Casey Ryan,
Vice President, Senior Portfolio Manager

Accumulating Wealth

While creating a consistent paycheck in retirement may be a scary proposition for many, most aren’t nearly as concerned with creating a consistent savings habit in their working years. Your working years are the time to do the “heavy lifting.” At Howe & Rusling, our portfolio managers use their collective experience to guide clients preparing for retirement, whether retirement looms in 5 years or 35 years. Depending on client risk characteristics and time frame, younger clients tend to take a more aggressive approach in regards to asset allocation. This allocation becomes more conservative as retirement nears.

  • Start saving as early as possible. The power of compounding is very powerful (small contributions add up quickly over time).
  • Compounding example: Someone saving $10,000 per year starting at age 25 will end up with $1.2mm at age 65 (assuming 5% average return) but someone who starts saving at age 35 will have to save $18,000 per year to accumulate the same amount of wealth at retirement (assuming 5% average return).
  • Create a plan to figure out optimal savings amount, and then track/revisit plan periodically to monitor progress.
  • Take advantage of employee matching programs.
  • Consider opening a Roth IRA for tax diversification.
  • Avoid large debt burdens (such as high interest credit cards).
  • Avoid borrowing retirement funds (especially in a job change…).
  • Take a long-term view (avoid constant trading, changes in asset allocation due to market fluctuations).
  • Consider an emergency fund.
  • Understand basic investment concepts in order to grasp investment risk tolerance.