Retirement planning is something that is always best started at a younger age. Between the power of compounding, the greater number of potential market and economic cycles and the fact that younger folks can get started with less money, age really works to the investor's benefit if planning starts earlier rather than later.
In reality, however, most people will only start saving for their retirement needs later in life, normally around the 40-year mark. By this time, people have established themselves in their careers, they have their mortgage under control (or paid out in some rare cases), their children are a little older and the spending on children has become financially tolerable and, usually, they are earning close to their peak earnings.
As well, in mid life, the idea of retirement is not only a lot more appealing, but it is much more tangible, a goal that must be taken a lot more seriously. This process can become more "real" thanks to the realization that the first half of one's life really has hurried past; the realization that many "wasted" years has also resulted in wasted gains and opportunities, and so on. Regardless, time often has something of a wake-up call for a lot of late-starting investors.
But starting out later when it comes to your retirement does not mean having to settle for less of a retirement. By this age of life, a lot of people know better what they will want and/or need in retirement, allowing for more-realistic goal planning. And, again, at this age, there may also be additional discretionary income to allow for more aggressive savings.
The biggest downfall with starting late has got to be the lost compounding periods. This can often be "made up" through more aggressive investment tactics, such as shifting more assets into higher growth investments like equities or specialty asset classes. Over the long run (5-10 years) these assets tend to perform better than more conservative investments like bonds, so it may often make more sense to keep a more-aggressive investment approach rather than staying the course in more conservative vehicles.
With this in mind, older investors who are just starting out with their retirement planning should understand their risk tolerance and investment objectives. If retirement involves abundance, then it will mean greater risk or greater savings, which is not always possible. But for the investor who can only start saving later on, these will be the primary focal points.
--> Consider the inclusion of Small Cap Funds like the Marshall Small Cap Growth fund in your portfolio. Find out more at MutualFundSite.org.
Chris has more than 17 years of financial services experience. He currently manages a website about Novaform Mattress Sale opportunities at NovaformMattressSale.com.
Article Source: http://EzineArticles.com/?expert=Chris_Blanchet