If we are in a Low-Growth World – long term retirement savings becomes more important.

One common belief is that “I will catch up later” and that a savvy investment will pay off handsomely and make up for any lost time in long term savings.

But what if we are in a Low-Growth World?  In a recent article by Neil Irwin in the New York Times: “One central fact about the global economy lurks just beneath the year’s remarkable headline:  Economic growth in advanced nations has been weaker for longer than it has been in the life time of most people on earth”.

So without awesome short term earnings it becomes more important to have the steady build up through regular payroll contributions that take advantage of cost averaging and a lifetime of small but compounded gains on your account. In a slow growth environment building a balance in a retirement plan become even more critical.

It is nice to dream of home runs but most of us are going to succeed on regularly hitting singles to first base.  If we are projected to live long lives, we need to have a long build up of the assets needed to secure our later years.

 

We recently set up a 403(b) plan for a local non-proft — even people who work for non-profits can benefit from saving in an employer sponsored retirement plan.

We’re in a Low-Growth World. How Did We Get Here? TheUpshot/Economic Trends/New York Times/Neil Irwin August 6, 2016

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