Financial planning or retirement planning for retirement is a goal you cannot afford to neglect. Whether you like it or not, you will face the reality that you are less relevant in the workforce or that you are not healthy enough to work one day.
When that day comes, you want to be prepared to pay for your daily living expenses and continue living a similar lifestyle. This means you need a nest egg that you can rely on.
Start building your retirement nest egg though smaller and more achievable steps – via a dollar-cost averaging, or DCA, strategy. In this strategy, you contribute a small sum of money each month, regardless of how well or badly the economy is faring. This allows you to ride out short-term market ups and downs and enables your investments to compound over a long time horizon.
The combination of this is that you will grow your retirement nest egg into a substantial amount, without making emotional decisions while the economy suffers or flourishes in the short-term, and stay focused on your long-term goals. At the same time, you also retain the flexibility to review your retirement goals regularly, and if you feel you need to be putting more away, you can simply do so.
One way to embark on a DCA strategy is to invest in the stock market. You can choose to put your money into country indexes, that track blue-chip companies which are typically the largest and most liquid companies listed in the country. You can do this on your own, via exchange traded funds (ETFs) listed on the individual stock markets, or if you are less confident at the beginning, through unit trusts or robo-advisory platforms.
Another thing you can do is invest through a savings plan, such as AIA Smart Wealth Builder. Similar to investing on your own, you are able to ride out short-term market fluctuations. It also lets you compound your money confidently without having to choose specific investments on your own.
AIA Smart Wealth Builder also provides you a safety net to cover important goals, including supporting your child through a good education, building towards a fruitful retirement or leaving a legacy for your beneficiaries, as well as letting you sleep more soundly with assurance against death, total and permanent disability and terminal illness.
To find out more about AIA Smart Wealth Builder, contact your financial services consultant or speak to us today.