What is the best way for someone to save for retirement for the first time?
Answers | 2
The first thing to remember about saving for retirement is that it should be something done regularly and consistently. Even if you can only save a small amount each month that will add up quickly if you do it consistently.
There are a lot of options that might be used but the two that make the most sense for someone getting started are the 401k and the IRA (Individual Retirement Plan). The 401k is usually something a company you work for would offer and you can contribute a portion of your salary ( you choose the amount) and then there are various investment options available.
If your company doesn't have a 401k then the IRA is a good option. There are traditional and Roth IRA. In the traditional the money you contribute is deductible from your taxes and while it is in the plan it builds up tax free. On retirement you can take it out but it will be taxable.
With the Roth IRA you can't deduct the money you contribute but when you retire it comes to you tax free. For younger people the Roth makes a lot of sense.
With any of the plans you can start small and contribute more as you earn more but they all offer you a good way to save for retirement.
Many people are saving for the first time. The "best" thing to consider in retirement (before, during, and after), or in any investment is Rule #1-Don't lose money.
There is a lot of noise about tax savings, put more $$ in early, employer match for your $$. etc., - All sage suggestions and one sided.
Digging deeper. let's look at the other side of the equation- What are you getting in return? What is your ROI? For all those $$ you are putting in, how much in $$ are you getting out and will they last through your retirement lifetime? Bottom line from your perspective is, what's in your Owner's Equity pocket?
Some things to consider:
1. Keep a laser focus on your financial needs both now and in the future
2. Enjoy your lifestyle and demand that your hard earned $$ work just as hard for you as you have for those $$
3. Determine your MARR- Minimum Acceptable Rate of Return
4. Understand where you are Financially
5. Understand where you need to be Financially/
6. Never sop asking questions about your financial well being until you are satisfied with the answers.
7. In Finance, as in business, there are Owners and Customers. Be the Owner of your Financial business.
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It's not what you make, It's what you keep that determines our lifestyle