Historically, election years tend to bring varied levels of uncertainty and volatility to the stock market. This can translate into potential anxiety and a lack of confidence to the retirement investor.
As investors, it can be increasingly challenging to ignore the noise, news cycle, and social media headlines. Political elections tend to be highly visible events, however, the most important driver for retirement investing is not the occupants of Congress or the White House…it’s you!
Start investing as early as possible, regardless of speculative market events. Time is one of the most powerful components of investing for retirement. By starting early, retirement investors can take advantage of years of compound investment performance to build wealth.
Resist getting caught up in the daily market movements and headlines. Checking retirement accounts constantly can lead investors to make decisions based on emotions. One of the most powerful features of an employer-sponsored retirement plan, like a 401(k) for example, is dollar-cost averaging. This is where your contributions are routinely invested regardless of current prices or market conditions.
Focus on what you can control. It can be tempting to try and time the market or invest according to speculation. However, remember what you can directly control. Consider the positive impact on your retirement that increasing contributions could make or perhaps rolling over an old account to your current employer’s plan. Focus on retirement goals and the necessary actions to achieve them.
It can be challenging to filter out the noise and focus on what truly matters for retirement investing. The above key considerations are a great start towards a successful retirement. Taking full advantage of your employer’s retirement plan can help you reach your financial dreams!