| How to Plan for Retirement? |
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michaelK
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| How to Plan for Retirement? |
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Hi Guys,
I am 32 years old. I don't have any retirement plan. I thinking about Planning for Retirement. Can anyone suggest me how to plan for retirement?
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Fri Aug 05, 2011 6:52 am |
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kate032
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The first thing involves saving money. How you invest that money depends upon a lot of factors. Some employers have a retirement plan called a 401(k), where your retirement payments are automatically deducted from your paycheck. The great news is that many employers will match up to a certain amount of what you put in!
Another option is an IRA (Independent Retirement Account). You can put up to $5,000 a year in it.
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Fri Aug 05, 2011 12:40 pm |
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littleroc02us
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Your only 32, so that's a good thing. You still have 30-35 years to invest. Like it was said before you can start off with a 401k at your workplace where they match your contributions. Also, the Roth IRA is a wonderful tool because your able to max it out each year at 5k. If you continue to do this for 35 years you will have easily a couple of million making 9-10% with the index funds that I use like The Total Stock Market Index Fund.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Fri Aug 05, 2011 1:26 pm |
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artwest
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In my opinion, the first thing you should do is pay off all of your debts (except your mortgage).
If your employer has a 401k plan and offers a match, invest in that up to the match. Then begin saving in ROTH IRA's. You should save a minimum of 10% of your gross salary.
When you retire you should be COMPLETELY debt free and have a fully funded emergency fund which is 3-6 months of expenses.
The good news is that at age 32, you are young enough that you can completely debt free, have a fully funded emergency fund and have $500,000-$1,000,000 or more in your IRA's and 401k's by age 62.
Please check out my articles at:
http://artwest.hubpages.com/
and
http://www.helium.com/users/442409/show_articles
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Fri Aug 05, 2011 3:59 pm |
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oldguy
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quote:
When you retire you should be COMPLETELY debt free and have a fully funded emergency fund which is 3-6 months of expenses.
Hmmm - seems like you are mixing "advice for the young" with "advice for retirees"?
3 -6 months? At age 62, most people need to plan for 30 years without a job - my plan is 'in perpetuity', ieI expect my income account to keep growing thur-out my lifetime.
And as for debt free - I have a mortgage on one house that lasts until I am age 94.
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Tue Aug 09, 2011 2:10 pm |
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artwest
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Sorry to hear that you are in so much debt oldguy.
I would much rather be completely debt free, have $10,000-$20,000 in an Emergency Fund and have $1,000,000 or more invested in solid growth Mutual Funds.
Please check out my articles at:
http://artwest.hubpages.com/
and
http://www.helium.com/users/442409/show_articles
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Tue Aug 09, 2011 2:24 pm |
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oldguy
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quote:
I would much rather be completely debt free, have $10,000-$20,000 in an Emergency Fund and have $1,000,000 or more invested in solid growth Mutual Funds.
Doesn't seem like you've considereed risk evaluation, risk management, and capital growth methods? You've apparently settled for a small EF, a $1M mutual fund, and no debt. And that's an OK goal.
But if you want a $%M or $10M Net Worth, you need to consider some wealth-building tools. Remember, most of us are given about 30 years to apply enough risk to outpace inflation and build wealth. After age 55 you need to mitigate risk and start into wealth preservation - that means investing in products that are designed to match inflation - savings accounts, CDs, MMFs.
Actually, I doubt that the average wage earner will get your $1M w/o using some risk - it would require >$25,000/yr for 30 yrs if invested in CDs that pay a real return of about 0%. A more likely method to earn $1M would be to invest $5000/yr in 11%/yr products, most families can do that.
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Tue Aug 09, 2011 4:12 pm |
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artwest
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Investing in CD's for long term growth is not a good plan. A good long term product that averages 10-12% growth is Mutual Funds. Most families can do this and over 30 years have anywhere from $500,000 to several million dollars, depending on how much they invest.
If you want a larger net worth, simply get out of debt sooner and invest the money your were paying on your debt into Mutual Funds. It's a pretty simple and effective method.[/quote]
Please check out my articles at:
http://artwest.hubpages.com/
and
http://www.helium.com/users/442409/show_articles
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Wed Aug 10, 2011 3:13 pm |
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oldguy
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quote:
If you want a larger net worth, simply get out of debt sooner and invest the money your were paying on your debt into Mutual Funds
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Again - you need to go thru the math for yourself, that is not an optimal way to become wealthy. Yes, it is a low risk way to build a nice savings account - but wealth requires some risk. And an understanding of how to measure risk.
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Wed Aug 10, 2011 4:15 pm |
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kate032
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Artwest, you're not really understanding what oldguy said. He agrees that for a person many decades from retirement, that mutual funds are part of a wealth-building strategy. However, imagine if you were retired today and all of your money was in the stock market. It would be enough to cause a heart attack.
Although debt is very unwise for many people, it also can be used as a wealth-building tool, which is what oldguy is doing. That method is not advisable for all people, but for someone who has done his homework, it is very much a viable method. The key is that you generally have to know what you're doing.
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Thu Aug 11, 2011 3:37 am |
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Alden01
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Start saving money from now and opt an retirement plan where u can put your money and then u should make the investment in continuation so that u wont have any kind financial problem later.
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Thu Aug 11, 2011 1:35 pm |
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oldguy
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quote:
I am 32 years old. I don't have any retirement plan.
To answer the question - for the next 30 yrs, have a fixed amount auto-deposited in 11%/yr accounts (I use an SP500 index fund). For most of us, disciplined steady incremental (monthly) investing is the recipe to wealth. Emphasis on disciplined.
$5000/yr = $1,100,000, $10,000/yr = $2,200,000, and so on. So you can pick your familly wealth target from that.
The common account types are 401k, Roth IRA, and Taxable. Your choice isn't so important, $2.2M is $2.2M no matter what the tax status of the money is. Each of the 3 account types has its own tax advantage - but that isn't cast in stone, the Tax Code changes often. (Over the past 55 yrs, my tax rate has been anywhere from 10% to 50%, capital gains have been from 15% to 28%). I used all three account types - that way I wouldn't find myself 100% in the wrong account at age 65. 
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Thu Aug 11, 2011 2:18 pm |
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keshavmish
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Planning for your retirement is one of the most important things that you can do. You need to start planning early to ensure that once you do retire you have enough funds to last you through the rest of your life. You need to plan for unexpected expenses, any possible illnesses or emergencies that may occur and any changes in the economy. Having a SMSF (Self Managed Super Fund) is one way of making sure you are prepared for your retirement.
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Wed Aug 17, 2011 1:01 pm |
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