Millennials looking to retire at age 65 have thirty to forty years to prepare and another thirty to forty years to provide for. Here are some guidelines we use in our practice:
Acquire discipline: set aside 10% of disposable income to the retirement nest egg.
Open your eyes: Retirement investing is intended to ultimately generate decades of income in the distant future to sustain unprecedented longevity.
Learn patience: the nest egg should be “put to work” by compounding consistent gains; aim strategically for singles and doubles rather than swinging for the bleachers.
De-risk: Market volatility and realized losses, especially early in the accumulation or spend-down phase, can undermine the best-laid plan and the ability of the nest egg to achieve its long-term income objectives, so avoid them.
Seek shelter: The retirement portfolio should be insulated from rising taxation, the most consistent drag on growth especially for Millennials who may face higher taxes than their forebears. It should therefore be “nested” in IRAs, Employer qualified plans, deferred annuities and cash value life insurance to provide the needed tax shelter.
Hedge: Invest the nest egg for the long term insulated from downside risk but positioned to share in the market’s upside potential.
Diversify: Another key to long term investment success, diversify across asset classes in terms both of tactics and strategy.
Think outside the box: Explore the economic advantages offered exclusively by actuarial science rather than limit yourself to conventional stock-and-bond investing.
Integrate: learn how next-gen longevity insurance can complement securities in a retirement portfolio to achieve more predictable results.
Consider the alternative: Evaluate the multi-faceted fixed index annuity (FIA) and the role it might uniquely play as a retirement portfolio’s stable core.