Retirement Investing

Frequently Asked Questions

1. QUESTION:
   What are the different reasons to open a general investing and/or a retirement investing account?
   On Vanguard it has a “General Investing” account and a “Retirement Investment” account. Obviously the latter is for IRAs, but what is the advantages and purpose of the general investing?

   • ANSWER:
     The main reasons are tax considerations.

     In a retirement account, depending on how you set up the account, either the contributions can be tax deductible (traditional IRA) or the withdrawals are tax free (Roth IRA).

     In a general investment account, depending on how long you hold on to the account, the earnings are either taxed as ordinary income (short-term) or taxed at the lower capital gains tax rate (long-term).

2. QUESTION:
   Retirement investing?
   I am in my mid 30′s and thinking seriously about putting 20% of my pay into 403b.
   Is this NOW ,after the crash to do or is it still shakey.
   Also just curios to how bad the crash was for most people.Say you put in ,000 in4years how much did it grow or did it even went negative(drop below actual investment of ,000)
   Lastly should i choose fidelity or T rowe price for 403b.

   • ANSWER:
     Unlike the “crap” answers prior to mine, this is for real. Regardless of how much you put away, and no matter what brokerage you decide on, the thing is to do it asap.
     The sooner you put money away, the better off you will be after you do retire. During the “crash” would have been the best time to invest. Reverse psychology is where you make money. When no one wants stocks, is when you buy.
     And yes, you need to invest in stocks, as you still have 30 years to go before retiring. Put most in stocks or stock funds, and some in bonds or bond funds.
     Also get a good broker to advise.

3. QUESTION:
   Would investing retirement money now be a good move?
   I know someone who is investing most of there retirement money now, and they’re about 52 with two teenaged kids. And they are splurging on the rest of it. I personally don’t think this is a very good idea, it might come to bite them in the butt later on, leaving them high and dry. Is this a good move to make, with the kind of economy we’re in? please give good and thorough answers.

   • ANSWER:
     Right now can be the best time to invest. The markets are down and when they go back up the gains will be significant.

4. QUESTION:
   New to retirement investing, how often should I rebalance my accounts?
   I have a 401(a) and a 457(b) thru my employer. The advisor my employer uses is always in a big hurry, acting like he doesn’t have time for such petty questions, and is a bit condescending on top of it all. Any suggestions from well informed, experienced investors or advisors will be greatly appreciated. I am 43, so I need to agressively invest what I can…about 10% of my income. Thanks.

   • ANSWER:
     Ugh! Your advisor needs to be kicked to the curb. In a situation such as your own, I would suggest actually speaking one-on-one with a Financial Advisor. The reason being is you are inquiring about some serious issues and given that this will dramatically affect the quality of your life in your later years, this is not something you want to make an wrong moves in. Most Financial Advisors worth their weight will provide you with an no-obligation first meeting in order to answer your questions and address your concerns regarding your situation. All-in-all, I realize this doesn’t give you specific advise, that is something you just can’t side-step. My parents put their faith and trust in 401(k)s and maxed out their contributions. Now they are within 15 years of retiring and scarcely have enough to even scrape by if they were to retire at 65. Its great you are approaching this now, rather than later, but this should be something brought up to a qualified, independent financial advisor.

5. QUESTION:
   How do I find a reputable tax advisor for investing and retirement questions?
   I have done the route of the big guys for investing but they always try and sell me goods I have no interest in, like plans for “future nursing home needs.” I just want someone who can look at what I have, the years til my retirement and help me figure my best options.

   • ANSWER:
     I hate companies like Edward Jones.
     They sell, sell, sell their products until a person is bone dry.

     Consider going through a discount brokerage like
     Fidelity Investments or
     Charles Schwab 800-435-4000

     Open up a ROTH, buy some cd’s and you’ll be fine.
     Some cd’s at Schwab are still paying 4% – they are long term cd’s.
     Stop getting scammed by people trying to sell you junk.
     Fidelity and Schwab have free advisors and can allocate your funds for you depending on your risk tollerance – free service.
     They can also tell you what kinds of accounts you need.

     I have never paid a dime in any fees.
     And they have never tried to sell me anything.
     /

6. QUESTION:
   How do you work this finance problem, regarding investing for retirement?
   Ross has decided that he wants to build enough retirement wealth that, if invested at 9 percent per year, will provide him with ,250 of monthly income for 32 years. To date, he has saved nothing, but he still has 23 years until he retires.

   Required:
   How much money does he need to contribute per month to reach his goal? (Do not round intermediate calculations and round your final answer to 2 decimal places. Omit the “$” sign in your response.)

   • ANSWER:
     Using the present value calculation.
     PV = C(1/r – 1/(r*(1+r)^n)
     where C = 4250, r=0.09/12, n=12*36
     You get PV = 534,513.29
     So ross needs 4,513.29 after 23 years

     Discounting 4,513.29 back at 9% per year using the formula PV = FV / ((1+r)^n) gives a new PV of ,970.96 which is the PV now. Where r=0.09/12, n=12*23

     Using the same formula PV = C(1/r – 1/(r*(1+r)^n) you solve C = 4 per month

     As for the decimal places, only academics care about those because assuming a 9% return every year for that long is very inaccurate anyway.

