Sixty-five, a birthday many of us look forward to, became the full retirement age all the way back in the 1930s. By 1940, those who turned 65 could expect to live another 12.7 or 14.7 years (males and females, respectively). By the 90s, those averages had increased to 15.3 to 19.6, but the retirement age hadn’t changed. Since many of us today can expect to live 30 or even 40 years after retirement, we need quite a nest egg!

If you are approaching retirement age and are less prepared than you would like to be, you may need to delay retirement. But no matter your age, there are things you can do now to make sure you can retire comfortably. Here are four tips I’ve found that can help anyone make better investment decisions for a better retirement:

Don’t politicize your portfolio

When we’re afraid, we tend to do the wrong thing, and that’s especially true of money matters. In my 50 years in finance, I’ve seen this over and over again through the political cycle. People are afraid the stock market will crash if a certain candidate is elected, so they make rash financial decisions that end up hurting them.

My advice: Do not politicize your portfolio. Whether a Republican or Democrat is in office, it doesn’t make as much of a difference to your investment portfolio as you think. In fact, when you look at the S&P 500 over the past 100 years, the sitting president has not made that much of a difference in how the stock market performed during his term.

No matter what is happening in politics, you should choose an investment strategy and consider sticking to it through all political changes. While the stock market does ebb and flow, things are rarely as bad as people think they will be.

Start in your 20s

When you’re in your 20s, retirement seems a whole world away. But the reality is that the quality of your retirement can be determined in your 20s. And if you’re not putting enough away and investing for growth, you probably won’t have enough money by the time you are ready to retire.

Let’s say you’re 25 and you want to be a millionaire 40 years from now. If you invest $5,000 a year and earn a reasonable amount of interest – we’ll say 7% – you will reach your goal with approximately $1,000,000 in your account. (This is a hypothetical example for illustrative purposes only. Actual results will vary. No specific investments were used in this example, and it does not take into account deduction of fees or taxes.)

But if you wait until you’re 35, you will have to invest $10,000 a year to get the same results. And if you wait until you’re 45, you’ll have to invest $20,000 each year. But if you don’t invest anything until 55, it becomes impossible to earn enough interest by the time you’re 65. If you invested $40,000 each year, you would have to earn in excess of 12 percent interest, which just won’t happen.

Try out Nerd Wallet’s Compound Interest Calculator to run other scenarios and see how much you’ll need to put away each year to be ready for retirement.

Invest, don’t speculate

It’s important to find the balance between investing too aggressively and not aggressively enough. If you’re too aggressive, that can turn into speculating rather than investing. Speculating is akin to gambling, and I’ve seen many well-meaning young Utahns fall into this trap.

On the other hand, if you’re not investing aggressively enough or not investing at all, you could outlive your money. Refraining from investing feels like you’re avoiding risk, but taking the chance that you could outlive your money is also risky!

Wise investing is based on weighing risk and return. There are lots of tools to invest for both growth and safety, such as simple diversification, which is designed to protect you with sheer numbers. When your investment portfolio is managed properly, there is less risk of losing your money.

Don’t overwatch your portfolio

When people first start investing, there’s a tendency to watch their portfolio closely, checking in daily to see how it’s doing. They a-re then tempted to sell as soon as they see a peak in price, which often ends up being a mistake.

As the saying goes, time in the markets is better than timing the markets, and research backs this up. A study by Charles Schwab Company found that “between 1926 and 2011, a 20-year holding period never produced a negative result.”

In another study, Charles Schwab Company found that “The best action that a long-term investor can take … is to determine how much exposure to the stock market is appropriate for your goals and risk tolerance and then consider investing as soon as possible, regardless of the current level of the stock market.”

People that participate in 401(k) plans are typically successful if they pick investments that fit their needs and goals and then leave them alone. They often end up with a better income after they retire than before!

In summary, don’t politicize your portfolio, start investing young, don’t speculate and avoid constantly looking at your portfolio. No matter how long you have until retirement, you can make changes today that will help get you in a better financial position. If you would like personalized advice, reach out to Merrill Financial Associates to get started creating a strategy that fits your needs and goals.

This article is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or recommendation to buy or sell any investment product. Merrill Financial Associates is located at 3549 North University Avenue, Suite 175, Provo, UT 84604 and can be reached at 801.356.7100. Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

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