Creating An Investment For Your Retirement
If you are not a baby boomer in your late 60's
, then you should probably be concerned about saving for your retirement. It is almost a sure thing that there will be little Social Security for you, even though you have paid thousands of dollars into it. You can probably consider it a hidden tax. The problem is that too many people are living only for today and are not concerned about tomorrow. There is an Aseops Fable known as The Grasshopper and the Ant. The ant put away for the winter while the grasshopper played. When winter came, the grasshopper had nothing and died. It makes a person wonder what people are going to expect during their retirement, if they do not have a savings plan.
While you are young, you should seriously consider what you are going to do for your retirement. If you start when you are in your twenties or thirties, you are more likely going to be able to save a significant amount for your retirement. If you wait until your forties or fifties, then you might as well forget it. You should definitely start and save something but you will probably run out of time. You may be working into your late seventies.
If your work happens to have a 401(k) plan, then plan on putting the maximum amount that you can put in it to take advantage of your employers match. If you have excess funds after that, you should probably consider opening up a Roth IRA. A Roth IRA allows you to put aside money after tax. The advantage to this retirement vehicle is that you are not taxed on the growth of the fund. You are merely taxed on the investment funds.
If you happen to have an IRA, then you should consider converting it to a ROTH IRA. Tax rates are very favorable right now, in 2010, and now is the time to do the conversion. The year 2011 may be too late. Also the government has placed favorable laws into effect for those who convert their IRA in 2010 to a Roth. This is from the position of those living in the United States. If you happen to live in other countries, then you will probably want to check on what their laws are concerning retirement.
If you still have additional funds to invest, after investing in the above retirement plans, then you should consider carefully how to invest those funds for the best possible return. Having a long-term outlook with your investing strategy will serve you better. Trying for the home run will usually just make you lose your money in ill advised investments. You should also stay away from commodities. They have the potential to make money, but you can also lose with them.
Take some time and write out your retirement goals. How much money do you think you will need? How are you going to get there? What kind of funds will you invest in? Having these written goals will help to keep you focused on your objective. Consulting with a financial advisor may also be a worthwhile exercise. He can help you to formulate your plans and which investment vehicles to use.
by: Garth Wheeler
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