is a great start to solving that problem. He founded his investment advisory firm in 2018 with the intent of helping people get better returns and lower fees.
Ideally, how much you're saving should depend on your retirement needs, though the tried-and-true allocation ratio is to commit at least 10% of your income towards retirement, Baker said. But that doesn't mean all 10% needs to be in the same fund. Fund managers aren't incentivized to inform you of those extra costs because it's how they earn their pay, he said. But they could really cost you. fees could range anywhere from 0.25% to 1% of your investment annually. The average mutual fund for an institutional share class has a 0.7% fee, he noted. That may seem small, but as these fees compound over decades they could shave six figures off of your earnings, Baker warned. have much lower fees.
If you'll need cash within two to three years for big purchases or expenses, Baker recommends that you start building those cash reserves or grab some short-term Treasury bills. Historically, the stock market goes through boom and bust cycles, and you want to be prepared for those even during retirement years. You don't want to be in a position where you need to sell your stocks during a downturn, Baker said. It doesn't help that COVID has added a new layer of uncertainty to the stock market outside of those cycles, he noted.
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