Retirement might still be far away for you, but there is no reason why you can’t plan for the future today. In fact, the better that you prepare yourself now for retirement, the easier it will be for you to bounce back from financial storms that can cause havoc with investment plans.
Self-employed workers don’t have the benefit of investing in employer-sponsored retirement plans. Still, there are options for them, and business owners also can not get into these plans unless they set them up for their workers, too.
Whatever you choose to do to build a retirement fund, what’s most recommended is diversification, i.e. don’t have all your eggs in one basket. Therefore don’t rely on one retirement investment plan.
Consider all the options from traditional retirement accounts to other options for building a nest egg including investing in a business, and creating a property portfolio.
IPOs and Limited Investment Opportunities
If you are an employee, you can invest in other businesses. Become a shareholder of an existing listed enterprise or invest in IPOs. An IPO is a privately owned business that goes public – offering shares to the public, via the stock exchange under the SEC (Security and Exchange Commission) requirements.
Companies that have had success but need to raise a lot of capital for further growth take this path of going public. Also, the existing shareholders see this action as an opportunity to cash in exchanging full control and ownership for a payout.
Public offerings can bring in a lot of cash, but they can also lead to the original owner losing much of their control. However, you decide to leverage things, know that pre-IPOs are some of the best retirement investment opportunities available.
These pre-IPO investment opportunities aren’t always well known unless you have the right types of connections. Search for limited investment opportunities such as IPOs and watch your retirement plan come together.
Investing in a Company at Seed Level
Companies now more than ever are looking outside traditional banking options to secure funding. Television shows like ‘Shark Tank’ underscore how common it is now for investors and businesses alike to work together directly, enabling both parties to enjoy the benefits of their partnership sooner. So, what you should do is look to invest in a company and secure yourself a large percentage of ownership.
If a company needs $100,000 for start-up and manufacturing costs, you should become anywhere from 25 to 75 percent owner. Remember that investing and even becoming part-owner in a company doesn’t mean that you are responsible for running it.
Instead, investors who arrange business partnerships such as they only stay around long enough to recover their investments and walk away with a profit.
When it comes to your retirement investment plan, you should be attempting to go slow and steady.
Don’t be keen to just throw cash at any old investment opportunity that comes around. Consider your options and spread out your investments. No one knows what is going to happen in the financial world today let alone tomorrow, so this plan will help you to keep your investments protected.
Make sure you’re also taking the traditional path with an IRA (Individual Retirement Account). There are self-directed IRAs and the ‘traditional IRA’. There is no age limit for making contributions in these plans. However, you will need to start making redraws from 72 years of age.
There’s also the 401(k) plan where contributions are taken at source, i.e. from your wage before tax. For workers, the 401(k) is a compulsory savings plan, and it’s attractive as the employee contribution can be matched by their employer.
There are other traditional retirement accounts too, like an annuity plan, the 457(b) plan, Employee Stock Ownership Plan (ESOP). Make sure you do your research and get your retirement investments plans working for you to enjoy later on in life.