Are Financial Markets The Best Bet For Retirement?
By Anonymous
No matter what your personal retirement planning aims are, there a number of savings plans available to help achieve your goals. But an increasingly asked question is nthe Baby Boomer generation is "are the financial markets the best bet for retirement planning"?
Now I might make a few controversial comments here, but we're all mature adults right? I am not suggesting for a moment that you aboandon all the advice that you have ever been given, but would like you to look at things froma slightly different perspective. I would also like to point out that you should always talk to a qualified financial advisor before making a financial investment.
But let me ask you this: "has your financial advisor had the experience in life that you have, or are they a young graduate that has no experience of the challenges in life"? Equally, can you look at your financial advisor and truly say that they have your best interests at heart, or even understand your long term goals and concerns? Lets face it, most of them have not even walked the walk of life and their prime interest of the day is selling the latest hot policy and gbetting the commission or winning the top salesperson award for the month.
Call me a cynic, but I have been there and experienced the unethical peer pressure to sell certain financial products based on sales targets, not to satisfy clients long term needs, so do excuse me if my opinions are a tad jaded.
The financial markets have traditionally been the mainstay of retirement planning but for a majority of investors, the focus here tends to be savings based growth. The preparedness of the investor to risk their investment stake ultimately increases the chances of generating additional wealth. In other words, as a rule of thumb, the higher the risk the higher the rate of return.
The problem with this investment model is for many people it is a contradiction of their primary aim, which is have a secure retirement! How many of you would risk the nest egg that you have been saving all your life, for a risky investment where potentially you could lose the lot? I would wager that not many people would fall into this category.
So the behaviour we tend to see in the financial markets is most people opting for the safe investment in savings accounts, and income or interest generating bonds for example. While these can be useful to our retirement portfolio, generally growth is relative to the initial investment and real new money is never generated. So in my opinion these should be seen as more of a safe haven for existing capital, not as a method of residual income generation.
But the big question here is what do you do if you have very little to invest?
Unless you have been on a desert island for the last couple of years, you're well aware of the concern regarding the need to generate retirement income over much longer periods than we have been used to in the past, and you may already be asking yourselves some very searching questions. A question I ask is, why are the financial institutions still pursuing and promoting the same traditional methods of income generation that have been the mainstay of past generations?
When was the last time your "financial advisor" discussed income generation plans? One of the topics we will cover going forward is going to be income generation, and we will look at some of the offerings available both traditional and internet based.
Hopefully this will give you a few ideas to get your creative juices flowing and perhaps act as the catalyst to help choose a path that is most suited to your own particular circumstances or perhaps give you an idea that you have not yet considered.
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