Whether you want to retire like Mr. Peanut or like Charlie Bucket’s family (before they were given the chocolate factory anyways), is largely up to you. A comfortable retirement is just a matter of consistent savings, low investment fees, broad diversification and emotional control over time. Does that sound like a lot of work? Well it gets easier as you go.
Comfortable Retirement Infographic
Although this is a simplification of a somewhat complex process, the Valuist Retirement Investment Timeline Infographic demonstrates easy, time-tested tactics to achieve a comfortable retirement.
Here’s a quick term guide:
- Emergency Fund: 6-12 months of savings to cover necessary expenses in case of a catastrophic event or job loss.
- Asset Allocation: How your investments are balanced, adjusted to your risk tolerance. Try this Asset Allocation Test from Vanguard.
- Tax Sheltered Account: Accounts where taxes are deferred and lower your annual taxable income, or grow and are withdrawn tax free.
- Total Market/Target Retirement Funds: Funds that cover large portions of the market, such as Total US Market Funds, Total International Funds or combinations of both.
- Market Noise/Trends: The daily buzz, scares and hype surrounding market movements.
- Dollar Cost Average: Reducing the average cost of funds by buying at the same time each year regardless of how the stock market is moving.
- Dividend Funds: Mutual funds that prioritize consistent dividend payouts, even when the market is dropping.
- Burn Rate: How much money you’re spending per month, year, decade etc.
Are you more of a Mr. Peanut or a Grandpa Bucket? Comment and we may send you a peanut-sized monocle, fashion cane or a bed for four of your grandparents to share.