Investing for the Future

Is $8,000 an adequate balance for retirement, my initial analysis is yes? With prudent financial planning and sound lucrative investments, you could potentially experience a significant increase by the time you are ready to retire. Granted however if you only have $8,000 in saving with an interest rate of only 3.5% that will not be enough especially since combined they bring in $5,000 a month. 

My mother always told me that should have at least six months of your living expenses saved in case of emergency, and I highly doubt that $8,000 will be enough to cover your living expenses for four months let alone six or more. When it comes to investing in CD’s you must first understand what they are and what some of the potential risks may be. CD’s or Certificates of Deposit can be defined as savings accounts with a set maturity date and limited access to account funds until the maturity date is reached. 

There are several advantages and disadvantages to CD’s some of the advantages are that they provide an excellent short- to medium-term investment (typically from three months to seven years) for investors who prefer little to no risk. Also CD’s offer a higher rate of return than traditional money market accounts. Finally Most CD’s are FDIC insured meaning their funds will be covered up to $100,000. Some Major disadvantages of CD’s are that Investors can redeem bank-issued CDs prior to maturity. However, you could be charged an early withdrawal penalty. These penalties are set by each bank and differ nationwide and often times are not worth accessing your funds early.