Americans’ perspectives on investing and retirement have undergone significant changes as a result of the economic upheaval. According to the Principal Financial Well-Being Index, “nearly three-fourths of employees (72 percent) and almost three out of five retirees (56 percent) agree they are very concerned about their long-term financial future.”
To address this concern, The Financial Services Roundtable created “11 things to know about investing in 2011,” a common-sense guide to help American’s make the most of their long-term investment decisions and retirement planning.
“Everyone wants financial security. But many people would benefit from some basic guidelines to help them take the initiative,” said Steve Bartlett, President and CEO of the Financial Services Roundtable. “The ‘11 for ‘11’ represents common-sense approaches and time-tested guidelines for people to consider as they map out their retirement goals or structure their post-retirement investments.”

Everyone wants financial security. But only those who act and are willing to make a few sacrifices now will likely achieve it. Below are 11 tips to help you reach your financial goals by investing.

1. Just do it. Most Americans cannot secure their retirement through savings mechanisms alone—particularly given how inflation will undermine them. Decide to invest your savings—make your money work for you—and start right away.

2. Start early. Research shows that putting aside even a little bit of money as soon as possible, and steadily adding to it (even a little bit at a time), can make a significant impact on your quality of life during retirement.

3. End late. One of the most effective ways to increase your retirement savings is to work—and continue investing—for a few more years.

4. Slow and steady is great. Slowly and steadily increasing is even better. The key to reaching your investment goals is to steadily increase the capital invested. And increasing that amount—even by 1-3% of your salary—will significantly improve your savings.

5. Don’t leave money on the table. If your employer offers retirement saving matching (such as through a 401k), take it! That’s free money that can greatly increase your post-retirement “income.”

6. An ounce of information is worth a lot of money. In this age of the Internet, there’s an abundance of free information about saving, investing, and money management available to you. You can also go to the library, take a class, or sit down with a financial planner. Becoming knowledgeable about your options and developing a clear strategy are keys to smart investing. It is also often a good idea to speak with a qualified financial planner.

7. Read—and understand—the “fine print.” It’s your money. Make sure you know what you’re doing with it and what the risks are. Protecting your hard-earned money is worth a few minutes of reading statements or disclosures, and asking enough questions to know what you’re getting into.

8. Identify your risk tolerance. Higher returns generally come with higher risks; so you must evaluate your willingness to put your assets at greater risk against your desire for higher returns.  Consider getting some financial advice about the right risk level for your age and situation.

9. Understand where you are in the lifecycle. A single 20-something with 50 working years ahead of her can be saving less and tolerating more risk than a 50-something with only 20 more years of work ahead. Where in the spectrum are you?

10. Know what you need. A survey by EBRI found that only 46 percent of Americans had estimated how much money they would need to retire—and 14 percent of those had guessed. It is wise to look at some estimates of longevity for your age and gender. Particularly for women, it may be far longer than you imagine. This longevity issue has serious implications for investment planning and is an increasing concern for the population.

11. Start with a goal in mind. Thinking about why you are investing—to buy a house, to send the kids to college, or for your own retirement—will not only help to motivate you, but should also give you a better sense of how much you need and when you need it.