7. QUESTION:
   Help my friend for investing for retirement please?
   Ok,
   My friend already have 21 lacks and he earning average 2.5 lack per month in uk.He plans for retirement at the end of april and want to stay in india in small town.He oener of the house in india,
   and small business in india ,from indian business he earns Rs 25000/- per month that is extra from above,so can anybody help for proper investment please.He already invest in post office MIC and bank deposite from 21 lacks.
   Ok,
   My friend already have 21 lacks and he earning average 2.5 lack per month in uk.He plans for retirement at the end of april and want to stay in india in small town.He oener of the house in india,
   and small business in india ,from indian business he earns Rs 25000/- per month that is extra from above,so can anybody help for proper investment please.He already invest in post office MIC and bank deposite from 21 lacks.
   HOW TO INVEST PROPER?AND IS THAT ENOUGH MONEY FOR HUSBAND WIFE TWO CHILDREN AND PARENTS?

   • ANSWER:
     -Can invest an amount of rs.3lacksin post office. Rs. 3/-lacks is an amount per person. No TDS deduction . Monthly interest @ 8% available, which can be reinvested in Recurring deposit a/c. to earn the cumulative interest,
     -An anount can also be deposited in Banks, If the period is more than 5 years no TDS. is deducted, Interest Rate of about 9.5%is avilable in the leading Nationalised banks,
     -There are so many good co. dealing / offering Unit linked insurance plans. Equity increases and the Insurance(life) continues, Good returns. Income Tax benefit also.
     -Money can also be invested in purchasing land ,may agri. oor non agri. if properly purchased it must give the returns over a period of time. Liquidity is little,
     -Benefits of Demat a/c. can also be taken by selecting proper co,shares.

8. QUESTION:
   Retirement Investing for a single 42 year old?
   No 401(k) option offered. Any options besides ROTH IRA? I do not get any benefits therefore need to pay for my own. No dependants. Tax deferred investments out there?

   • ANSWER:
     Why not do the ROTH???

     Gains from the Roth are TAX FREE…. gains from a traditional IRA are TAXED..

9. QUESTION:
   how does a retirement account work? how how does my money grow by investing in a retirement account?
   I know that once I invest money in a retirement account I can’t touch it unless it’s for emergencies but I would like to know how does my money grow in this type of account and how soon can I see results?

   • ANSWER:
     When you are investing, you have to invest for the long term to see any results. In the beginning years, you may be quite emotional to the market fluctuations. If market went down, the value of your portfolio went down. Your natural response would be, “I lost money.” But the fact is you haven’t lost or gain any money because you didn’t touch your money. How your portfolio performs depends on these factors:
     1) What is your average price per share compare to current price per share?
     2) How long have you had the investment?
     3) Dividends and capital gains payout (if any)
     4) Type of investment. Are you invested in conservative funds or large growth funds? If you want higher growth, you need to be willing to accept higher risks.
     5) How disciplined are you? Are you going to pull out when the stock market is down or are you going to stay in and continue to invest?

10. QUESTION:
    How many of you think that Teacher Retirement Pension Plans will be worth investing in the long run ?
    How many of you think that state Teacher Retirement Pension Plans will be worth investing in the long run if you start investing now?

    • ANSWER:
      Is this something you have a choice in, or is it a requirement of your job.

      Anyway, The Baby Boomers…1945-1950 are a huge population bubble that are headed for retirement, and most retirement funds are not properly funded to pay this many people their entitlements

      YOU WILL HEAR LOTS ABOUT THIS IN THE NEAR FUTURE

      Even the Government plans are unfunded and have Huge liabilities

11. QUESTION:
    Want to sell Retirement Investing blog (#1 in Google) – what to do?
    I have a blog that is position #1 in Google for ‘retirement investment’. I will not run it any longer.

    But simply leaving a blog like this is stupid, because then all my previous job is wasted.

    So, I want to sell it for good money to those who need ‘retirement investment’ traffic from Google.

    Any recommendations where to sell it?

    • ANSWER:
      It would have been better, if you had mentioned your blog url too. As in the absence of your url, it’ll be difficult to answer with the seriousness the question needs. Still let I try to give you an answer based on the details which you provided.

      From my blogging experience, if the category on blogs about is not a very popular one, or if the blog doesn’t show good context ads, or if the blog doesn’t make people to buy something, then there are very much chances that a blog showing at #1 on Google search, will earn nothing from CTR ads. So if this is the case, with your blog too, then you’ are not be able to get a good valuation if you go to sell it.

      So whatever be the case I suggest you not to sell the blog, no matter what category one blogs about getting #1 position at search is still a big achievement. You only have to make it a blog which earns well. For this you can try many things. Like, incorporating tips for Retired people section in your blog, where you can suggest them how to contribute positively to their families and community. Doing some weekly survey, like what us their favorite pastime. If you know some retied person, invite him/her to guest blog on your site, and so on. The idea is to make your readers more engaged and interactive once they come at your blog.

      A blog needs a lot of effort or time to reach a particular stage, in your case getting #1 slot at search, why sell it when it can get you returns. And you can manage all by yourself and make the blog a success. Just need to have a close look at your blog.

12. QUESTION:
    HELP with Retirement Investing for sole proprietor?
    I recently started my own LLC and need help knowing how much I can deduct for retirement off my taxes. Prior to Nov 1, I was in a regular job and maxed out my 401(k) (,500) and for the final 2 months I will be a sole proprietor.
    How can I maximize the amount to put into retirement and take off my taxes? (Or can I?)

