10 Tips about Retirement Investing

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A woman I know recently said to me, "I really should go to the bank to discuss my retirement fund, but I don't know what they are talking about, so I become embarrassed". This is sad, but universally true. This slide presentation may provide some ideas.

Transcript of 10 Tips about Retirement Investing

  • 1. 10 Tips about Retirement InvestingPresented byOlderhood.com The fastest growing website for the fastest growing segment of our community.

2. 10 Tips about Retirement Investing First the commercial message !!Olderhood.com is a Blogsite & Facebook & Pinterest & SlideShare, providing quality articles, reports, surveys, information and humor for the Oldster community. Olderhood.com is owned and published by Oldsters themselves. 3. 10 Tips about Retirement Investing Tip #1 Prepare a Budget Work out your monthly income from pensions, investment income, etc.Work out your normal monthly expensesAdd in a fudge factor for expenses and divide equally by 12 to get monthlyInclude an annual travel amount and divide equally by 12 to get monthlyBe aware of unexpected expenses (you cant budget unexpected)Monitor this budget every week/month and adjust accordingly. 4. 10 Tips about Retirement Investing Tip #2 Analyse your pension fund statement. Make sure your pension provider sends you a statement monthly/quarterlyGet to understand what all the lines and boxes and numbers meanIf you dont understand ask. There are no dumb questions.Fully understand the difference between value increases and income.Compare this statement to last months, and last years same monthDo NOT throw them away, use a file/folder, and hold on to them. 5. 10 Tips about Retirement Investing Tip #3 Understand your Pension Fund Portfolio Mix. The Portfolio Mix is the make-up of your shares, mutual funds, bonds, etc.Clearly understand what each asset class (above) is doing for you.Be clear on which asset class provides (cash) income and value increaseAs your needs change (check your Budget), change the Portfolio Mix.As you get older, the typical Portfolio Mix is to increase more Fixed Income.Fixed Income means income from a Bond for example which doesnt fluctuate. 6. 10 Tips about Retirement Investing Tip #4 Self-Managed Pension Funds This simply means that you do not use an outside, or professional, manager.If you know what you are doing, this is a much more personal approach.This will more easily help you correlate your Budget and your Portfolio Mix.But this is not for the faint-hearted, or know-it-allsBe constantly watching your Portfolio and Financial News for changeBe constantly updating your income/value projections. 7. 10 Tips about Retirement Investing Tip #5 The name is Bond Companies, Governments, etc issue Bonds.They are investments which pay a set interest rate (Fixed Income )If market interest rates go up, Bond Values go down, and vice versaBonds will normally have a Call Date when the Borrower can call them in.Find out the difference between Coupon Rate, Yield to Maturity, Yield to CallGenerally, Bonds pay better interest rates than Savings accounts etc.. 8. 10 Tips about Retirement Investing Tip #6 Ordinary Shares (Equities) These are shares issued by companies on the NYSE for example.Shares have a Buy Price and a Sell Price - values fluctuate.Shares usually, but not always, pay an annual dividend (usually quarterly)Ordinary Shares are deemed higher Risk than Bonds - be awareOrdinary Share Prices are influenced by the companys performance, and the economyOrdinary Shares are potentially high overall return investments - but NOT always. 9. 10 Tips about Retirement Investing Tip #7 Preference Shares Preference Shares are typically issued by companies.They will usually be quoted on the Stock Exchange e.g. NYSE.Preference shares typically have a fairly stable dividend payment plan.Generally speaking Preference Shares do not wildly fluctuate in value.Preference Shares typically rank higher than Ordinary Shares in terms of (less) Risk.Preference Shares from a quality company are usually good investments. 10. 10 Tips about Retirement Investing Tip #8 Mutual Funds. This a great way to manage your Pension Fund/Investment Portfolio.Mutual Funds come in all sorts of shapes and sizes shares, bonds, cash, etcMutual Fund Managers also come in all shapes the good, the bad, and the uglyTrack Record is a good indication of performance - but should not be THE sole driverMonitor the Fund and the Manager regularly.Mutual Funds, if chosen appropriately, are deemed to be lower Risk 11. 10 Tips about Retirement Investing Tip #9 Cash Flow versus Value Increase. Cash Flow means cash flowing into your bank account (or reinvested)Value increase means the portfolio goes up, but no cash inflows.If you dont need the cash for living purposes then consider value increase.If you do need the cash for living purposes then seek Cash Flow.If you intend to leave money to the kids, balance between Cash and Value.If you expect to live long (hope so) then be cautious about that balance. 12. 10 Tips about Retirement Investing Tip #10 Drive carefully. Its easy to Buy, but not so easy to SellWhen someone tells you its too good to miss, its probably worth a miss.Watch all trading costs, including mutual fund feesIf its a dud, cut and runNever be oversold by an enthusiastic manager, especially if hes youngAnd Remember Its YOUR MONEY Got it...?? YOURS !!!!! 13. 10 Tips about your Retirement Investments Meet the Olderhood TeamBill Storie, FounderRobin Trimingham, Co-Founder and EditorRoger Crombie, Lead Contributor 14. 10 Tips about your Retirement Investments Olderhood.com From Childhood,through Adulthood,to Olderhood. Come join us.