September 6, 2006

Published in Wake Forest, NC

            How long do you plan to keep working? And when you retire, will you retire for good, or will you still work in some capacity? These are important questions, and the answers can have a big impact on your savings and investment strategies.

            As you think about your retirement plans, you might be surprised at the expectations of many of your fellow workers. Some 67 percent of employees anticipate working for pay during retirement, according to the 2006 Retirement Confidence Survey, issued by the Employee Benefit Research Institute. And many of these people undoubtedly think they will have to work.

            How can you avoid becoming a working retiree? For one thing, you can work at being a good investor - and you can make sure your investments are also working hard.

            What sort of work does it take to become a good investor? Here are some steps to consider:

            Work to identify your goals. It is important to identify and quantify your goals. For example, if your biggest goal is achieving a comfortable retirement, think about when you want to retire, where you want to live and what sort of lifestyle you desire. Then, try to determine how much this type of retirement will cost. The answers will help you chart your investment course.

            Work to achieve investment discipline. Whenever the market is down, you may be tempted to take timeouts from investing. But the best investors are the ones who continually invest, no matter what market conditions look like.

            Work with a professional. By working with a qualified financial professional – someone who knows your situation and has the skills and tools necessary to navigate the investment world – you can create an investment strategy that's right for you.

            Keep your investments working hard. To help attain your financial goals, you need to work at investing, but you also need your investments to work hard, too. That means you may not want to overload your portfolio with fixed-income vehicles, such as Treasury securities and certificates of deposit (CDs), if you are seeking growth. While these investments typically offer stability of principal and regular interest checks, they can be "lazy" in the sense that they may not always keep up with inflation or provide the growth potential you are seeking to achieve your goals.

            To get those growth opportunities, include high-quality stocks in your diversified portfolio. Historically, stocks have outworked and outperformed all other asset classes and outpaced inflation. Of course, stock prices will always fluctuate, so there is the potential that you can lose some or all of your money, and, as you've probably heard, past performance does not guarantee future results. But by investing in good companies and holding your stocks for the long term, you may be able to increase your chances for growth. (Keep in mind that the government guarantees payment of principal and interest on Treasury securities, and that CDs carry FDIC insurance. Stocks do not carry either of these benefits.)

            Hard work can pay off. No matter what your plans are for retirement, you can help your cause by working hard at investing and using investments that work hard for you.