I’m relatively young, still under 30, why would I need to start retirement planning so early?

This is a common question among the younger generation. Why would a healthy young person take money from their paychecks and start a retirement account? There are several good reasons to start planning your retirement early. The most important factor when considering when you should start thinking about your retirement is compound interest. Compound interest is defined as, the interest gained on your principal amount as well as interest already accrued. The combination of time and compound interest can make your retirement account everything that you want it to be.

Why start now instead of when I’m 30 or even, 40?

Every year that you put off contributing to a retirement account makes a big difference in the amount you will accumulate at the age of retirement.

For example, if 20-year-old, You, makes a one-time contribution to your Roth IRA and earns an average annual return, and if you never touch the money, that contribution will grow to FOUR times the amount of what it would have been if you had waited to start, at age 40, if you plan on retiring at the age of 65. This is assuming that the average rate of return is the same for the 20-yr-old and the 40-yr-old.

I would only be able to contribute a very small amount, what kind of difference would such a small amount make?

If you only invested $20 a month every month for 45 years, with an average interest rate return of 8%, you would have a nest egg of over $100,000 at the age 65. So what is your priority? The $20 extra dollars you could be spending now, or the $100,000 savings at age 65?

I like to take a hands-on approach to my investments. I regularly invest in the stock market and make my own selections regarding my 401k asset allocations. How could a retirement specialist or client advisor help me?

Even if an individual investor is on track to reach their retirement goals, it is always a good idea to consult an experienced, licensed and trained Client Advisor. An Arvest Asset Management Client Advisor can be the all-important second set of eyes, second opinion, and trusted professional to make sure you reach your goals. An Arvest Asset Management Client Advisor can also offer you peace of mind by guiding you through a unique retirement planning process called Envision.

What is the Envision Process?

The Envision process begins when you sit down with your Client Advisor to discuss important ranges of goals. For each life goal, you will determine what an ideal goal is versus an acceptable goal. Next, you’ll work with your Client Advisor to prioritize and decide which goals are most important to you, including going through some “what if” scenarios. Your Client Advisor will then analyze your financial situation and goals and present you with advice and guidance, including investment recommendations as well as the level of confidence that you have in achieving your goals. The Envision process subjects your goals and investment strategy to a sophisticated “stress testing” process that simulates 1,000 lifetimes of market environments. These include market conditions similar to what we have seen in the past and some that we have not experienced.

Remember, your situation is not static – as life goes on, your Client Advisor will be there with regular contact, monitoring, advice and guidance – always ready to answer that key question: “How am I doing?”

So you invest yourself, what are some questions that I need to ask myself?
1. Do I have a proper mix of stocks, bonds, and mutual funds for my goals?
2. Am I taking on more risk than I need to?
3. Am I taking enough risk, to help maximize my earnings?
4. Is my retirement plan going to work?