Rosen Financial, Inc.Bradley J. Rosen, PresidentFinancial Professional1111 Lincoln RoadFourth FloorMiami Beach, FL 33139Phone: 786-276-2452Fax: 786-219-3331bradley.rosen@natplan.comwww.rosenfinancialinc.com

Five Keys to Investing ForRetirement

August 01, 2014

Making decisions about your retirement account canseem overwhelming, especially if you feel unsureabout your knowledge of investments. However, thefollowing basic rules can help you make smarterchoices regardless of whether you have someinvesting experience or are just getting started.

Don't lose ground to inflationIt's easy to see how inflation affects gas prices,electric bills, and the cost of food; over time, yourmoney buys less and less. But what inflation does toyour investments isn't always as obvious. Let's sayyour money is earning 4% and inflation is runningbetween 3% and 4% (its historical average). Thatmeans your investments are earning only 1% at best.And that's not counting any other costs; even in atax-deferred retirement account such as a 401(k),you'll eventually owe taxes on that money. Unlessyour retirement portfolio at least keeps pace withinflation, you could actually be losing money withouteven realizing it.

What does that mean for your retirement strategy?First, you'll probably need to contribute more to yourretirement plan than you think. What seems like ahealthy sum now will seem smaller and smaller overtime; at a 3% annual inflation rate, something thatcosts $100 today would cost $181 in 20 years. Thatmeans you'll probably need a bigger retirement nestegg than you anticipated. And don't forget that peopleare living much longer now than they used to. Youmight need your retirement savings to last a lot longerthan you expect, and inflation is likely to continueincreasing prices over that time. Consider increasingyour 401(k) contribution each year by at least enoughto overcome the effects of inflation, at least until youhit your plan's contribution limits.

Second, you need to consider investing at least aportion of your retirement plan in investments that canhelp keep inflation from silently eating away at thepurchasing power of your savings. Cash equivalentsmay be relatively safe, but they are the most likely tolose purchasing power to inflation over time. Even if

you consider yourself a conservative investor,remember that stocks historically have providedhigher long-term total returns than cash equivalentsor bonds, even though they also involve greater riskof volatility and potential loss.

Caution: Past performance is no guarantee of futureresults.

Invest based on your time horizonYour time horizon is investment-speak for the amountof time you have left until you plan to use the moneyyou're investing. Why is your time horizon important?Because it can affect how well your portfolio canhandle the ups and downs of the financial markets.Someone who was planning to retire in 2008 and washeavily invested in the stock market faced differentchallenges from the financial crisis than someonewho was investing for a retirement that was manyyears away, because the person nearing retirementhad fewer years left to let their portfolio recover fromthe downturn.

If you have a long time horizon, you may be able toinvest a greater percentage of your money insomething that could experience more dramatic pricechanges but that might also have greater potential forlong-term growth. Though past performance doesn'tguarantee future results, the long-term direction of thestock market has historically been up despite itsfrequent and sometimes massive fluctuations.

Think long-term for goals that are many years awayand invest accordingly. The longer you stay with adiversified portfolio of investments, the more likelyyou are to be able to ride out market downturns andimprove your opportunities for gain.

Consider your risk toleranceAnother key factor in your retirement investingdecisions is your risk tolerance--basically, how wellyou can handle a possible investment loss. There aretwo aspects to risk tolerance. The first is yourfinancial ability to survive a loss. If you expect to needyour money soon--for example, if you plan to begin

Inflation means thatyou'll probably need tocontribute more to yourretirement plan than youthink. What seems like ahealthy amount now islikely to feel smaller andsmaller over time.

All investing involvesrisk, including thepossible loss ofprincipal, and there canbe no assurance that anyinvestment strategy willbe successful. Anddiversification alone can'tguarantee a profit oreliminate the possibilityof loss.

