If you want to maintain a more comfortable life in your old age, you need to start accumulating when you are young, so many investors have already started investing for their retirement. However, many novice investors are still confused about how to allocate their investment assets from their youth to their old age, and how to allocate them in such a way that they can earn money for their retirement with low risk. Your expectation must be to get the opportunity or material foundation to enjoy life in the late years when you are about to complete the work handover. I can provide you with a number of key guidance programs in the next explanation of the pension distribution and savings mechanism to help you successfully distribute the pension you value very much.
The risks and returns of investing in different assets are different. Ordinary people who are not good at investing are often convinced that the only way to use their money in retirement is to keep it in the bank, but they do not take into account that there are actually bonds and stocks that can significantly increase their retirement funds. If an investment expert were to plan an accumulation plan for the average person, he or she would suggest that the novice investor invest in bonds, which have lower returns and risks and can be 3% more profitable than simply keeping money in the bank, and for those who are more willing to invest, he or she would suggest stocks, which are slightly more risky but about 8% more profitable, and then allocate the money to savings and investments, taking into account the current state of life. Therefore, experts suggest that we should invest an additional portion of our money in stocks or bonds on top of our traditional bank finances to increase long-term returns. This will allow us to have more funds for retirement in our old age.
Invest in assets with different risks at different ages. In fact, the type of investment that people are suitable for at different stages is always kept changing, so experts have proposed a retirement-oriented investment method. The core concept of this method is that when people are young, they are more resistant to risk, so they should invest more of their principal in stocks that have higher income and risk, and as they get older, their ability to resist risk will gradually weaken, so they can invest more in stocks. Then you can reduce the proportion of investment in stocks and increase the proportion of bonds. To do this, if you are still far from retirement, such as in your 30s, you can invest 70% of your total principal in stocks and 30% in bonds. When you reach retirement age, then you can lower your equity assets to 30% to 40% and increase the remainder to bond funds, but you will not stop investing in equities altogether because they have the effect of fighting inflation in the long run to ensure that the purchasing power of your total assets does not shrink.
Taken together, if you want to have a larger pension in retirement, you can use to invest more money in equity assets when you are young and gradually reduce the proportion of equity investments and increase the proportion of bonds as you get older and less risk resistant, so that you can resist inflation while increasing your total pension. You may be troubled by the feedback effect of the above mechanism because these solutions are quite transcendental problems. Therefore, you need to learn some of the knowledge reserves and financial management ideas I mentioned when you are at the peak of your age. The material reliability and enjoyment feasibility of your later life often depend on your innovative savings planning or strategic thinking at the peak.