    • ANSWER:
      there is an owner only retirement plan that goes by different names at different companies. Waddell & Reed calls it “Exclusive K”. It allows for contributions up to almost ,000 per year. Can it be used in conjunction with your existing 401k from your previous employer? probably – but you should check that part out with the company that you will be setting up the plan with.

      The Exclusive(k)® is a retirement savings plan specifically designed for self-employed business owners with no common-law employees. As a result of the tax law changes introduced by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), owner-only businesses can contribute the maximum employer and employee contributions allowed under a 401(k) Profit Sharing Plan.

13. QUESTION:
    How many of you think that state Retirement Pension Plans will be worth investing in the long run?
    How many of you think that state Retirement Pension Plans will be worth investing in the long run if you started investing now? (like teachers, police, fire fighters, and other government jobs have)

    • ANSWER:
      If these plans are like 401ks, then yes.

14. QUESTION:
    Where do I start with learning about investing and retirement planning?
    I have been an assitant to a financial advisor for 6 months and I am not satisfied with just knowing how to fill out forms and where to send them. I would like to know the meaning behind most of the financial world’s jargon (ETF’s, IRA’s, SIMPLE Plan, etc.) and also how to go about researching stocks. Where would I start? I really don’t have any knowledge of these things besides tid bits I picked up around the office. Any book suggestions for a beginner or any links?

    • ANSWER:
      It’s actually a little surprising that your employer isn’t providing you with more answers. Have you asked him/her? Expressed an interest in learning more? Not only for your own benefit, but it may help you with your career in that office too.

      Another place for assistance may be your own bank. Many banks have financial advisors that help their customers gain a better understanding of the programs they offer. (Granted, they’ll probably be geared toward making you a client – but if you explain how you’re looking for information before making any commitment, they’re usually pretty accomodating.)

      The last alternative, which may cost you a little money, is to check your local community college or continuing education programs. Many local high schools and such will offer evening (or weekend) seminars that offer basic instruction. (Sometimes these are partially funded by local branches of various financial institutions – so be on the look out if they try to push their products.)

      If none of those are options, take a look online. Some companies like Fidelity or Edward Jones may have “tutorial” sections on their website that could help give you some basic information.

      Good Luck!

15. QUESTION:
    Retirement Investing: What is the “three legged stool” a reference to.?
    Personal Finance

    • ANSWER:
      Risk-reward-TIME….

      How much risk do you want to take, what is the reward, and how much time before you will need the money..

      The lower the time… the less risky you want your investment to be…

16. QUESTION:
    What’s another taxed advantaged option for investing for retirement?
    I’m 42 years old, I already max out my IRA, and currently invest in personal money in the stock market. Are they any other ways I can invest in the stock market to save on taxes. Current Income is about 0K

    • ANSWER:
      Does your employer offer a retirement plan where you work like a 401 (k) plan? If so, I’d take advantage of that, especially if they’re going to match contributions. This will give you an immediate tax break.

      Also, consider a growth stock no-load mutual fund. Like the answer above mentioned, taxes will not be owed until you sell at a gain.

17. QUESTION:
    How do I go about investing for a retirement account, preferably Roth IRA?
    I have about 12 more years before I retire and I need to retire comfortably. I came very late to the USA and so will not make it on Social security alone. Are there any other safe options where there is zero chance of losing my retirement money?

    • ANSWER:
      That’s wonderful that you are ready to start saving for your retirement. It is never too late.

      A Roth IRA allows you to add money after tax. What makes this a good option is your money grows tax free. Yes, that is correct. Even your earnings. When you start taking the money out after age 59 1/2, you do not pay any tax on the money you’ve put in nor the earnings on it. That’s why so many people have created their Roth IRA’s in brokerage portfolios instead of basic bank cd’s. If you have more than five years to go, you might want to think about a nicely done asset allocated portfolio. Everything out there is at rock bottom prices.

      If you are over 50 years old, their is a catch up clause in the contributions per year. You can add K more than younger people to catch up.

      Banks offer CD’s for Roth IRA’s also. Another great feature is….you are not required to ever take the money out if you don’t want to. A traditional IRA requires you to start taking a required minimum distribution when you turn 701/2 years old.

18. QUESTION:
    I am 19 and want to start investing money for retirement.?
    I have an E*Trade savings account getting 3.3% interest, but that is not gaining much. I want to start a retirement account that will have maximum earnings but will allow me to remove funds before the retirement age of 65 without penalties. Thanks in advance for any suggestions.

    • ANSWER:
      Troy,
      You are to be commended for being so intelligent at so young an age. If you start saving now, you will definitely be a millionaire when you retire.
      Start a Roth IRA and contribute the maximum amount every year. (That is ,000 per year or 6.67 every month). You won’t get a tax deduction for your contribution but when you take any money out, you won’t be taxed either. The money grows totally tax free. You may also take out any contributions that you have made, without penalty, before the age of 59 1/2. There is only a penalty if you withdraw any of the “growth” before age 59 1/2. Althought you may be able to withdraw some without penalty for a home purchase, but I am not certain.

19. QUESTION:
    What investments are protected from the IRS? I need to start investing for retirement and I owe back taxes. ?

    • ANSWER:
      Investments are not protected at all. If you have the option to be covered by a pension, that would not be levy bait until after you retire. Deliberately hiding assets is a form of tax evasion that can be prosecuted.

20. QUESTION:
    Can a Ouija Board be helpful in investing your retirement savings and pension?

    • ANSWER:
      Strangely, yes. Statistically, “expert” advice is wrong over 50% of the time. Any random method tends to do better than doing what seems to make sense, because what seems to make sense is wrong more often than it is right.

