10 Retirement Pitfalls, Pitfall #9: Investing Too Conservatively

Yahoo has a list of 10 retirement pitfalls and I'm going to list and comment on them all. Here's today's pitfall:

Investing too conservatively: Investing too conservatively in your retirement fund means that you will not grow it adequately to meet your needs when you retire. You need to take into account that over time, inflation will take part of the purchasing power away from your retirement fund. As you get closer to retirement, you can make your investments more conservative, but in the early years you want to make sure that you are not investing too conservatively to yield the gains you need for retirement.

For me, investing means stocks and, in particular, index funds. I have a long time horizon and am not afraid to take some risks. If anything, I may be a bit too aggressive as I'm almost completely in stocks and have little in bonds.

For more thoughts on investing, see these posts:

• Portfolio Rebalancing Boosts Returns

• Key to Investing: Start Early

• The Greatest Enemy of a Good Investment Plan

Click here to read part 10 of this series.

Click here to read part 1 of this series.

Comments

[broknowrchlatr]

I don't think you can really be too risky in the first few years of investing. After that investing in index funds with a large percentage of your savings can be the best way to go for a long time.

Savings that is too conservative makes me cringe. My parents have a $40k account that earns less than .25%. They refuse to do an online savings account. I tried to explain that they are losing due to inflation to no avail.

[Double-G (G²)]

So, curious....

I'm seeking to begin investing in the future with the money GOD HAS ENTRUSTED me with (seeing that it's not really MY MONEY) and I was wondering how to practicaly go about it.

I work a job where I get payed $10 an hour for a total of 3 hours a night, 5 days a week....and I also work another job where I get paid $8 dollars an hour working 3-4 hours 5 days a week as well. If I have a paycheck of about $360 a month (or at least every 3 weeks), how much should I be saving (add to that I wish to be a generous giver with it and tithe as well....)

Love to hear feedback. Blessings....