A New Horizon. As you begin to build a long-term financial plan, it's important to consider the obstacles that may stand in your way, as well as the potential advantages that could help bolster your efforts.
In this section we've compiled information on a variety of saving and investing principles.
Retirement Income Sources
Once upon a time, Americans could count on a pension and Social Security for a large portion of their retirement income. But with pensions disappearing1 and Social Security projected to stop paying benefits in full by 20342, personal savings and investments are becoming more important than ever in making a plan for retirement.
Amid this dramatic shift, another sea change was afoot: As seen in the accompanying graphic, "The Gap Between Life Expectancy and Retirement Ages," over the past half century the average life expectancy has increased significantly while the average retirement age has decreased.
In other words, more people are spending longer in retirement than ever before, while traditional sources of retirement income are disappearing. Given these new realities, it's becoming important that you develop a long-term financial plan that can take you to — and through — retirement without relying on outside income sources.
To help with your planning, explore the topics in the boxes below for an overview of some of the most prevalent saving and investing principles.
1Michael Molinsky, USA Today, "Disappearing Pensions hurt U.S. Economy as well as workers," April 23, 2016.
2Social Security and Medicare Board of Trustees, "Status of the Social Security and Medicare Programs: A Summary of the 2016 Annual Reports," 2016.
When it comes to investing for the long-term, the sooner you start, generally the better.
Dollar Cost Averaging
A systematic investing approach may help increase returns and keep emotions out of the equation.
Keeping your money at work can be a powerful growth strategy.
Understanding the options available to you is the first step toward educated investing.
Don't put all your eggs in one basket. Manage risk by strategically allocating your assets.
Be proactive to ensure your assets remain invested according to your long-term goals.