21. QUESTION:
    How to begin investing for retirement?
    I’m 26 and I only have a 401k with just under 4000 dollars in it. I’ve been looking at a Roth IRA but its all so confusing for me. What is the best way to make my money work for me? Any articles or books I should read?

    • ANSWER:
      Try looking at some of the personal finances guru’s websites. They are a WEALTH of knowledge.

      Suze Orman and Dave Ramsey….

22. QUESTION:
    How does Investing for your Retirement work?
    Im 21 college student and I do work and I want to start investing right but I dnt know how this work and need some help and what do you think about these website like etrade and more which one is better to invest

    • ANSWER:
      Save, and then save some more, and then save some more.

      Invest in a diversified portfolio, but don’t think you can invest your way to financial security. Saving a large part of your income is a much better approach than taking a lot of risk in the stock market.

      Work as long as you can to build up your Social Security benefits.

      You might be able to get a pension if you work in government, law enforcement, or education, or if you serve in the military. A pension is a good thing, if you can last long enough in the job to qualify for the pension (usually 20 or more years).

23. QUESTION:
    I know nothing about investing, I want to put money away for my kids college retirement, What do I do?
    What do I do? I want to invest but not in stocks were I where I would loose money. What Do I invest for kids I may have some day and their college education? Also is there something I can invest in for my own retirement? I don’t trust social security!
    How much is enough? Like 0.00 or 5,000.
    And how long?

    • ANSWER:
      I would suggest you look into sharebuilder.com, now owned by INGdirect. You can set up a Roth retirement account and your kids college coverdall accounts. If you don’t like (individual) stocks, go for the Exchange Traded Funds or ETF. They are a group of stocks that follow a particular sector. Much less risk than with individual companies and very good for slow steady growth. There of course is some risk. To avoid all risk, you would have to stick to FDIC insured choices such as CD’s, but they probably won’t do as well.

      How much to invest depends on how old your kids are and how long until retirement. Fund retirement first, your kids can always get student loans, you can’t get a retirement loan.

24. QUESTION:
    How wise is to carry on investing in Insurance Retirement Plan?
    I have taken up an ENRICHMENT policy 3 yrs back. In the present market scenario how wise is to keep paying premium for 15 yrs more? Or is it better to surrender it and invest it in other avenues like Real estate? Your opinion please.

    • ANSWER:
      Since you don’t state the Insurance Company (and “ENRICHMENT policy” gives 1,430 ‘hits’ in google) I can’t be bothered to track it down and find out how well it’s performing ..

      Pension Plans are long term (25 years) .. right now the market is depressed so any ‘transfer value’ is likley to be quite low ..

      However you MIGHT be better off transferring into another scheme, especially since it would seem you do not have an actual Pension (which would get Tax Relief at your marginal rate) but rather some sort of ‘Insurance’ policy (which typically attracts high charges) .. if £10,000′s are involved you need to speak to an IFA (Independent Financial Adviser)

25. QUESTION:
    What prevents large corporations from investing employee retirement funds into government bonds?

    • ANSWER:
      Nothing. If the funds are being managed properly, some of the assets should be in the form of bonds and T-bills.

26. QUESTION:
    Social Security vs Retirement Investing, NOW which one looks the riskiest?

    • ANSWER:
      Now? You mean there was a time when privatization didn’t look like a scam? Not to me!

27. QUESTION:
    im looking to start investing money for retirement question.?
    how much money should i put aside per month to retire in 20 years. what should i talk to my invester about investing in. any help would be appreciated. i live in mississippi and my income is approx 90,000/year.

    • ANSWER:
      Start by adding the maximum to your retirement plan at work. After you max that out, invest the maximum in a Roth IRA each year. If you still have extra investable money after that, put it into a non-qualified account. I would use mutual funds, but you could also go with an annuity in order to defer paying the taxes until you retire.

      Good luck

28. QUESTION:
    What are the best ways to start saving /investing for my future/retirement???
    If I open a ROTH IRA with 00, and put in 0 a month, is that a good enough start? (I just graduated from high school and am eager to start saving) And what about CD’s??? Should I open any certificates of deposits? any other things that i could look into investing in, information, and any help would be very much appreciated!

    • ANSWER:
      There is no “best” way to start, the best thing to do is exactly what you are doing and the is to “start”. If you don’t think you’ll ever need to dip into the IRA, that would be an excellent way to begin your investment career.

      Since you are at the ripe old age of 16, you may want to consider a traditional IRA to start with. With these you’ll have the added advantage of current income tax savings.

      http://personal.fidelity.com/products/retirement/getstart/aboutira.shtml.cvsr

      Once you’ve established your IRA, you can fund it with an indexed mutual fund. There are many excellent one’s from which to choose. Start with an index fund. These have low fees and low volatility.
      ///

29. QUESTION:
    Who is the best broker for cash management (checking, atm), investing (brokerage, trading), and retirement inv
    I am a young professional who wants to get more active in my financial planning. I am not an expert, will not be investing huge sums, and will not be actively changing. I suspect I will mainly invest in money markets, mutual funds, IRA, and a few stocks. I am hoping to get good service, but with the lowest costs. Value is important. thanks!

    • ANSWER:
      i us edward jones — they have small offices in most small towns and gladly work with the little investor!!!

