Self Directed Retirement Investing- Equity Trust's Answer to Retiree Complaints - Retirement | Financial Buzz

Self Directed Retirement Investing- Equity Trust’s Answer to Retiree Complaints

The Equity Trust Company has a simple yet effective answer to the many complaints that retirees and near- retirees often have about their retirement savings accounts. It puts the reins in their hands with self directed retirement investing options.  Given that the company specializes in these products and is the country’s top provider of self directed 401(k) plans and IRAs, the solution does not come as a surprise.

Self Directed Plans let investors go with what they know

One of the biggest advantages with self directed 401(k) accounts or IRAs is that the individual account holder has greater control over where his/ her money is being invested. The account holder can ensure that he/ she is saving for the future in investments that are familiar to him/ her. Since he/ she has a certain degree of expertise or knowledge about the investment or the investment arena targeted by the retirement planning account, he/ she feels a whole lot more confident about it. It is possible for the individual to distribute the savings over several different areas that he/ she has familiarity with, to get the benefit of diversification without undertaking more risk.

Guidelines for anxiety-free retirement savings

Equity Trust Company has also given several guidelines for beginner retirement planners. The very first one addresses a most contentious and vociferously contested aspect of retirement planning- how big should your emergency fund be? According to Equity Trust, individuals need to have about six months wages set aside in an emergency fund. The fund will help the individual get through strained- finance- phases and keep him/ her from drawing from retirement accounts or giving up on saving for retirement.

How much to save for retirement?

Another critical retirement planning question that is commonly discussed is: how much should I save for retirement? Equity Trust believes that saving 10% of the total income should be just about right for retirement. However, this 10% rule works only when the individual has started saving early. For those who have waited until their forties or fifties to start planning for retirement this may actually turn out to be a case of too little, too late.

As on date, the current savings rate is just over 3%. Clearly, Americans need to take retirement savings a whole lot more seriously if they truly want a financially secure, anxiety-free retired life.