someone finds a time machine, they're not coming back.
In other words, we need to find other ways to view and prepare for retirement. In the following pages, the experts at Rebalance IRA offer five issues to keep an eye on regarding retirement planning.
1. In a growing freelance economy, retirement concerns abound.
The independent contractor workforce has been growing dramatically over the last decade, with little sign of slowing as asset rental and task-sharing sites like Uber, Airbnb and TaskRabbit further open the floodgates to new ways of working.
But despite their success, self-employed individuals often face a big-picture financial problem. Without the structure of a group retirement program like a company 401k, it’s easy to become lost in the maze of retirement investing options.
“The Solo 401k is one of the best kept secrets available to self-employed professionals,” says Scott Puritz, co-founder of retirement investment advisory firm Rebalance IRA.
“It’s not talked about enough and it’s relatively new, but for some people this is the best solution that really evens the retirement playing field for everyone who doesn’t work for a major corporation.”
It may seem odd that the world’s greatest “hands on” investor, who has routinely outperformed the stock markets since 1965, recommends to the heirs of his estate to do the opposite.
But that’s exactly what Buffet says in his annual letter to Berkshire Hathaway shareholders: “My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S & P 500 index fund…the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.”
Anyone planning for his or her own retirement should take Buffett’s advice to heart, says Mitch Tuchman, co-founder of retirement investment advisory firm Rebalance IRA. Low-cost, index-driven retirement investing is a proven recipe for success.
“Too often investors think that they can beat the market, despite substantial research saying that this is highly unlikely,” says Tuchman. “The truth is, index investing provides a far superior path toward long-term growth. Even Warren Buffett agrees.”
3. The robo-advisors only got it half right.
4. Getting schooled – investing in college over retirement may not make the grade.