30. QUESTION:
    Is using an immediate annuity and investing in mutual funds the best of both worlds for an early retirement?
    Lately, I’ve been thinking much about an early retirement. Have worked over 20 years in the same company. Plus, always good to prepare as I’ve seen friends and family get an early retirement forced upon them. I was thinking about using an immediate annuity (along with a pension) for a guarenteed income stream. However, since a regular income wouldn’t keep up with inflation, I’d definitely still want to have money invested in mutual funds too.

    Let’s say the annuity plus penison brings in about ,000 a year, with about 0,000 left in other investments and a Roth IRA about ,000. Also, no mortage in home, no dependents to provide for. With ,000, some of that can still be used to continue investing in mutual funds even in retirement. Thus, if a bear market comes along, it’s comforting to know there is a steady income stream.

    Would that combination of annuity and mutual funds be the best of both worlds for a stress free early retirement?

    • ANSWER:
      It seems to me that you are reasoning quite well. I recommend ensuring that your annuity be of the index linked type, or one which rises annually otherwise your real income will be falling. Shop around for the annuity, because the rates quoted vary widely.

      Then consider your mutual funds. These should be of the equity income and property income type, invested in a variety of good markets, like US, UK, and Europe. You can assume that the income from them will at least keep up with inflation, but would probably do better. The income from them is published in newspapers, magazines and in the managers’ brochures,so it will be quite easy to do your own calculations of expected income, and the apportionment you prefer between annuity and mutual funds
      Have a long and happy retirement.

31. QUESTION:
    What are three ways of investing for retirement?

    • ANSWER:
      1. real estate (unless you have a lot of time on your hands or a partner who does you may want to avoid this)

      2. GIC’s (Guaranteed Investment Certificates- no going wrong with these, things like government bonds, they return the principle as well as interest but are not very competitive or aggressive)

      3. Mutual funds (trust your money with a professional or even a few different ones by diversifying among many different funds)

32. QUESTION:
    What are the pros/cons of investing in senior/retirement accommodation?

    • ANSWER:
      There are different levels of housing, depending on the state.

      Usually they fall into 3 levels.
      Independent living
      Assisted living
      Full care facility

      Independent living is just like renting a house, except you can limit the renters to those over age 55.

      Assisted living is the offering of some level of care, like making sure they have taken their medication or help them into or out of bed/bath/etc.

      The full care facility is typically called a nursing home.

      The baby boomers are just starting to retire. I’d think it would be a good investment in the sunshine states, and in the right area.

      I actually have a friend that has a plan for a facility the rotates from independent living, to assisted living to a full care facility as the tenants age.

      He has a 99 year lease on 250 acres @ per acre a year, for the building site. And, he is looking for investors.

33. QUESTION:
    What is the best retirement system,a lump sum to invest in a finacial investing firm or a company annunity,or?
    an annunity you purchase from a company assuning you are 63 yrs old fair health not perfect health?

    • ANSWER:
      The lump. It cannot be taken away no matter what.

34. QUESTION:
    What is the best way to invest retirement money?
    I was just thinking about how I should be investing my retirement money. And if I should be aggressive, moderate or conservative about it. Any help would be great!

    • ANSWER:
      When you are young, you should invest aggressively. When you get older, you switch to moderate. When you retire you get conservative.

      When you are young and the market drops 50%, you laugh and say: “It will recover before I retire.” If you are old and the market drops 50%, you laugh and say: “I’m glad I shifted most of my money over into safer investments”

35. QUESTION:
    Whats a good investment fund , an aggressive fund , I would like to start investing for retirement.?

    Basically im 30 years old , and I would like to retire somewhere around 60-65 , I was checking out a site , It got me interested http://www.finishrich.com/free_resources… … How much do you think would be ideal to have for retirement.. while playing around on that site I was thinking about 500.00 a month to invest, youll notice on that site that the percentage is at 10% but that percentage, the return on you money can go up right

    • ANSWER:
      There are a lot of good sites to learn about investing. Definitely look into more than one.

      You have a lot of time to allow your money to grow. If you consistently put 0 into your account, whether the market is doing well or not, you will be very happy in 30 years. At that time you will easily be able to decide if you want to retire or just keep working.

      Look into the long term results of your investments. Mutual funds buy and sell stocks every year. By investing money in these funds, you are putting your trust in the fund’s management to choose the right companies each year.

      Make sure to diversify your choices, a good portfolio would be broken up this way:
      35% US growth
      30% US Value
      35% Global or International

      GOOD LUCK!!!

36. QUESTION:
    I am 25, looking to start investing for retirement (age 70ish), and going to law school, what should I do?

    • ANSWER:
      1. Establish a backup emergency fund of 3-6K, keep that in a money market, that is your emergency money.

      2. AFTER your emergency money is established, start contributing to a Roth IRA if you are eligible, the tax free compounding for someone 25 is an enormous advantage and the biggest loophole you will ever find. Fund the Roth with a well diversified mix of equity mutual funds where the current manager has a long track record of performing well in a variety of market conditions.

      3. After your monthly contributions to fully fund your yearly Roth contributions are established, additional savings should go to bolster the emergency backup fund, then fund non retirment investments (usually mutual funds).

37. QUESTION:
    Any recommendations on investing for retirement?

    • ANSWER:
      Start early, contribute at regular invervals, keep costs low, and match your risk exposure to your time horizon. Low-cost, index mutual funds are your best friend for retirement investing.

