There are many situations in life where waiting is ok or even the smart thing to do. But that is not the case when it comes to saving for retirement. When and how you invest can be a powerful first step toward building a secure financial future.
“The thought of retirement is abstract for so many of us, because it seems so far away when we’re managing work, families and the normal challenges of everyday living,” said Mary Orstein, Manager of Financial Planning for PNC Investments. “In reality, though, there’s no substitute for saving early, even if it’s just a little bit.”
The power of time
One of the most important questions you’ll need to answer when considering saving for retirement is, when should you begin? Generally, if you start early and invest regularly, you can grow even a small investment into a much larger one over time with the power of compounding.
Compounding is the process of reinvesting earnings (i.e., interest, dividends and capital gains) back into your investment, so that over time the increasing value of your total investment can help your assets grow more quickly. Though it is important to note that past performance is no guarantee of future results.
Asset allocation is important
Asset allocation is an investment strategy with the goal of balancing risk and reward based on your financial goals, risk tolerance, and time horizon. This involves dividing your portfolio among different classes, such as stocks, bonds, and cash.
For instance, a portfolio composed primarily of stocks may have higher long-term growth potential, but would also be open to periods of market downturns that could significantly impact its short-term value. Conversely, investing in more conservative asset classes, such as bonds and other fixed income products may shield your investment from market volatility, but at the cost of longer-term growth.
The most appropriate choice will be dependent on your individual financial situation, your ability to tolerate risk, and the amount of time you have to stay invested before drawing on your assets.
It’s important that you revisit your asset allocation choices over time to make necessary adjustments based on changes to your risk tolerance and time horizon as diversification and asset allocation may not prevent a loss of investment.
Guidance is key
Investing for retirement is an important responsibility and working with a professional can be a prudent step toward maximizing your retirement assets to support the lifestyle you want.
When it comes to achieving your goals, it's our belief that success is built upon the strong foundation of a comprehensive financial plan, supported by personalized advice and guidance.
“Balancing retirement savings with life’s other expenses can feel daunting, especially when retirement feels so far away,” Orstein said. “Enlisting help, can ensure you meet both the demands and goals of today while still building toward financial security in retirement.”
By helping you define your goals and understand what you want to achieve, we can help you build a blueprint for your financial well-being.
As part of our dynamic financial planning process, your PNC Investments Financial Advisor can work with you to:
- Understand your unique short-term needs, long-term goals, time horizon and tolerance for risk
- Review your probability of success with sophisticated financial planning tools while illustrating the potential impact of various decisions in real-time
- Construct a customized and comprehensive plan that can be updated regularly to help address changes in your personal circumstances, market conditions, portfolio performance and more
- Help you stick to your financial plan
Contact Us Today
Wherever you find yourself on your saving and investing journey, a PNC Investments Financial Advisor can help you better define what it is you are looking to achieve financially and help put your goals within reach at every life stage – regardless of your starting point.
Talk to a PNC Investments Financial Advisor by calling 855-PNC-INVEST or stopping by your local branch.
