Worried about your retirement savings? Do these 3 things today

Looking to retire but not sure if your savings will suffice? You’re far from alone. Fortunately, there are likely plenty of wealth building opportunities on the ASX right now.

Investing on the Aussie stock market can provide one with both capital gains and passive income. Not to mention, the market can be a useful tool to hedge against inflation.

Contrary to some people’s beliefs, building retirement wealth on the ASX doesn’t need to be complicated.

Here are the three steps I’d take if I was aiming to bolster my retirement funds by investing on the stock market.

3 steps to investing in the ASX for retirement

Make a plan for retirement

Do you aspire to eat fresh seafood on the Italian coast each summer during retirement? You might need more savings than someone who sees themselves retiring to a modest cottage in the countryside.

That’s why it’s important to make a retirement plan that considers your personal financial needs, as well as the rising cost of living, and the impacts of inflation.

If you’re still concerned about your savings after making a retirement plan, it might be worth considering investing in the ASX to build wealth.

Start today

The sooner one begins to invest, the more time one can enjoy watching their returns compound. That being said, it’s never too late to start.

Further, building wealth on the stock market doesn’t need to demand thousands of dollars each month.

Smaller, regular investments in an exchange-traded fund (ETF) can provide many of the same benefits as building a portfolio of individual shares.

On the other hand, anyone wishing to invest directly in a company’s shares (when they’re trading for a good price, of course) can do so.

Consider the market’s risks and rewards

Finding the ASX investing method that best suits you and your retirement isn’t always easy. That’s where weighing up the risks and rewards can be helpful.

An investor with a high-risk tolerance might be drawn to riskier investments such as growth shares. Meanwhile, someone with a lower risk tolerance might lean towards buying units of an ETF.

The latter generally comes with built-in diversification – an important risk reduction tool. On the other hand, an investor building a portfolio of individual stocks would be wise to intentionally diversify their holdings.

Either way, it’s important to consider that any investment – no matter how considered – can result in a loss.