      I have a free downloadable book that will teach you everything you need to know about retirement investing. I am not a financial representative, but am actually a pharmacist with a passion for teaching people about this subject. Click on my profile and email me. I cannot post the site here, as it will get deleted as “spam”, even though I am not selling anything.

38. QUESTION:
    Investing for retirement while unemployed?
    I would like to continue to invest in my retirement while looking for a new job. Is this possible as I already maxed out my Roth IRA for 2009 already? Any suggestions would be appreciated

    • ANSWER:

39. QUESTION:
    Primerica in Canada – Investing for Retirement?
    I had Primerica representative in my house approximately 8 or 9 months ago to discuss investing for retirement. Although I receive a pension from my company, my husband company does nothing. After speaking with the representative and because we hate doing business with banks, we decided to to do monthly payment for RSP (in the form of mutual funds). I did some research about Primerica and although their products are not for everyone, they did meet our needs. But I am wondering if we made a mistake. I was wondering if other people have had a positive/negative experience with Primerica in regards to their investments?

    • ANSWER:
      I open my Roth IRA through them and later became an agent with the company. I don’t know what its like in Canada, but my experience been good. My investments been doing pretty well with an average rate of return of 12% in the past 2 years. I can check my investments anytime by going online at Primerica.com. I can’t tell that you are going to get an average rate of 12% until retirement because every investor is different. I don’t even know if I’m going to get 12% in the next 30 years. For me, I’m young and so I should invest into more aggressive growth mutual funds.

      Anyway, I hope the agent you dealt with was able to explain everything to you. If you have concerns, you should talk to him or her.

40. QUESTION:
    Retirement/investing/saving?
    I am 25 with Roth IRA of only 0ish currently. I only add like /month to it. It’s through my bank, USAA, called cornerstone strategy fund(moderate risk). I don’t know much about investing, but should I actually be putting more money into it(since poor market)? I also have a mutual fund for emergency savings purposes with like K(low risk). I add 0/month to it. I also add 0/month into ING savings account with 2.5% rate return(only 0 in it now). How does my savings and retirement plan need improvement?
    The only debt I have is K on my Civic. The rest are regular bills like rent, cell phone, etc.

    • ANSWER:
      We are in unique economic times with a collapsing financial system. Even most seasoned investors were probably stunned in 2008. But it sounds like you are doing well in putting money into investments. However, are you saving as much as you want available for retirement and for emergency savings? Have you considered different kinds of CDs, their rates and conditions (some allow early withdrawal without penalty)?

      Inflation seems to be expected in 2009 which might not be good for many investments — a physical precious metal investment might be an exception this year, like an investment in precious metals that are bought at a good price off of ebay and stored. However, such an investment is volatile (often gains or loses money fast) and has costs like postage and could get stolen. People often overpay for precious metal coins when they don’t know how much they are worth.

      I’m pretty sure that you may add ,000 this year to a Roth IRA. Can you afford that much — or do you need it now? It might not be worth going into debt and making interest payments on the debt.

      If you need savings for the future and you have no need to purchase much else to help you along currently since you already have a new car, maybe putting money in savings is a good idea even if will lose some purchasing value. If you want to play it safe cashwise, you could try putting some money into a USAA money market fund. It might not keep up with inflation but it might retain some value for the future when you need it. Even losing investments can be worth it, just to have money in the future when much more in need of money.

      I invested in Brita filters and corresponding pitchers and I double filter well water to save on spring water. I invested in long distance telephone cards from Costco that don’t cost much per minute and last me a long time. I invested in supermarket food and stopped using restaurants. I drive less in spite of low gasoline cost.

      ADDENDUM: coach is sort of right but to answer his question about why: it’s because you can withdraw from the savings account, while paying off the car loan cannot be undone. So emergency funds are sometimes more important than paying off debt. However, if you can afford to pay off the debt, it’s different.

41. QUESTION:
    Need help with retirement investing?
    I am 41 years old, have a wife and 2 middle school children, semi-retired making about K a year…everything is paid for. I am thinking of investing in municipal bonds or cd’s. Current net worth is about 2.5m, of which 2m is cash. I really need about ,500 a month income. I was thinking of investing 1.5m in municipal bonds and 0k in 90 day cd’s, leaving 0k in the bank. Any suggestions ?

    • ANSWER:
      You sir need a financial adviser. Pay one upfront that is not associated with any Brokerage House. We found one locally and We were very pleased with the outline given to us. They can lay out the next 10 years for you. No pressure because you are paying a flat rate for the service.

42. QUESTION:
    I need to start investing for retirement. Can I start a ROTHIRA now, even though I plan to start a 401k soon?

    • ANSWER:
      You can…whether it would be beneficial or not is another question. The ROTH and 401k are mutually exclusive. You can contribute to both. The ROTH though has income limitations while the 401k has dollar amount limitations.

      Now, whether a ROTH is beneficial is dependent upon your age and your income. It is only beneficial if you are a) young and b) at the beginning of your income level. For those people whose income level has peaked it becomes less attractive because they will likely be at the same or HIGHER tax rate then when they retire. Thus they are actually losing a benefit. And yes while your distributions are tax free the contributions were not. So in comparing the two you have to account for the lost income on the taxes paid. That is substantial.

      Enter into a ROTH only if it’s worth it for you. It’s not appropriate for everyone. Also…start the 401k sooner rather than soon. As in tomorrow. Get that money earning…especially if a ROTH doesn’t suit you. If you have the cash then you need ot make sure that your income can support a substantial 401k deferral and that means starting it and allowing your annual income limit to build.

