Building a Portfolio for Retirement Essay -- Economics

Building a Portfolio for Retirement According to a survey conducted by the Savings Education Council last year, 24% of all workers were not convinced(p) that they were prepared to retire comfortably. Upon retirement we would like to maintain a certain level of income and lifestyle such as that established in the prime of our earning career. through proper planning this goal can be achieved. I am going to establish the need for investments/ savings through the life-cycle model of consumption. I get out then walk through standard retirement plans showing that additional funding allow for likely be needed for the upper-middle class, leading to stock and hold fast investments, risk tolerance of an individual investor, how that affects diversity and rates of return. On clean Americans save approximately 5% of their earnings. This is the lowest among industrialized countries Japan saves on average 24%, they are the highest savers. The US saves so little in part because of the availability and ease of credit, the financial system as well as an hard-hitting Social Security system. However, the US is changing, to depend on todays Social Security for tomorrow alone is a risky venture to opine the least. Throughout ones career their earning levels will fluctuate the highest level of earnings is most likely achieved around middle age or mid-career. It is at this time most Americans begin to think about retirement and savings. The life-cycle model of consumption indicates that we desire a constant level of consumption throughout our lifetime. We, therefore, will go into debt when we are young, repaying the debt and begin saving in middle age, and dissave in retirement. While I personally believe that savin... ...o fund banks in the big scenery of money. My 95-year-old Grandfather has successfully funded his retirement through CDs, a pension, and Social Security. To this day he still invest in CDs and his net worth is six figures. In large, most investors do not want to do the research in selecting stocks, bonds, and money market accounts for their portfolio themselves at the prime of their career they may not grant the time either. A managed fund is an appealing option. A managed fund may cost slightly to a greater extent, there are management fees involved, typically not more than 2%. Picking a fund lessens the workload, pick a well know fund such as Janis, Fidelity, USAA, Templeton, Putnam, etc. If you have the money, pay soulfulness an investment fund manager who will take into account who you are. The name on the fund you choose is not so important as they shell of fund you choose.