Guest Post from: Bryan Sayers, ForexFraud.com
When you start getting to the age when retirement is down the road, you might be asking yourself if you have enough money saved up. This is a scary topic for many, who unfortunately do not have enough cash on hand to continue living their current lifestyle. It is really up to you to make sure that part of your paycheck is put away into some sort of retirement account. Many companies will match a percentage of their employee’s contribution to their retirement accounts. This is a nice benefit to have; it will encourage the employee to save money because they are being given an additional sum on top of their base salary. Of course this additional sum cannot be accessed until you hit retirement, and can start withdrawing money from the account. However the additional contributions that your employer has matched over the course of your career can be a substantial sum.
In the past few years there are a many people who have lost some if not all of their retirement money because of fraud. The Bernie Madoff and Allen Stanford cases are the two most recognizable, but there were many other money managers that stole their client’s money. The choice of money manager might not have been your choice, but instead the company has picked where to keep your retirement account. Even if they are the ones deciding who manages the employee’s retirement fund, do your research on the money management professionals who are in charge of your funds. The same research is needed if you are self directing money into a fund that you are planning to use when you hit retirement. There are many money management companies out there that will offer you advice on how to manage your money. They are then hoping that you in fact choose them for your money management needs, so they can collect the fees.
Most brokerage firms will allow you to set up a self direct retirement fund, also called a Roth IRA. If you have the time and enjoy doing financial research, giving yourself control over your retirement saving might be a good idea. You will save yourself the management fees that money managers charge their clients. You will also know exactly what you are investing in, because you are executing the buy and sell orders. Setting up your retirement account that you manage is not without risks. The market is very volatile and you are not guaranteed to make money buying or selling stocks. However if you want to buy risk free assets like Certificates of Deposit or Money Market short term paper, then there is no need to pay someone to make these trades for you. The only reason retirees should use a professional money manager is if they want to diversify their holdings into stocks and bonds that they do not understand. Forex trading is also another investment vehicle that could be considered. The forex market is inherently a riskier market to invest in so make sure your money manager has a good track record of investing in currencies if you choose this path. Money managers do not always make money, so giving a professional you money might not bring you the return you were promised.
My advice to everyone who wants to plan for retirement is to locate a company that has been in business for more than a few years. This shows the world that they have the knowledge to guide the average investor through the market successfully. The more branch offices they have the better, with an office close by you can speak to a person about your financial goals, and work on a strategy that fits your needs. The fraudulent companies out there are mainly small hedge funds that require you to lock up your money for a determined period of time. Make sure that you can always gain access to your funds at any time. If your funds have to be tied up for a significant period of time, for example over two years, this could raise some red flags. There are hedge funds that will promise you big returns, but do your research and ask around before you commit any of your retirement saving to a money manager of this type. We can all hope that the Securities and Exchange Commission is doing their job and watching out over the average investor and retiree, so that we can go to sleep at night knowing we have enough money to last us through this period of life. However, you must research every company that you are planning on putting money into and if it sounds too good to be true it probably is
