Investing – Saving for Retirement

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One of the dumbest things I hear from people is that they have little to no retirement savings. Most of these people (I will not name names) are under 35 years old and do not think that they will ever be old. One of the largest assets any college graduate with a job has the ability and upward potential to earn money. When a person is 70 years old, for the most part, that ability greatly diminishes. Unless you were (or are) a top C level employee (CEO, CFO, COO, etc.), your ability and desire to have an active career is questionable when you reach that age. What you should be worried about is what time you tee off and how to snag a free buffet at the casino.

Here are the steps to make this all possible:

For the sake of this argument, let's assume that you are an adult with a full time job.

The first thing you should do is take advantage of your company sponsored 401K and / or Profit Sharing plan. There are a lot of companies out there that match your contributions up to a certain percentage. Not contributing is throwing away free money.

What this means: Let's say your company matches your contributions up to 5%. If you contribute 5% of your salary to your 401K, your company will also throw in 5%. This is an automatic 100% return on your investment.

Some other notes about 401K plans:

Try to contribute as much as you can, and as early as you can. The largest factor to saving for retirement is time. More on this in a later post.
Do not chase 'hot' funds. An index fund or time target fund should do the trick. More on this in a later post.
If you are a public employee, a 403B plan is similar to a 401k plan.
Yes, it's true, but some employers do not offer any type of retirement plan. This kind of sucks, but is common with certain types of small to medium sized businesses. My next few investing posts will be on some other options like:

Roth IRA's

Regular IRA's

Other investments

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