Truth be told, I don’t see myself retiring at the benefit age of 67 nor the average retirement age of 63. While research predicts millennials retiring at 70 or not at all, I am working towards affording the financial freedom to retire (from my day job) on my own terms, when I want. But early retirement doesn’t just happen, it takes a lot of careful planning.
So I now turn to you, where do you see yourself during retirement? How old will you be and what will your financial situation look like?
What sort of bills will you need to cover – i.e. housing and healthcare? And if you have little to no income coming in, since you’re retired after all, how will you manage?
Better yet, how will you thrive!
Even if retirement is a long way from now or you can’t seem to think about it right now because you are knee deep in student loan debt (here are six ways to pay off your student loans faster) and other bills, there’s no better time to plan for retirement while you’re young and here’s why.
How Retirement Planning Works
The longer your money stays in a retirement vehicle like a 401k or IRA, the more it has the potential to grow (or compound). Compounding is simply when your money makes money for you but an important factor when considering the effects of compounding is time.
The more time your money has to grow, the more it can work for you and help you accumulate wealth.
Now that you understand the importance of saving for retirement, if you’re feeling overwhelmed by the number of options online, consider opening a new IRA with a company like GuidedChoice who does a lot of the heavy lifting for you.
Open an individual IRA account here.
Open a small business managed IRA account here.
Retirement Saving With GuidedChoice
GuidedChoice is an independent advisory firm that has over 1.5 million customers and manages a portfolio of over $15 billion in assets.
GuidedChoice’s digital platform helps individuals and businesses achieve retirement goals by providing personalized retirement investment solutions and advice without hidden costs or expensive fees. So in other words, you’ll always know what you’re paying and how it affects your returns ahead of time.
GuidedChoice focuses on helping investors understand their retirement options and since they believe in financial freedom for all, they focus on goal setting and helping clients execute with confidence.
Unlike other financial institutions, GuidedChoice isn’t affiliated with any institutional investor, brokerage firm or investment manager so their advice is objective. They even have a concierge service that helps determine the type of IRA that works best for you, whether it’s a product of GuidedChoice’s or not.
I recently considered opening an individual managed IRA with GuidedChoice after realizing the exuberant amount of fees that I was paying with another firm. Managed IRA accounts at GuidedChoice are available for individuals, employees, self-employed sole proprietors, and employers.
Learn more about individual IRA accounts here.
Learn more about small business managed IRA accounts here.
What is a managed IRA?
A managed IRA is a retirement investment vehicle that you own but a financial professional oversees for you. Depending on the asset’s performance and your goals, your advisor may buy or sell investments on your behalf.
So in a nutshell, you’re active with setting up an account that aligns with your goals but along the way you have access to advisors who can strategize with you and help you tweak your plan.
Advantages to GuidedChoice
With GuidedChoice you can preview the impact of major financial decisions on your retirement plan like buying a home and paying for college. Test different scenarios risk-free and effortlessly make more informed financial decisions about your future.
I also appreciate that there are no minimum investment or plan balance requirements so you can begin contributing to your future and get professional management even if you don’t have a lot of money right now.
Lastly, there’s a benefit to having a financial professional take over. Not only does it relieve you of worrying (if you’re doing things right or on track) but you can still be involved and make adjustments as needed. Change your retirement dates and contributions at any time.
How GuidedChoice Works
- GuidedChoice makes an initial investment recommendation based on your age and the age you plan to retire.
- Next, personalize your investment strategy by tweaking your desired retirement age and contribution rate. Perhaps you want to retire sooner so you want to increase your contributions to reach your retirement goals faster. Or maybe you want to retire later in life so you’ll slow things down by decreasing your contributions.
- GuidedChoice then creates a personalized portfolio that adjusts your glide path and risk level over time.
In a nutshell, a glide path allows you to gradually adjust or balance your investment mix (the way your assets are allocated) so that your portfolio becomes more conservative as you reach closer to retirement.
Since younger investigators have more time to bounce back from risky investments, a young investor’s portfolio will likely consist of equities like stocks but as you get older, following this philosophy, your portfolio will gradually become more conservative. Stocks are the riskiest type of investment but they’re also the most rewarding. Seeing that older investors will withdraw funds sooner, their portfolio usually consists of mostly fixed-income investments like bonds.
What You’ll Need To Open A New Account
- Social security number
- Driver’s license
- Financial institution routing and account number – if you’re transferring money from a checking or savings into a new IRA
- Name of financial institution – if you’re planning on rolling over an account
- Beneficiary information: name, date of birth, social security number and address
Aren’t Managed IRAs Expensive?
Although there is a cost associated with managed IRAs, the good news is that GuidedChoice’s fees are transparent and all-inclusive.
While most financial institutions charge a fee of 1%-3.5% or $10 to $35 per $1,000 to build your portfolio and manage it over time, GuidedChoice’s fees are between $5.70-$6.30 a year for every $1,000 in your managed IRA account.
Remember, GuidedChoice’s fees pay for the investment fees, day-to-day professional management of your account and access to financial advice. This also includes the digital intelligence monitoring that automatically rebalances your accounts to quickly mitigate risk and keep you on track with your retirement goals.
It’s also important to point out that there is an annual fee of $50 for accounts under $50,000 so make sure you take this into account in your fee calculations. For balances over $50,000, this fee is waived.
Overall, GuidedChoice is an affordable robo-advisoresque platform perfect for new investors who need hand holding while setting up and managing their retirement allocations with the counsel of an experienced financial professional. Lastly, the automatic portfolio rebalancing and the lower management fees mean higher returns for the hands-off investor which is a win-win if you ask me.
What are your retirement goals and how are you working towards them?
This is a collaborative post with GuidedChoice.
Danielle is a travel finance strategist, writer, speaker and podcaster. She paid off $63,000 of student loan debt in 4 years, bought a house at 27 and has traveled to 25 countries. She refuses to let her financial responsibilities hold her back from living life on her own terms.