I am 51 years old and have nothing for retirement. I put 100.00 a week in my savings and have about $10k now. What can i do for more interest?

Asked by victor piediscalzo

8 Answers

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Answered by Tracy Scott Burke, CFP®, ChFC® in Harrisburg, PA
Victor,

Thanks for your question. Some type of a tax-deferred retirement account would likely be best in your situation in lieu of bank savings. If you have access to a 401(k) at work, that may be your best option. If not, an IRA (Individual Retirement Account) at a low-cost provider such as Vanguard may be a good choice. Make sure that the investment option that choose in the retirement account is comfortable for your risk tolerance. Most 401(k)s (as well as a Vanguard IRA) have "easy option" choices that you match up your risk tolerance or anticipated retirement age and the fund invests accordingly. The advantage of using a retirement account is that you can deduct the contribution for federal income tax purposes. The disadvantage is that you won't want to access the money prior to retirement or otherwise face possible penalties. You also won't be able to take the $10k from bank savings and put directly into the 401(k) - you'd have to contribute via payroll deductions. As for an IRA, you can contribute up to $6,500 per year. Definitely direct the $100/wk savings into either a 401(k) or IRA. All the best. | 05.30.14 @ 14:23
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Willard R. Brumbaugh, LUTCF in Victorville, CA — Tax deferral is not the same thing as tax savings. Qualified plans merely provide tax deferral. As for stock funds, there is no guarantee that you will make money in securities. There are experts that predict the baby boomers will drive the market down due to Required Minimum distributions that come into play in 2016. | 07.29.15 @ 00:50
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
Answered by Dan Crimmins, Financial Adviser in Woodcliff Lake, NJ
Victor - Congratulations on starting to save for your retirement. Your desire for more interest than you are getting from the savings account is understandable and will be necessary for retirement. However, you need to appreciate that the quest for more interest and growth comes with the "cost" of volatility. By that I mean the account balance will be expected to decrease at times... on the way to its increased growth. As long as you understand that and are comfortable with that, then you can start to "invest" some money instead of "saving" money.

First, make sure that you have enough money in case of an emergency saved in that savings account. Then start to invest in a diversified fund at a company such iShares or Vanguard. This investment should be broadly diversified and include stocks and bonds. The ETF may be a good choice as your can set-up a recurring monthly purchases without incurring the recurring transaction cost (called commission free). Look to TD Ameritrade or Fidelity to establish this account and provide insight on investment options that fit this objective.

Most importantly, keep investing even when the market has a downturn. This will allow you to buy shares at a discount. In fact try to increase your savings during these times if possible. Your behavior during these downturns which will occur will be the key to your success. Think long term (your retirement years) and do not focus on the short term market conditions. Read my blog for encouragement to focus on the long term - www.RootsofWealth.com. | 05.30.14 @ 14:43
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
Answered by Arin Moradian, Financial Adviser in Glendale, CA
ROTH IRA , its tax deferred and tax free.
Saving account pays less than 1%, inflation is average 2.4% . You are losing money.

Have 3-6 months of expenses in savings, the rest in a retirement plan. | 03.04.15 @ 00:27
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Willard R. Brumbaugh, LUTCF in Victorville, CA — Roth gains are tax-deferred, not the deposits. | 07.29.15 @ 00:51
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
Answered by Francisco Ramirez, Insurance Agent in Round Lake Park, IL
You can achieve tax-deferral through the use of annuity products. Take a look at fixed or indexed deferred annuities which should give you greater cash accumulation than your bank savings account. Guaranteed by the issuing insurance company, it's considered a safe place to put money into. Look online for the NAIC-Buyers-Guide-to-Fixed-Deferred-Annuities.pdf (not sure if we can post links here). | 03.04.15 @ 17:34
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
Answered by Michael Keeler, CFP®, CLTC in Las Vegas, NV
Definitely look into the Roth IRA. You can contribute up to $6500 in 2015 to this account. One nice feature of the Roth IRA is you can always take the principal out penalty-free before 59 1/2. If you put in $6500 and it grows to $7000, you can take out your original $6500 in case of an emergency. The growth has to stay until you reach age 59 1/2 or you will pay a penalty. | 03.06.15 @ 00:01
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
Answered by Paul Carag, Financial Adviser in Renton, WA
To add to Arin's comments, make sure that whatever you invest in is earning you more than inflation or you're simply losing money instead of 'earning' on it. Something that gives you a guaranteed rate of return is always best. Make sure you talk to a financial adviser who does the math including taxes, fees, and inflation over the long-term and doesn't just try to sell you a product. | 07.08.15 @ 19:14
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
Answered by Dave Bradley, Investment Manager (Financial Advisor) in North Charleston, SC
Hey Victor.
The secret to getting ahead is getting started --Mark Twain

There are two ways to get you more $$ in your retirement account
1) Cash flows
2) Growth

Both can get you a great interest rate. What is your MARR (Minimally Acceptable Rate of Return)?

Keep in mind that with cash flow investing, if you reinvest the cash back into the investment (rather than spending it), it will also grow at your MARR.

Here are some examples:
10K @ 15%/yr will double to 20k in ~4.8 yrs. There are some great passive investments that can do this for you. We use F &C's 9Floors & Ceilings). There are also many others. With only 10K, the fees will not move your needle much. we call this wealth redistribution. Our focus is on wealth creation.

It's not what you make, It's what you keep that determines your lifestyle.

Send me a message and together we can look deeper into what your number is. No obligation.

| 03.17.16 @ 20:27
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
Answered by Larry Gilmore, Insurance Agent in Marysville, WA
To gain more interest you must be willing to take on more risk. The hard part in your situation is you may not have a fall back in case you make a mistake investment. You are working with a short time table and may need to look at taking greater risk in your choices.
| 06.29.16 @ 00:30
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:39
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