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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2014

These are the views of Forefield Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice.Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however,we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professionalservices. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult yourFinancial Professional for further information. Securities offered through NPC OF AMERICA (NPCOA), NPC OF AMERICA in FL & NY, MemberFINRA/SIPC. Rosen Financial Inc., MDRT, Beacon Financial Group, and NPCOA are separate and unrelated companies.

using your retirement savings in the next year orso--those needs reduce your ability to withstand evena small loss. However, if you're investing for the longterm, don't expect to need the money immediately, orhave other assets to rely on in an emergency, yourrisk tolerance may be higher.

The second aspect of risk tolerance is your emotionalability to withstand the possibility of loss. If you'reinvested in a way that doesn't let you sleep at night,you may need to consider reducing the amount of riskin your portfolio. Many people think they'recomfortable with risk, only to find out when the markettakes a turn for the worse that they're actually a lotless risk-tolerant than they thought. Often that meansthey wind up selling in a panic when prices arelowest. Try to be honest about how you might react toa market downturn, and plan accordingly.

Remember that there are many ways to manage risk.For example, understanding the potential risks andrewards of each of your investments and its role inyour portfolio may help you gauge your emotional risktolerance more accurately. Also, having moneydeducted from your paycheck and put into yourretirement plan helps spread your risk over time. Byinvesting regularly, you reduce the chance ofinvesting a large sum just before the market takes adownturn.

Integrate retirement with your otherfinancial goalsMake sure you have an emergency fund; it can helpyou avoid needing to tap your retirement savingsbefore you had planned to. Generally, if you withdrawmoney from a traditional retirement plan before youturn 59½, you'll owe not only the amount of federaland state income tax on that money, but also a 10%federal penalty (and possibly a state penalty as well).There are exceptions to the penalty for prematuredistributions from a 401(k) (for example, having aqualifying disability or withdrawing money afterleaving your employer after you turn 55). However,having a separate emergency fund can help youavoid an early distribution and allow your retirementmoney to stay invested.

If you have outstanding debt, you'll need to weigh thebenefits of saving for retirement versus paying off thatdebt as soon as possible. If the interest rate you'repaying is high, you might benefit from paying off atleast part of your debt first. If you're contemplatingborrowing from or making a withdrawal from your

workplace savings account, make sure youinvestigate using other financing options first, such asloans from banks, credit unions, friends, or family. Ifyour employer matches your contributions, don'tforget to factor into your calculations the loss of thatmatching money if you choose to focus on paying offdebt. You'll be giving up what is essentially freemoney if you don't at least contribute enough to getthe employer match.

Don't put all your eggs in one basketDiversifying your retirement savings across manydifferent types of investments can help you managethe ups and downs of your portfolio. Different types ofinvestments may face different types of risk. Forexample, when most people think of risk, they think ofmarket risk--the possibility that an investment will losevalue because of a general decline in financialmarkets. However, there are many other types of risk.Bonds face default or credit risk (the risk that a bondissuer will not be able to pay the interest owed on itsbonds, or repay the principal borrowed). Bonds alsoface interest rate risk, because bond prices generallyfall when interest rates rise. International investorsmay face currency risk if exchange rates betweenU.S. and foreign currencies affect the value of aforeign investment. Political risk is created bylegislative actions (or the lack of them).

These are only a few of the various types of risk.However, one investment may respond to the sameset of circumstances very differently than another,and thus involve different risks. Putting your moneyinto many different securities, as a mutual fund does,is one way to spread your risk. Another is to invest inseveral different types of investments--for example,stocks, bonds, and cash alternatives. Spreading yourportfolio over several different types of investmentscan help you manage the types and level of risk youface.

Participating in your retirement plan is probably moreimportant than any individual investing decision you'llmake. Keep it simple, stick with it, and time can be astrong ally.

The dollar cost averagingyou do when you makeautomatic contributionsto the investments inyour retirement planaccount involvescontinuous investment ina security regardless ofchanges in its price. Youshould consider yourfinancial and emotionalability to continuemaking purchases duringtimes when prices arelow.

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