| Too soon we get old, and too late we get smart is the | | | | say "I'll be on the golf course!" Most retirement |
| old Yiddish proverb. This applies to most people as | | | | calculators are driven by an investing rule called the |
| they do retirement planning. Retirement ideas range | | | | Rule of 72 - take 72 and divide it by your rate of |
| from imagining yourself living in a life of luxury, playing | | | | return in points (for example, getting 6% on a savings |
| golf, taking 9 month vacations, and enjoying life, down | | | | account or CD) and that will tell you how many years |
| to living in a retirement community where your basic | | | | it takes for your investment to double. In this case, 72 |
| needs are taken care of. Failing to plan for your | | | | divided by 6 is 12, meaning that sitting an investment |
| retirement can have very negative consequences on | | | | down in a 6% account means it will double in 12 years. |
| the quality of your retired life. | | | | Remember that slow and steady contributions win the |
| To do proper retirement financial planning, you should | | | | day; you can't rush this later in life. Start early, invest |
| start early - that's the "too late smart" part of the | | | | everything you can afford to, and know that your |
| proverb. You're getting older every day - are you | | | | money is working for you in the long term. If you're |
| getting smarter? Fortunately, there are retirement | | | | eligible for a 401(k) program, you should take it - it |
| books that can help you with this. One of the most | | | | benefits you in multiple ways, from employee matching |
| important is "401(k) Basics" by Motley Fool publishing. It | | | | (which doubles your investment) to being take out of |
| will steer you into how to make the most of a | | | | your paycheck before taxes (which is fundamentally |
| company 401(k) plan, while taking an unsentimental | | | | giving you a 20-35% increase in the net investment |
| retirement view - telling you that there is no fast road | | | | from doing it in post-tax income) to tax deferral on the |
| to riches, only steady, regular savings and investing will | | | | interest it accrues. A 401(k) is by far and away the |
| help ensure you against retirement losses. | | | | best retirement investment vehicle possible. |
| Your retirement benefits should contain a mix of | | | | One thing you should not count on is Social Security; |
| growth funds early on, wealth preservation funds and | | | | due to changing demographics, we're going to be |
| income generation tools as you age - this can be | | | | disbursing more from Social Security than it takes in in |
| found online through a number of retirement | | | | about 5 to 10 years, and the fund will literally run out at |
| calculators, and will help you plan the day when you | | | | the current rate of contributions in thirty years. |
| can send your company your retirement letters and | | | | Presume that you're on your own and plan accordingly. |