If you are like most of us, you’re not rich, a trust fund baby, or independently wealthy; therefore, you need to plan for your retirement by saving for it from the time you start working. Invest all your money saved (preferably every month) in the available mutual funds and your 401K or IRA ETFs. Review the investments periodically with your financial advisor to ensure the investment fits your retirement strategy. Please make sure they are vetted and ask for credentials. Once You reach retirement age, feel comfortable retiring, and have saved enough money to afford, you need to invest your money to generate monthly income for you and your spouse.
This interest or dividend income automatically gets reinvested into your brokerage account monthly or quarterly. These days, when technology is readily available and at your fingertips, you can use your computer to access your brokerage and bank accounts, review investments, track both growth and income, and set up a monthly electronic transfer of money to your checking account to pay your monthly bills, afford vacations, indulge your grandchildren, and live on. Review your investments with your financial advisor annually and make changes based on your investment strategy.
Make sure you invest long-term, and don’t buy and sell investments based on the market’s short-term swings. Chasing the market’s ups and downs is a way to lose money. Most brokerage houses, such as Merrill Lynch, Fidelity, Schwab, Ameritrade, etc., can set up this automatic transfer in your brokerage, IRA, or 401K accounts to whichever bank has your checking account. You need to file forms at your local brokerage office or online. You need to do this with all your retirement accounts, such as your 401K, pension plans, Profit-sharing plans, IRAs, Roth IRAs, 403 B’s, Social Security, and any other pension plans you have. No matter where the accounts are, the bank or brokerage house can set up a direct deposit to your checking account each month or when needed. This cash will ensure you have enough money in your checking account when needed.
You need to monitor your investments to ensure they are performing as expected. If the investment strategy, industry, or market changes, you need to adjust your investments as appropriate. Consult with an investment advisor or financial planner to ensure you do everything right for your investments and family. Finally, as things change in your assets, you need to keep an eye on the cash flow and ensure enough cash is coming in to satisfy your monthly needs and that you have enough money in a cash or savings account in your brokerage account to cover the monthly cash transfer.
If you have any questions, consult your financial advisor or brokerage house.