Money worries top all concerns, according to a new eTrade survey of experienced investors. And not having enough money for retirement
is the biggest fear for those investors overall. It's also the top
financial fret for people in or near retirement as well as people in
midcareer, between the ages of 35 and 54.
And it's nearly the No. 1 worry also for investors who are 25 to 34 years old. In that age group, not understanding how to invest smartly barely edged out retirement savings woes, 39% to 37%.
How can you ease your concern about amassing a big enough retirement nest egg?
The survey respondents already seem to know the answer. In another part of the survey, when asked what they wish they had started doing when they were younger, 48% of the investors said they wish they had started saving for retirement at an earlier age.
"Time is definitely your friend," said Lena Haas, senior vice president of retirement, investing and saving at eTrade (NASDAQ:ETFC).
An early start lets you invest aggressively in growth stocks, stock funds and ETFs. It gives your portfolio time to rally from short-term market volatility, Haas says.
Starting early maximizes other benefits as well: compound growth, matching contributions in 401(k)s, tax deferral in accounts like 401(k)s and IRAs.
Young investors can offset some lack of investment savvy by investing in diversified stock funds and ETFs. That way, the tendency of equities to outperform bonds over longer periods works in your favor.
From 1926 to 2014, stocks averaged a 10.12% annual return vs. just 5.67% by bonds and 9.22% by a mixed portfolio of 70% stocks and 30% bonds, says Morningstar Inc.
Stocks' Strength
Stocks' history of outperformance also eventually makes up for market volatility. Stocks beat bonds in 71% of the 85 rolling 5-year periods from 1926 through 2014. They also topped bonds in more than 74% of the rolling 20-year periods.
Still, some investors want to focus just on recent history: the market they've gone through.
So let's look at the past 20 years, which included the financial crisis of 2007-09 and the tech bubble bursting in 2000.
If you invested $5,000 a year in SPDR S&P 500 ETF (ARCA:SPY), tracking the big-cap benchmark, by June 30 you would have amassed more than $250,000.
If you invested in a typical intermediate-term bond fund like $6.8 billion Fidelity Investment Grade Bond Fund , your balance would be nearly $181,000.
And it's nearly the No. 1 worry also for investors who are 25 to 34 years old. In that age group, not understanding how to invest smartly barely edged out retirement savings woes, 39% to 37%.
How can you ease your concern about amassing a big enough retirement nest egg?
The survey respondents already seem to know the answer. In another part of the survey, when asked what they wish they had started doing when they were younger, 48% of the investors said they wish they had started saving for retirement at an earlier age.
"Time is definitely your friend," said Lena Haas, senior vice president of retirement, investing and saving at eTrade (NASDAQ:ETFC).
An early start lets you invest aggressively in growth stocks, stock funds and ETFs. It gives your portfolio time to rally from short-term market volatility, Haas says.
Starting early maximizes other benefits as well: compound growth, matching contributions in 401(k)s, tax deferral in accounts like 401(k)s and IRAs.
Young investors can offset some lack of investment savvy by investing in diversified stock funds and ETFs. That way, the tendency of equities to outperform bonds over longer periods works in your favor.
From 1926 to 2014, stocks averaged a 10.12% annual return vs. just 5.67% by bonds and 9.22% by a mixed portfolio of 70% stocks and 30% bonds, says Morningstar Inc.
Stocks' Strength
Stocks' history of outperformance also eventually makes up for market volatility. Stocks beat bonds in 71% of the 85 rolling 5-year periods from 1926 through 2014. They also topped bonds in more than 74% of the rolling 20-year periods.
Still, some investors want to focus just on recent history: the market they've gone through.
So let's look at the past 20 years, which included the financial crisis of 2007-09 and the tech bubble bursting in 2000.
If you invested $5,000 a year in SPDR S&P 500 ETF (ARCA:SPY), tracking the big-cap benchmark, by June 30 you would have amassed more than $250,000.
If you invested in a typical intermediate-term bond fund like $6.8 billion Fidelity Investment Grade Bond Fund , your balance would be nearly $181,000.
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