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I’m 26 and planning on my retirement plan?
By Tom Dunn | October 17, 2007
lovelyc asked:
I’m 26 y/o and being exposed to senior health care field, i am wondering what is the best way to save money for your retirement/old age needs?
I don’t know anything about stocks or mutual funds…any reference on that will be appreciated.
Bessie
I’m 26 y/o and being exposed to senior health care field, i am wondering what is the best way to save money for your retirement/old age needs?
I don’t know anything about stocks or mutual funds…any reference on that will be appreciated.
Bessie
Topics: retirement planning |
October 19th, 2007 at 10:07 am
Match your company’s 401(k), then get a Roth IRA.
October 19th, 2007 at 11:01 pm
Read, learn and invest.
Buy low, buy high, buy buy buy.
Your time horizon is several decades so don’t be spooked by the daily carnage on wall street; best to buy when panic is in the streets and things are on sale anyway. Who wants to buy high and sell low?
Web sites to frequent:
If you buy only one book:
Time is your friend, and patience your ally.
Good luck
October 22nd, 2007 at 4:39 pm
I would recommend about 15% of your income should go towards retirement. Start with the 401K and take it up to your company’s match. Then fully fund a Roth IRA. If that doesn’t take up 15%, finish it off with the 401K.
October 23rd, 2007 at 9:36 pm
Congratulations on being forward-thinking and planning for your retirement while you are still young! Your foresight will make it much easier to have a comfortable retirement.
If you have a 401k plan available at work, definitely take advantage of that. Usually the company will partially match your contributions, so that’s like giving yourself a raise. Also, you don’t have to pay current income tax on money you contribute to the 401k and it grows tax-deferred until you withdraw it during retirement.
As for what to invest the 401k money in, for someone like you with many years until retirement, you want to choose stocks. They will gyrate up and down in the short term (e.g. today), but in the long run, they give you the best growth. Small company stocks historically do better than large company stocks and “value” stocks do better than “growth” stocks. So if your 401k has a “small company value” fund in it, choose that one.
After you’ve funded your 401k, put money in a Roth IRA ($4000 max per year). I recommend opening an account with a discount brokerage firm like Ameritrade, E*Trade, Scottrade, etc. Buy an exchange traded fund (ETF), which is essentially a basket of many stocks that you can buy as one single stock. I think a small-cap ETF (e.g. ticker symbol IWM) or a mid-cap ETF (e.g. ticker symbol MDY) are a good choice for what to buy.
Please feel free to e-mail me with any questions about brokerage accounts, ETFs, etc.
October 25th, 2007 at 4:16 am
For retirement advice, try
As for investing, you’ll find good material at
Good luck