MoneyLife

Investing for Retirement – How To Get Started

By Anna Yen
investing for retirement

Investing for retirement can seem like a daunting task. But it’s really not much different than setting aside money in your savings account. 

Whether you opt for an employer-sponsored account, an individual retirement account (IRA), or a taxable account, it’s possible to reach your retirement goals with a little dedication and know-how. 

Set your retirement goals

Before you can start investing, it helps to have an idea of what you want to do when you retire, and even in the decades before. Don’t worry – you don’t have to have all the answers yet. But by thinking about the answers to these questions, your goals (and retirement accounts) can grow with you. Start by asking yourself:

  • How soon do you plan to retire?
  • Do you plan to work beyond retirement?   
  • When will you take out Social Security?
  • Where will you live?
  • Will you own or rent your home?
  • What monthly expenses do you foresee?
  • Do you expect to pay medical, home, utility, insurance, or other bills? 
  • Do you have a spouse, children, or other beneficiaries to consider?

The answers to these questions will help you determine how much you need to contribute each month to meet your retirement goal. You might want to use a retirement calculator to come up with concrete figures to use as a starting point. 

Design your retirement plan

The next step in investing for retirement is deciding on a suitable retirement plan. Simply put, this is the strategy you use to allocate money toward investments, savings, and other interest-bearing accounts to fund your future retirement. 

You’ll also want to consider questions such as:

  • Does your employer offer retirement plans? 
  • Do they match contributions?
  • Do you want to open an individual retirement account?
  • Do you already have tax-advantaged accounts? 
  • Should you open a taxable account to capitalize on investment opportunities? 
  • Do you have a financial safety net to fall back on?
  • Are you planning to buy a car or house?
  • Will you need to fund your child’s education soon?
  • Are there any large purchases you expect to make between now and retirement?

The end goal of answering these questions is to confidently plan for and fund your retirement lifestyle when the time comes without having to rely on Social Security as your sole source of income. 

Choose a suitable retirement account

Once you have a plan in place, it’s time to actually start investing for retirement. But to do that, you’ll need an investment account or two.

First off, decide if you want to or are able to open an employer-sponsored plan like a 401(k). If you can’t, or if they don’t offer contribution matching, you might also want to look into traditional or Roth IRAs to enjoy tax-advantaged savings. 

If you’re a small business owner or self-employed contractor, SEP IRAs, solo 401(k)s, solo Roth 401(k)s, or SIMPLE IRAs may be able to meet your needs a lot better. 

But these accounts often come with limitations, such as early withdrawal penalties and contribution caps. As such, you might also consider looking beyond these typical retirement accounts and focus on taxable investment accounts. 

Look into individual investment accounts

Of course, like all financial decisions, you shouldn’t just pick the first stock brokerage that comes up in your Google search. You’ll need to do some research and consider your situation, lest you pay an arm and a leg in trading fees. 

Ask yourself the following questions:

  • Is the broker a robo-advisor, full-service operation, or both?
  • What educational and supportive resources are available to you?
  • Is there a minimum deposit required in order to open an account?
  • Does the broker charge trading fees? 
  • How much? 
  • When do they occur?
  • Can you choose from different investments?
  • Are there stocks, bonds, ETFs, or other assets available to you?
  • Is automated investing available? 
  • Is there a cost to transfer your account to an IRA or taxable brokerage account?

Consider a managed investment account from MoneyLion!

If you’re tired of buzzing around the internet looking for the perfect investment account, we might have just the one you’re looking for! Take the stress out of investing for retirement, your new home, or your next vacation with a fully-managed investment account courtesy of MoneyLion. 

There are no trading fees or account minimums required before you can get started. Plus, MoneyLion even offers personalized portfolios and auto-investing options. You can also take advantage of thematic investing to put your money where your values are. 

Whether you’re seeking a conservative portfolio, aggressive risks that yield high returns, or funds that put your money to work for the greater good, we’ve got something for every investor.  

Start investing for retirement 

After you’ve selected your broker and picked an account that works for you, you’re well on your way to finally investing for retirement. The key here is to start and don’t stop. After all, having the perfect plan in place means nothing if you don’t act on it. 

Additionally, you’ll want to avoid giving in to the temptation to treat yourself to a vacation, a day at the spa, or those rockin’ kicks if it means giving up your investment contribution for the month. Staying the course pays off in the long run, and buying items you don’t really need now will only decrease your overall retirement funds later on in life.

To minimize the likelihood of getting off track, make sure you design a budget that lets you live within your means. You should also revise your portfolio and retirement plan as needed to account for factors like buying a house, getting a raise at work, or even changing careers.  

Prepare for the unexpected with your own financial safety net

Perhaps the most important part of all is that you’ll want to keep in mind that sometimes, life just happens. And when it does, it’s okay to stop or scale back on investing for retirement until you can get back on track. 

But if you want to minimize the chances of getting knocked off course by unexpected expenses like flat tires or leaky water heaters, a financial safety net can provide you with the peace of mind that you need. 

And with MoneyLion’s Safety Net one-stop financial solution, you can be sure to get ahead before you fall behind. We offer a full range of tools to make sure you can save your money wisely and invest it to your heart’s content. 

Here are some of the features you can expect from a MoneyLion membership:

  • Early direct deposit with any RoarMoneySM account
  • Access to up to $1,000 in 0% APR InstacashSM
  • Fully-managed portfolios and auto-investing
  • Round-up opportunities to invest your spare change
  • And so much more!
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