9 Year Mortgage Advice on Stocks for Retirement
With today’s ever changing market, is it difficult to always be following equities. With the new 401 (k) plan to avoid such equities would mean high contribution rates. So what is the best way for retirees to take advantage of the equity premium in this new system?
Some would say that the best solution is to grasp the equity returns on the Social Security System, but the risk that is associated with this over the upcoming generations may outweigh the option and expected outcome. Instead many individuals have contemplated investing trust fund assets of Social Security instead. This has been an ongoing debate since 1994-96 by the advisory council of Social Security.
This decision would distribute the level of risk involved, which makes sense to participate in when you are young and less when you are older. The younger that someone invests, the less likely it is they hold risky assets or high yielding assets, so their social security is invested in bonds.
Having such investment in equity can make Social Security less expensive, because the return on Social Security assets becomes higher. Those that participate would be expected to contribute less to Social Security then those without the plan. This gives them the option to invest their 401 (k) in a way that best suits them.
9 Year Mortgage Concerns
Although all of these investments seem great, there is concern about investing trust funds from Social Security into equities because of the power it puts into the hands of the government. If one uses trust fund assets solely for momentary satisfaction, it can undermine their retirement security of income.
Though this may seem extreme, it is a legitimate concern that should be thought about as many individuals are now turning to stocks to invest social security. This could potentially destroy their assets over time and give power to the government in economy. There are other countries such as Canada for example that invest only a portion of their equities as a safeguard against such potential threats of government involvement.
In contrast, the United States rejected such a process from occurring in active investments, though it was suggested time and time again. The United States instead called for an investing broad market index such as the Wilshire 5000 or the Russell 3000. This process allowed for a professional board to select the index and choose the portfolio managers for each account, monitoring the performance. This in turn ensures that the government does not disrupt corporate freedoms, however there are many people who vote for a different process of investment.
9 Year Mortgage Solution
Overall, those who plan to retire and are aware of stocks and 401 (k) plans know that a portfolio of investments should also include some invested equities. Equity investing can be done through Social Security, and the more that it is apposed to the 401 (k) plans the potential investments savings will be higher. Be aware of where you are investing your money and the motifs behind government involvement in your decisions. Stocks can be a great investment while you are young and planning for retirement, as age increases be aware of the risk involved with such investments.