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Maximizing investments for your retirement

The length of time you have before retirement — your investment “time horizon’’ — is an important consideration when determining your asset allocation strategy, or the mix of stocks, bonds and money market/stable value investments you select.

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All of these investment vehicles are available in your Costco 401(k) retirement plan from T. Rowe Price, whether you choose to create your own portfolio or select a pre-assembled portfolio, such as a target date fund or asset allocation fund.

Your goals, financial circumstances and risk tolerance level may change as you go from entering the workforce to retirement and beyond.

Finding a balance, decade by decade

Your 20s and 30s: Now’s the time to start saving and investing through your workplace retirement plan. And the sooner you enroll and start saving, the better. Here’s why: When you invest through the plan, any earnings are put right back into your account. The longer your money stays invested, the more it can potentially earn through compounding.

Because retirement is several decades away, consider a higher allocation to stocks. Your investments should have time to ride out any ups and downs in the market.

Your 40s: Even if you’re just getting started, you still have 20 to 25 years to build up your savings. So make the most of these years.

Historically, stocks provide better long-term growth potential when compared with bonds and money market/stable value investments.

Your 50s and over: As retirement approaches, you may want to consider cutting down on stock allocations, which are more vulnerable to ups and downs in the market.

Before passing up too much growth potential, though, remember inflation and the power it could have to erode your money. Consider keeping a portion of your portfolio in stocks to help stay ahead of inflation over the 20 to 30 years you may need your nest egg to last.

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Learn the basics

LEARN THE BASICS

Investing terms 101

Don’t know your money market funds from your mutual funds? We’ve got you covered. Start your financial education with this handy glossary of investment terms. (Pro tip: Bookmark this page so you can refer back to it later!)

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Bonds and bond funds
These are also known as fixed-income securities, because the income they pay is fixed when the bond is sold. Bonds and bond funds invest in corporate or government debt obligations.

Commodities
These are physical commodities, such as an agricultural product (grains) or a natural resource (gold). A futures contract is an agreement to purchase or sell a commodity for delivery in the future.

Index funds
These funds invest in a particular stock market index, such as the S&P 500 or the Russell 2000. An index fund is managed passively and mirrors the performance of the designated stock or bond index.

Market-linked certificates of deposit (or structured CDs)
Returns are linked to the future performance of a market index, and may include stocks, bonds, foreign currency or other assets. These are designed for a long-term commitment (up to 20 years).

Money market funds
These are mutual funds that invest in short-term bonds. They usually pay better interest rates than a savings account but not as much as a certificate of deposit (CD).

Mutual funds
These invest in a variety of securities, which may include stocks, bonds, and money market securities. Costs and objectives vary.

Roth IRA
This is a personal savings plan for retirement where earnings that remain in the account are not taxed. Investments may include a variety of securities. Contributions are not tax deductible.

Stocks
Stocks represent a share of a company. As the company’s value rises or falls, so does the value of the stock. All Costco employees are eligible for the employee stock purchase plan, which allows you to purchase Costco stock through payroll deductions and eliminates brokerage fees through our partner, UBS Financial Services Inc.

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Decrease your stress to improve your heart health

Our mental health has a significant impact on our physical health. Chronic stress can be especially hard on our bodies and can lead to substantial health issues.

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If you are someone who experiences stress frequently, you could be at risk for:

Heart disease

Daily stress can lead to heart attacks. Those with Type A personalities have an extremely high risk of developing abnormal heart rhythms. And even the normal stress of everyday life can negatively affect people already prone to heart disease.

Stroke

People who are highly stressed, or even moderately stressed on a regular basis, have a significantly increased risk of having a fatal stroke.

High blood pressure

Stress hormones cause an immediate rise in blood pressure. While this may not create problems for everyone, chronic stress and hypertension is a deadly combination.

Lowered immunity

Stress hormones compromise a body’s immune system, making it more susceptible to the flu, colds and other infectious diseases.

Here’s the good news

There are steps you can take to decrease your stress and improve your heart health. Take control of your stress — and calm your body and mind — through:

  • Breathing techniques: Breathing slowly and deeply automatically relaxes the body.
  • Yoga: Slower exercises, such as yoga, help connect breath, movement and body control.
  • Meditation: Find a quiet place to be alone, wherever you are, and try to clear your mind. Get started with our guided meditation.
  • Stretching: Take time to stretch whenever you find yourself in a tense position.
  • Walking: Walk around the building instead of taking a coffee break. Or get up 15 minutes early and walk around the block before you leave for work.
  • Sleeping: Make sure you get just a little more sleep than you think you need during times of high stress. If you need help falling asleep, try taking non-habit-forming sleep aids like melatonin, unwinding with apps like Calm and Headspace, or listening to relaxing audiobooks. Download Costco’s free audiobook app for discounts on some of your favorite reads.
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LEARN THE BASICS

Why managing your time is so important

Time is a special resource because it takes time to accomplish anything. The way you manage time, like the way you manage your money, energy and other resources, plays a large part in determining what you can accomplish and the satisfaction you receive from everything you do.

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Some say time is the most valuable of all resources, because it is limited. Others think time is endless — that they can always complete tasks at another time. Most busy people have to plan carefully to meet all of their time demands. Jobs, schools and other commitments require you to be on time, even though you might prefer a more relaxed schedule.

Time itself is not the real problem: The key is how you use your time.

Think about time

Time is unique. It’s the only resource every person has in equal amounts: Everyone has 24 hours a day.

Time is perishable

You can’t really save time. You can “use it or lose it.” A problem with time as a resource is that you can’t borrow minutes from one day and use them the next day. Although time cannot be saved, you can use your time effectively through careful planning and action.