43. QUESTION:
    I’ve waited too long to start investing for my future retirement,what are steps I can take to catch up fast?
    I’m a 48 year old woman. I have a good job making ,000 annually however I just recently got this job. My other jobs were not near this financially therefore I didn’t get a opportunity to try and put money aside for retirement. Are there any investment companies out there that will not cheat me and are legal. I would like to hear from them and especially women who started putting aside a little late like me that now have something to fall back on. I don’t know where to start and who to trust. Can someone who has been in my position tell me how they did it. I just need some advice from anyone who has. Thank-you kindly in advance.

    • ANSWER:
      Avoid annuities& whole life – huge expenses. Avoid banks – limited options. People “lending” to banks never get ahead of inflation. Start a schwab acct & start building some S&p 500 index mutual fund & fixed income positions via mutual funds slowly over time. Can’t fear equities as they are the only liquid asset that can beat inflation. Some gold funds also needed in this current environment. Talking to professionals may well not help as they are salespeople first. Schwab gives pretty straight advice to those who needed it & non-comissioned advice at that. Have to max your retirement options as has been mentioed. Most people get TOO MUCH information & that paralyzes them. Act now. vegas_iwish@yahoo.com if need some help.

44. QUESTION:
    what best options for investing lump sum amount of voluntary retirement benefit under current economics India?
    Retired employees -in early forties- now jobless -needs to find another job. Under these conditions where they can invest to get good returns, safely and without having tax burden (they don’t have the benefit of Rs. 5,00,000 of tax exemption usually eligible for V.R.S employees
    if PF account is closed, what are the options? which shares, Mutual funds gives good returns and are safe?

    • ANSWER:
      best way would be break up the amount into four parts, 1st part could be deposited into ur pf fund
      2nd part could be deposited into FD in a psu bank
      3rd part could be deposited in gold
      4th part could invested in shares, mutual funds and life insurances.
      break up of the amount should be as of according to u.

      additional ans:
      if ur pf acc is closed then u can start a new acc in sbi. if u don’t want to and want to invest in mutual funds then choose the funds which invest more into debt rather than into the market. the returns would be low but they would be safe, check with sbi, reliance and other fund managers who have funds that invest in debt.
      ril, praj, l&t, tata steel, reliance power, are some of the great shares, invest in those and u r atmost sure u won’t lose ur money. don’t invest on shares which go touch the circuit too much, stay away from fertiliser and agricultural shares.

45. QUESTION:
    I am on ss for a disability. II am 35 and want to begin investing for retirement, What can I do and what is?
    I want to begin a ira and need to know the laws and how much i am able to invest and how to do it

    • ANSWER:
      Invest in an indexed annuity. You will make money if the stock goes up, but you will not lose money if it goes down. Go see an investment broker

46. QUESTION:
    What do you save for first – home or retirement?
    I’m a working college student – working my butt off, to be precise, so I don’t have any debt. I want to buy a house in the next year or so. I’m already 26, and I know I should have a retirement account – but getting your hands on a piece of real estate is a really important investment, too. My plan so far has been to put every dollar into savings for a down payment to get the house ASAP – ignoring starting a retirement account for now. But I also know that time is on your side as far as retirement investing- when money is tight and you’re aiming to buy a house, how do you decide?

    • ANSWER:
      You can serve both purposes at the same time. If you dont plan to buy a house for atleast five years, invest in a Roth IRA. You can contribute up to ,000 in 2006 amd 2007. Starting in 2008 you can contribute up to ,000 per year. You also have until April 15 of any year to contribute money for the previous year. First time home buyers can take up to ,000 (lifetime limit) out of a Roth tax and penalty free, as long as you have had the IRA for atleast 5 years. You can also take out your own contributions to a Roth IRA tax and penalty free at any time. If you take money from a 401k plan to buy a house, you either have to take a loan from the plan, which you have to pay back or else it becomes taxable as well as pay a 10 percent early withdrawal penalty. Or you have to qualify for a Hardship Distribution, which you have to pay the 10 percent early withdrawal penalty on. If you take the money from a Roth there are no strings attached, other than the ,000 lifetime limit, and the 5-year rule. So, theoretically if you start a Roth in 2006, in 5 years you could take out ,000 (your contributions from 2006-2010 plus ,000) free of any taxes and penalties. And if you make a contribution before April 15 2006. for the 2005 tax year, you can meet the 5 year rule in less than 5 years.

47. QUESTION:
    Thinking about retirement investing…?
    My husband and I are interested in beginning to plan for retirement. We are able to contribute about 00/year. We are 23 and would like to retire between 55-60. He works for the gov’t so he will get a pension, probably somewhere in the range of ,000 a year after he retires.

    My question is this – if we begin to invest 00 a year now, in 35 years, how much (approximately) will our annual income be including his pension?

    • ANSWER:
      My quick answer is “about ,000/yr from your investments (doesn’t include the pension)”. After inflation, that would be the same as earning about ,800/yr from your investments in 2008. However, take these numbers with a grain of salt. I’ll tell you how I came up with them, then you can recalculate however (and whenever) you please.

      First, if you’re investing ,600/yr for retirement at age 23, you are *way* ahead of your peers and stand a good chance of reaching your retirement goals. Many folks wait until their 40′s to think about retirement (bad move!)

