Why 2020 Was the Year I Finally Started Investing in My Retirement

It took a global pandemic and extreme financial strain to motivate me to start my first retirement investment. Here's why I finally began investing in my future—and how you can too.

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2020 was a precarious financial year for anyone—but I felt hit especially hard as a nomadic freelance writer who specializes in covering travel. I've been freelancing full-time since graduating with my journalism degree, and the only work life I've ever known is one of 1099s. I have never had a 401(k). After all, it's always been hard to predict how much I might make month to month, or in a given year—and estimating my quarterly taxes as a self-employed person is an annual shot in the dark. Little did I know it would take a global pandemic and extreme financial strain to motivate me to start my first retirement investment. Here's why I finally began investing in my future—and how you can too.

I went through most of my 20s resigned to the fact that I'd be living more like a pauper than a prince—though I'd be rich in life experiences, right? I thought financial advisors and "wealth managers" were for the wealthy—trust fund kids and tech moguls. But the pandemic—and all of the career and financial uncertainty it brought with it—made me realize the importance of long-term planning and investing. I've socked money away over the years, but never with any concerted goal, and I never felt confident enough to invest in the stock market. It all seemed so volatile and risky.

Without an employer to match my retirement savings, I started putting money as a teenager into a Roth IRA with Vanguard. But I stuck with bonds and the most conservative investments, because the idea of losing my hard-earned money (like what happened when the stock market abruptly crashed in March 2020) seemed scary and unfair. I worked five jobs while in college to ensure that I graduated without any debt, and I have always been good at saving, despite never having a six-figure income like many of my friends.

I love my job, and honestly don't think that I'll ever want to retire. But finally learning more about the power of compound interest with long-term investing—plus facing the mortality of humanity during this past year—was a much-needed reality check for me. As a freelancer, I don't have a company looking out for me; I need to rely on myself and be financially prepared for an unpredictable future.

Toward the end of 2020, I learned about Farther Finance, a financial advisor firm with a minimum of $100,000—as opposed to $1 million like many prestigious financial advisors that focus on high-net-worth clients. Yes, that's still a lot, but it was an attainable figure for me; I'd just barely reached that threshold with my lifelong Roth IRA savings with Vanguard, and it seemed like it might be time to make a move.

The advisor I spoke with at Farther took time to understand me and my rather untraditional lifestyle and goals. I'm not sure that I ever want to buy a house, and my idea of the American dream doesn't involve two kids and a white picket fence. Before I put any money in this company's hands, however, I had three separate video conversations with my new financial advisor. He was laid-back and friendly—never pressuring me, but rather helping me understand what my options were.

When I did transfer my Roth IRA from savings to investing, I felt confident and comfortable with my decision. After all, I had saved up so much money over the years, but I wasn't investing it properly to help it grow. It was time.

Since I hopefully won't need to draw on my retirement savings for several decades, Farther set me up with a long-term growth plan that includes a more aggressive investment strategy. I'm more comfortable with that type of approach now than when I started saving for retirement, because I trust that my advisor is regularly tweaking and managing my investments for me.

Now, in just five months, I've already made several thousand dollars on my investments. The estimated value of my portfolio is forecast to double if I make it to 95 years old—and that would be without me investing any additional money from now on (which is not my plan; I do plan to keep contributing). There's an option to set up regular withdrawals from my checking account, but with my less-than-predictable income, we decided that it would make more sense for me to put away however much I felt comfortable saving when I had a good month, or a good quarter.

I like being able to easily check on my savings and create separate buckets of money for concrete goals, like my first international vacation after the pandemic. I try not to check on my portfolio too often, though, because with a volatile market, it's constantly moving up and down. I don't want to worry myself with day-to-day changes when I'm in it for the long run.

Of course, Farther's annual cost of 0.80 percent of assets under management is more expensive than that of robo-advisors—which range from .25-.6 percent. But it's less expensive than other firms with personal advisors, which usually charge 1.5-2 percent. For me as a novice investor with a high net worth, the personalization is worth it for me and gives me added security and peace of mind.

Vanguard also offers personal advisor services for an annual cost of 0.30 percent of assets under management, requiring a $50,000 minimum, which may be a better investment choice for many. Charles Schwab also uses a hybrid model for Schwab Intelligent Portfolios Premium, combining robo-advice with personal guidance from a certified financial planner with a $25,000 minimum. The company charges a one-time planning fee of $300 and a $30 monthly advisory fee after that, which ends up being more expensive than Vanguard the first year if you have less than $220,000 invested. The best platform will vary for each person, and there are quite a few additional robo-advisor platforms, such as Wealthfront, Betterment, and M1 Finance, that all charge low rates.

The bottom line? Regardless of which platform or app or financial advisor you choose, it's important to start saving as soon as you can. And don't just save; invest your money, too, in the best way that allows it to grow.

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