Though many of us may prefer to turn a blind eye toward the reality of aging and retirement, personal denial has not yet managed to stop the flow of time. When it comes to investing for retirement, this is particularly true. The future is distant, and many workers do not feel a strong enough sense of urgency to diligently sock away the funds that would be necessary for them to live comfortably after they stop working. So, how can investors push themselves toward better practices for investing for retirement?
Choice architectures: developing an awareness of what shapes your investing
“Choice architecture” theorists note that systemic nudges can help us to make better choices, such as saving more effectively for the future. Some workers have an advantageous choice architecture when it comes to investing for retirement; traditional employers may incentivize retirement savings through initiatives like 401k matching. However, many other workers are increasingly being hired as independent contractors, under which the employer benefits are fewer, and retirement savings are left more to personal choice than built into one’s program of payment.
For those with more responsibility for planning their own retirement (or those looking to beat potentially lackadaisical rates of return in their workplace 401k), it is necessary to assess one’s goals and resources, and invest for retirement in such a way that you can count on relatively secure returns that stay well ahead of inflation.
Investing for retirement in the stock market: why it works
Cash is like fruit; if it’s not used, it’s just going to get old and lose value. This is because cash doesn’t have intrinsic value as a substance, the way that other assets or investments do. It’s a signifier of value that demarcates the market value of cash at the time of its acquisition. Stocks on the other hand, when held and traded as part of a well-managed and appropriately diversified portfolio, keep step with the economy and grow in value over time. Investing for retirement in the stock market is a logical choice. As workers invest for retirement in the stock market, they should seek out expert advice and relevant market news to make the best possible choices
Staying informed on how to invest for retirement in the stock market
Successful investing requires a baseline of knowledge about the market, so that you can monitor your investments appropriately and optimize your returns. However, after working for one’s hard-earned wages, many of us do now want to feel like we have to treat retirement investing as a second job, that requires intensive research, stock-watching, and bean-counting. Instead, consider subscribing to a stock market newsletter or market publication that delivers relevant investing information to you, based on your level and area of interest.
John Thomas, a financial expert, former Tokyo correspondent for The Economist and the Financial Times, and former active hedge fund manager, offers a range of stock market newsletters that help investors stay aware of what’s going on in the market, and more profitably manage their investments. The testimonials from John’s readers speak for themselves. If you’re ready to optimize your retirement income by investing for retirement in the stock market, check out our online newsstand, or get in touch for more information.