Building a Portfolio for Retirement Essay -- Economics

Building a Portfolio for privacy According to a survey conducted by the Savings Education Council uttermost(a) year, 24% of all workers were non confident that they were prep ared to retire comfortably. Upon retirement we would like to maintain a certain level of income and lifestyle such(prenominal) as that embeded in the prime of our earning life. Through proper preparation this goal can be achieved. I am going to establish the need for investments/ savings through the life-cycle model of consumption. I willing so walk through standard retirement plans showing that additional mount will likely be needed for the upper-middle class, leading to stock and stay investments, risk tolerance of an individual investor, how that affects diversity and rates of return. On modal(a) Americans save approximately 5% of their earnings. This is the lowest among industrialized countries Japan saves on average 24%, they are the highest savers. The US saves so little in part beca use of the availability and ease of credit, the financial system as come up as an effective Social Security system. However, the US is changing, to depend on todays Social Security for tomorrow alone is a risky venture to say the least. Throughout ones career their earning levels will fluctuate the highest level of earnings is most likely achieved about middle age or mid-career. It is at this time most Americans take down to think about retirement and savings. The life-cycle model of consumption indicates that we desire a constant level of consumption throughout our lifetime. We, therefore, will go into debt when we are young, repaying the debt and begin saving in middle age, and dissave in retirement. While I personally believe that savin... ...o storage banks in the big picture of money. My 95-year-old grandpa has successfully funded his retirement through CDs, a pension, and Social Security. To this day he still invest in CDs and his net worth is six f igures. In large, most investors do non want to do the research in selecting stocks, bonds, and money market accounts for their portfolio themselves at the prime of their career they may not have the time either. A managed fund is an appealing option. A managed fund may cost slightly more, there are management fees involved, typically not more than 2%. Picking a fund lessens the workload, crock up a well know fund such as Janis, Fidelity, USAA, Templeton, Putnam, and so on If you have the money, pay someone an investment fund manager who will take into account who you are. The name on the fund you choose is not so important as they type of fund you choose.