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The key to good retirement strategy is to realize that there is no get-rich-quick trick to put you where you need to be without any time or effort. Personal finance is a long-term project, and retirement savings starts from your first paycheck and ends when you actually retire. There is no way around this: any reliable and trustworthy set of investments will take years to pay off, and the longer you save, the more you make. In this post, we will discuss some key elements of any good retirement strategy for long-term returns.


Taxes
Every American has access to at least one kind of tax-advantaged account- the Individual Retirement Account. This is a special kind of investment account. Any money in here is taxed either when you contribute it to the account or when you withdraw money from the account- regular brokerage accounts are taxed both times. Some Americans will also have 401(k) accounts through their employers. In both cases, the tax status depends on whether it is a traditional or Roth-style account.


Diversification
Diversifying your investments is a very important way to reduce risk. By spreading your investments across several different sectors, you ensure that if some of your holdings lose value, the others are less likely to be affected. For example, you can have investments in the stock market and then also invest in a real estate partnership like the Jakob Pek Fund. That's a good way to build in exposure to different parts of the economy so that one bad shock to, say, the stock market won't tank your whole portfolio.


Patience
It's tempting to check the value of your investments frequently, but retirement savings is so long term that the day to day value of your holdings does not mean much. If you pay too close attention to the daily swings, you will be tempted to buy and see frequently to try to make more money. This rarely works out, because very few people in the world can make money consistently from stock trading, and each trade costs a chunk of money. Instead, just let the money accumulate and worry about other things.

When you are saving for retirement, just relax and don't try to game the system. As long as you have a balanced and diverse portfolio with any tax savings you can access, you will enjoy good long-term returns.

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