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Simple Retirement Investing for Nesting

Investing for “retirement” shouldn’t be so difficult. Think simply – feed your Nest Egg.

The Nest Egg is your base retirement stash of cash. You only crack it open once a year, after it has grown at least 10%. GROWTH stocks and funds will quickly grow your nest egg over time, but they also have variable risk of losing value. The final amount of money you can cash out at retirement by selling the stocks and funds all depends on the timing.


When you are ready to leave your full-time career at age 60, hopefully your company IRA/401k nest egg will be at the high crest of the growth wave, with the maximum amount of value earned. Then you will need to switch that money to your own personal Individual Retirement Account (IRA). Then invest the individual IRA money in INCOME stocks and funds. At slower growth but much less risk, every year your income investments should return an average of 10% increase on your nest egg from value and dividends. You pay yourself that 10% increase income every year, and the value of the nest egg should stay relatively unchanged.


Hopefully you have an IRA/401k retirement fund offered by your employer. Do you understand where you are investing in that fund? Are you building your nest egg? Here are some simple concepts to help.

Retirement investing with a cell phone and a laptop computer
Investing is easier than ever before, but somehow it got more complex.

How much of your money will you invest and will the company match it?

There are 2 kinds of IRAs: Roth and Traditional. The Roth is preferred because your money is taken from your paycheck after taxes. Any gains on the after-tax money you invest – gains from value, dividends, and interest – earned over the years will be TAX FREE. With a Traditional IRA, your money is taken from your paycheck before taxes. This reduces your tax bill today, but the earnings over the years are taxed when you retire and withdraw the money. That tax bill will be much larger because your account will grow much larger.


Invest as much as you possibly can in the company Roth IRA/401k. To encourage investing, your company may match your investment with additional money of its own. Want a raise? Invest in the company 401k! Companies will match a percentage of your salary that you invest. For example, the company will match 5% of your salary, and you make $50,000 a year. That’s a $2,500 raise if you put $2,500 in the 401k plan. Now you have $5,000 invested a year and if it grows an average of 10% a year, you’ll have another $500. But you only put in $2,500. That’s a good size raise!

What choices do you have to invest your money?

The employer’s 401k retirement plan will offer at least these 3 types of investment funds for you to put money into:


  1. Target Date Fund – investment that is a group of different company stocks with the strategy to balance growth and risk according to your retirement at a certain future date (usually in increments of 3-5 years, if we are in 2024 then the target dates might be 2027, 2030, 2035, etc.) – moves slow and difficult to change or buy/sell

  2. Mutual Fund – investment that is a group of different company stocks with specific strategy and PEOPLE buy/sell the stocks in it – it moves slower, buy/sell 2-3 days to clear

  3. Exchange Traded Fund (ETF) – investment that is a group of company stocks with a specific strategy and COMPUTERS buy/sell the stocks in it – it moves faster, buy/sell the same day

What is your nest egg retirement strategy?

Build your core retirement account money using Growth and Value stock funds – when you retire, live off the annual increase using Income and Dividend stock funds (they should average 10% annual growth). What do these investment funds mean?


Growth – companies that are growing and stock prices rising – aggressive risk

  • Domestic vs. International segments – International is riskier

  • Index – funds that mimic a trading market index (S&P 500, 1000, Dow, NASDAQ, etc.)

  • Industries – Tech, Retail, Energy, Manufacturing, Travel, Pharma, Utilities, etc.)

  • Large Cap, Mid Cap, Small Cap – how big the companies are – generally Large Cap companies are less risk but slow growth; Mid Cap more risky and prices change but more growth potential to Large; Small Cap most risky, prices change a lot, huge swings, big potential to move to Mid or to fail bankrupt or be bought out

Value – companies that are growing slowly but their stock prices are low so they are a good “value”, they should be priced higher based on their success – semi aggressive risk

Income – companies that are growing slowly, use this to live off nest egg increase – moderate risk

Dividend – companies and ETFs that pay monthly, quarterly, or annual dividends to you from their profits (yes - they pay you to own their stock), this is guaranteed increase, ideally 7% annually – low moderate risk


For example, today you are retiring from your career job and you have $500,000 in the company 401k retirement plan that you grew from Growth and Value mutual funds. You will need to “rollover” that money to your personal IRA at a financial company or bank. This means the company 401k funds will be sold and the cash will go to your new personal IRA account. When the “rollover” is complete you have a Nest Egg of $500,000 in cash that you should invest in Income and Dividend funds that annually produce an average of 10% return or $50,000 per year to pay yourself. That may not be enough for your current lifestyle, but it might be for a retirement lifestyle. And hopefully you will have Social Security to supplement that income. You may even find a part-time fun job to supplement your income.

What's the catch to retirement investing?


Here's the key – the Nest Egg reproduction works much much better if you are as debt-free as possible and have 6-12 months of savings in the bank. If your investments are just paying off debt when you retire, your Nest Egg will shrink faster than you expect. It' won't keep up with the 10% earnings your income requires. Your present self is stealing from your future self. And future self won't like it.


As a personal financial trainer, coach and counselor, I cannot tell you specifically which mutual funds and stocks to invest in – that is the job of a licensed and certified financial advisor. However, I can help you with the basics and set you up to have money to invest. You shouldn’t invest if your debt is unmanageable and your savings are broke. That said, don’t leave your raise on the table! Get that extra money and make it work for you and your future. If you want to learn more about personal financial coaching, book a Discovery Call and we’ll chat!

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