      Second, consider that in the next 35 years: 1) we can only guess at the performance of the stock market, 2) we can only guess at inflation, and 3) your income will likely increase and you’ll be able to contribute far more than ,600 in the future.

      Okay, here’s what I assumed: 1) the stock market averages a return of 8% over the next 35 years, 2) you invest in a low-cost, no-load index fund (I recommend Vanguard Total Market Index), and 3) inflation averages 4%.

      After 35 years, your retirement account balance will be 3,568. One rule of thumb says that, when you begin retirement, begin by withdrawing 4% from your savings. You can increase the withdrawals each year to account for inflation. If you do it this way, you can probably make your money last forever despite the ups and downs of the stock market. You can withdraw more, if you’d like, since you probably won’t live forever – be make sure it’ll last for your entire retirement (which could last 40 years!)

      So, 4% of that balance is ,943 to spend in your first year of retirement. Sound like a lot? Well, if inflation averages 4% in that time, your money will only buy what ,828 will buy in 2008.

      If you invested in a low cost index fund from Vanguard, and put your money in a Roth IRA, that income will be tax free. Also, in addition to your husband’s pension benefits, remember you’ll be getting a modest amount of income from social security, too.

      You’re on the right track! Just start socking away money today. Once a year, take a look at how you’re doing and adjust your plan accordingly.

      Good luck!

48. QUESTION:
    Investing money for retirement?
    I am 33 and what to start saving for retirement. How do CD’s work and is the bank or credit union the best way to go. What are some viable investing options for beginners. I personally do not want to work with any companies that charge fees. I want the most sound and safe way possible.

    • ANSWER:
      CD give very low return. it might not enough even to beat inflation. Try stock investing!

      Invest in quality stocks for long-term and don’t depend on stock trading too much.

      Holding quality stock is like owning an excellent company; with hardworking employees struggle to generate income as much as possible for you. While stock trading is good for short term investment period, it will cost you much in transaction cost in the long-run.

      to pick this kind of stock, look stocks that able to perform 15% ROE and 15% EPSGR (just for example) at least for the past 10 years. you’ll be amazed on how much junk stocks are in the stock market by just applying this method.

      high in ROE show that the company is working really hard to satisfy its investors. as much as possible, they’ll meet the target set before and able to return some of the profit to its investors. this can be either in dividend or bonus issues.

      high in EPSGR means the company able to grow in a growing industry. higher growth than the industry average shows that their product or services is widely acceptable to customer, another comparison that you need to do.

      Stock Investing for Beginners

      http://www.stock-investment-made-easy.com/

49. QUESTION:
    T Rowe Price retirement investing?
    am new to T Rowe Price as the company I just started working for offers 401k.
    I am only 20 years old and will probably work at this job for awhile.
    How should I invest my money with t rowe price. I would like to set
    up a portfolio and keep track of my investments. My choices are as follows;:

    AMERICAN BEACON LGE CAP VALUE
    ARTIO INTL EQUITY II, I
    BLUE CHIP GROWTH FUND
    COLUMBIA ACORN INTL Z
    DREYFUS/BOSTON SM CAP VAL FD
    PIMCO TOTAL RETURN INSTL %
    RETIREMENT 2005 FUND
    RETIREMENT 2010 FUND
    RETIREMENT 2015 FUND
    RETIREMENT 2020 FUND
    RETIREMENT 2025 FUND
    RETIREMENT 2030 FUND
    RETIREMENT 2035 FUND
    RETIREMENT 2040 FUND
    RETIREMENT 2045 FUND 100.0%
    RETIREMENT 2050 FUND
    RETIREMENT 2055 FUND
    RETIREMENT INCOME FUND
    TRP STABLE VALUE FUND SCH E
    VANGUARD 500 INDEX SIGNAL
    VANGUARD SM-CAP GR INDEX; INV

    • ANSWER:
      You have some respectable individual funds, with which to build a portfolio. Study your offerings, set your asset allocation, and then pick your funds.
      In the meantime, why not choose one of the target date retirement funds – 2055. That’s what I did initially.

50. QUESTION:
    The small company I work for does not have a pension program or a 401k. Best retirement strategy besides IRA?
    I max out my Roth IRA contribution every year, but I have a lot of money left over that I could invest. Besides investing in mutual funds or cash-value life insurance, are there any other good long-term retirement investing strategies?

    • ANSWER:
      best strategy? Talk to your boss about installing a 401k. Costs are minimal nowdays. startup costs are about 2k and annual costs are about the same. Both are deductible expenses and small businesses even get a credit for first year (I think it’s still available anyways). Many plans that I set up for my clients involve some contributions on side of ownership but in most the amount that they have to contribute to the staff through matches and contributions is LESS then they would have to pay to the IRS in taxes if they didn’t have the plan. Essentially like this…install a 401k and provide 3% of pay to your 10 employees who average 50k in salary. That’s 15k in 3% contributions. Boss then puts away 15k of his own (20k if he’s over 50 years old) and receives his own 3%. If we assume boss makes 200k then his total tax deductable contributions is his 15k PLUS the 21k in other contributions for 36k. Boss’s tax rate is 38% which equates to a tax savings of about 14k. So, Boss is now able to put away 21k of his own money and it cost him a total of 3k to do it. 1k to his employees (uncle sam funds the rest through lower taxes) and 2k to the company doing the recordkeeping.

      You wanted the best…I gave it to you. Talk to your boss and get him to start a 401k. