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Learn the basics of investing so you can put your money to work for the future.

Investing for the future can support your long-term goals like saving for retirement or saving for college. It offers the potential to grow your money over time, outpace inflation, and build wealth through the power of compound interest. However, the potential benefits of investing come with a greater risk of loss. Before investing, it is important to prepare your finances and understand your options so you can make informed choices aligned with your current needs and future goals.

Before you Invest

Prepare Your Personal Finances

Maximize your potential success by securing your financial foundation with four steps:

  1. Create an emergency fund
    Set aside three to six months’ worth of living expenses in a separate account, like a savings or money market account, to cover unexpected expenses and reduce the likelihood that you’ll need to sell your investments at inopportune times.
  2. Manage your debt level
    Focus on reducing high interest debt since investing returns might not surpass the interest rates you’re paying.
  3. Create and follow a budget
    Track your cash flow to make more informed decisions on the dollars you can afford to invest.
  4. Have adequate insurance
    Protect your life, health, property, and loved ones through insurance to reduce the possibility that you’ll need to sell your investments to cover financial loss

Know the Investment Spectrum

While there are thousands of investments available, they can be grouped into four main asset classes:
cash , bonds , equities , and alternatives .

Investment spectrum spanning from lower risk/return to higher risk/return.

Investing for the Future

Shawn Lopez, a caregiver for his father, shares his experience of getting started with investing. Shawn highlights the financial challenges many caregivers face, including limited opportunity to participate in retirement plans and the impact on professional development, like future earnings potential. He provides tips on getting started and encourages caregivers to seek advice from financial experts.

Know Your Risk Tolerance and Time Horizon

Balance your needs and financial goals with your time horizon and risk tolerance:

Risk tolerance means how much potential loss you’re comfortable taking for a greater potential gain. It’s like a financial gut-check.

Your time horizon is when you expect to need to use your investments.

  • Short-term – Consider lower-risk investments to avoid potential loss because you’ll need to use investments sooner.
  • Long-term – May be more appropriate for higher-risk investments because there is more time to recover from potential loss with a greater potential gain.

Many websites offer free online questionnaires that can help you assess your risk tolerance. These tools can be helpful but proceed with caution. Sponsoring companies or individuals may be biased toward promoting and selling their own financial goods and services.

Investing for Retirement

Depending on your situation, retirement could be decades away or right around the corner. Balancing your role as a caregiver and planning for retirement isn’t easy. However, setting goals based on your age, health, and caregiving responsibilities now can help you build the future you hope for.

Adjusting Your Retirement

Caregiving requires a shift in planning for the future. Sharon Grassi, a caregiver for her son, shares her family’s journey of adjusting their career and retirement plans to accommodate her son’s needs. Despite the unexpected financial challenges of caregiving, Sharon shares her feelings of fulfillment and peace while anticipating their retirement.

Saving for retirement as a three-leg stool

Paying for Retirement

Your retirement can be funded in many ways, there is no perfect method or one-size-fits-all solution. The three most common streams of income for retirement are sometimes called the “three-legged stool.”

A government-administered program that provides retirement income to eligible individuals, and possibly their dependents, based on work history and earnings. Visit to see if you qualify, review your record, and estimate future benefits.

A monthly income for life offered by some employers, typically based on years of service, age, and earnings.

Save for retirement on your own by contributing to an Individual Retirement Account (IRA), employer-sponsored plan like a 401(k), or personal savings. Some employer plans offer matching contributions that can help you save even more.

Types of Retirement Accounts

Here’s some good news when it comes to investing for retirement: you may have access to several types of accounts throughout your life. The key to success is choosing the right account(s) for your situation.

  • Employer-Sponsored Plans
    401(k), 403(b), 457(b), and pension plans
  • Individual Retirement Accounts (IRAs)
    Traditional, Roth, and Spousal IRA options
  • Self-Employed Plans
    Simplified-Employee Pension (SEP), Solo 401(k), SIMPLE IRA

RetirementAs a caregiver, it may feel like you can care for your veteran or plan for retirement, but not both. Review the Saving for Retirement learning guide for additional tools and resources to make this important goal more manageable.

Investing in Yourself

For many caregivers, investing in yourself with a college education can be a real financial game-changer. It’s not just about personal growth, it’s about opening doors to better job and financial prospects down the road. Though a higher education comes with the potential for higher income, you have to tackle the challenge of paying for it.


Paying for College

Recent studies estimate the average cost of a 4-year degree at a public university to be approximately $100,000o including tuition, books, room and board, insurance, transportation and other fees. In reality, the true cost of college will vary from student to student and may be offset by grants or scholarships.

If you are a spouse or child caregiver, you may be eligible for educational benefits through the Department of Veterans Affairs (VA) GI Bill® program or the Survivors’ and Dependents’ Educational Assistance (DEA) program, also called Chapter 35.

For most caregivers, paying for college will require a combination of savings, scholarships, and student loans.

Check out the Paying for College guide to learn more and make a plan.

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