Investing for Major Financial Goals

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Investing without a plan is like driving across the country without a map or GPS – you’ll likely get to a destination, but it may not be where you intended to go.

Setting goals for major financial investments is beneficial to your future – whether you’re preparing for retirement, your child’s college education or another major life event. The sooner you start investing toward your financial goals, the closer you will be to achieving them.

Where do you start?

Follow three steps to help you determine where and when you need to invest for your future:

  1. Define your future. What are you trying to achieve? Where do you see yourself in one, five or even 15 years? If you’re married, discuss your goals together to make sure you’re on the same page. Be as specific as you can. For example, instead of saying, “I want to retire soon,” say, “I want to retire in 15 years.”
  2. Write down your goals. Make a list of short-term (less than five years to plan), mid-term (between five and 15 years to plan) and long-term goals (more than 15 years to plan). Again, be specific so you’ll know where, when and how much you’ll need to invest.
  3. Work with a trusted financial advisor. Consult with a professional financial advisor to help you determine where, when and how much you’ll need to invest to achieve your goals. Talk to him or her about your risk tolerance. Together you can create an investment plan that meets your defined future.

Just remember, there is no guarantee that any investment strategy will achieve all your financial goals, and all investments have some risk. But, with a plan in hand, you can prepare better for your financial future.

Let’s take a look at some specific strategies people take when investing for major financial goals – specifically, saving for retirement, saving for college and saving for something significant (like starting a new business or buying a new home).

Investing for retirement

Without an investment plan in place, you may not retire the way you want – or when you want. Consider the following as you plan for retirement:

  • Know when you want to retire (be specific). Whether you retire five years or 20 years from now, it’s important you start saving right away. For example, if you start saving for retirement at age 25, you’ll be able to compound your interest and see greater savings as time progresses.
  • Decide if tax-free retirement options will benefit you. Should you take advantage of your company’s 401(k) or open a Roth or Traditional IRA? What makes sense for your circumstances?
  • Consider how inflation will affect your retirement savings. Remember that the higher the cost of living, the lower your rate of return on investment dollars will be.

Investing for college

If you plan to return to college, or if you want to have funds available to help your child further his or her education, you need to start planning today. With college costs continuing to rise, getting an early start and making the most of your savings could have a great impact on reducing or even eliminating any student loan debt. Consider the following questions as you review your investment options available for college expenses:

  • What colleges are on my child’s (or my) list, and how much do they cost?
  • How will my investments affect my eligibility for financial aid?
  • What tax advantages does each college savings option offer?
  • What scholarship opportunities and state-sponsored tuition programs are available to help offset estimated college expenses?
  • Should I save more for my retirement than for my child’s college education?

Investing for a large purchase

  • What is your time frame? When do you plan to make the purchase?
  • Can you make the purchase with cash or will you need a loan? If you need a loan, what is your credit score, and how will that affect your rate and/or down payment?
  • What investment options are available to maximize short-term savings and possibly provide tax benefits as well?

Like most people, you probably don’t have a lot of time to invest your money. That’s where consulting with a trusted advisor who can help you put together an investment plan and strategy may be a great benefit.

To find an Infinex financial advisor with BancorpSouth Wealth Management, click here, or call 601.592.4900 to learn more.

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. BancorpSouth Wealth Management is a trade name of the bank. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.