Time is a measure

When time is discussed, many people think first of the clock. Most developed countries tend to be a clock- and calendar-centered societies. Being on time for work, school and appointments, and for payments such as rent and bills, is a necessity for almost everyone today. In other cultures, time may be measured by the sun and the seasons.

Time has a monetary value

You’ve probably heard the saying, “Time is money.’’ It takes time to earn money. It takes time to develop new resources. It takes time to get the most for your shopping money. Sometimes you choose whether to “buy time’’ in the form of convenience foods or household repairs.

Time has other values

People look for “quality time’’ to spend with children and other family members. Everyone needs time for rest, leisure and personal renewal, as well as for friends, neighbors and the community. 

Time to get started 

Ready to take control of your time? Here are a few helpful time management tricks: 

  • Dedicate a particular time/day of the week to a particular chore. For example, do the household laundry on Thursday evening, so more of the weekend can be dedicated to relaxing. 
  • Help kids learn to manage their own time (and learn to navigate between activities) by setting a time limit for things like online gaming. Having them manage their own time will give you back some time, too! 
  • List out your weekly errands, and try to address them in one fell swoop on a day off.  
  • Big projects (like cleaning out the garage) are more doable when they’re broken up into blocks of time. Reward yourself after each effort. 
  • Compile your to-do list in priority order to ensure the most important tasks get accomplished first.
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Setting healthy boundaries

Creating healthy boundaries is another way to protect and strengthen our psychological health and, in turn, our physical health. We usually think of self-care as meditating, exercising or relaxing. However, while all these activities can contribute to self-care, they can only do so much if you do not practice creating healthy boundaries, as well. Healthy boundaries are what keep us from getting burnt out or overwhelmed. And they tell others what we find acceptable and unacceptable in their behavior toward us.

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There are several steps to setting up a healthy boundary, but one of the more difficult is identifying and knowing your limits. We often don’t know what our limits are until they’re violated — for example, you may not realize that lending your expertise to a friend is pushing your limits until they are asking for advice every single day.

The second piece you need to consider is how these types of boundaries apply with different people. It’s likely that your boundaries are not the same with a significant other as they are with an acquaintance. Within each of the above categories of people, you can have varying boundaries (for example, coworker vs. a boss), but starting with these categories will help you analyze how your boundaries change depending on who you interact with.

A great way to think about these boundaries is to examine times that you felt uncomfortable, angry, resentful or anxious with the people you interact with. That discomfort is telling you that some boundary was violated. Listen to it!

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3 ways to save money

Saving money is easy to talk about, but much more difficult in practice. Check out this video on three psychological tricks you can use to painlessly boost your financial well-being — and save more for the future in the process.

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Source: 3 psychological tricks to help you save money, TedX Talks, 2019.

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Ease muscle tension with this guided meditation

Self-care isn’t a luxury — it’s a necessity. So, while you’re finding ways to more effectively manage your time, make sure to also schedule time to recharge. A little “me time” doesn’t have to take long, but it’ll make major difference in your overall health. 

To get started, try this guided meditation from AbleTo. (Bonus: It’ll only take six minutes out of your day.)

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Have a little more time? Check out this video on how to reframe your thoughts.

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Believe you can and you’re halfway there.

Theodore Roosevelt

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How much is too much

Decoding alcohol misuse and addiction

When it comes to alcohol, how much is too much? Short answer: It’s different for everyone, and it’s based on gender, age, weight and what’s right for you. What we do know is that over consuming alcohol can lead to health risks like heart disease, cancer, a weakened immune system and mental health concerns. In fact, excessive drinking is responsible for 1 in 10 deaths among adults ages 20–64 years.¹

If you’re concerned you might be indulging a little too much, or you’re worried about the drinking habits of a loved one, check out these videos from experts on alcohol and substance misuse to learn more.

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Everything you think you know about addiction is wrong

New York Times bestselling author Johann Hari examines how our society responds to addiction ― and what we could all be doing better to support those who need it most. The short answer? Let them know they’re not alone.

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How I overcame alcoholism

Actress Claudia Christian shares her journey from social drinker to someone who struggles with alcohol use disorder. Here, she speaks about her decade-long journey to recovery, and the treatment that finally saved her life.

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Gray area drinking

Nutritionist and wellness expert Jolene Park discusses the concept of ‘‘gray area drinkers” (the people who are between those who have alcohol occasionally and those at rock bottom), and how that can affect someone’s mental and physical health.

(P.S. Concerned about your own alcohol intake? Check out this free online screening.)

Sources:

1Centers for Disease Control and Prevention

Everything you think you know about addiction is wrong, TEDx Talks, 2015

How I overcame alcoholism, TEDx Talks, 2016

Gray area drinking, TEDx Talks, 2017

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Substance misuse podcasts

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Podcasts to help understand substance misuse

Whether you’re working on your recovery or you have a family member struggling with substance misuse, tune in to these podcasts for addiction resources and support.

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Last Day

The first season of this investigative podcast explores the opioid crisis through the lens of one person’s last day of life. Hosted by author Stephanie Wittels Wachs, who lost her brother in 2015 to a heroin overdose, Last Day breaks down how addiction impacts our country today ― and the ways we can move forward.

The Addicted Mind

Looking to understand more about addiction treatment from a licensed therapist? The Addicted Mind covers the latest research on the subject, as well as how recovery differs from person to person.

My Child & Addiction

Think of this podcast as a support group for parents. Hosted by three fathers whose children are addicts, My Child & Addiction offers encouragement and support for families during the challenging journey of recovery.

Addiction Unlimited

Brought to you by a former addict turned recovery coach, Addiction Unlimited focuses on actionable steps to help you stay sober. Plus, you’ll hear from others about their real-world recovery experiences.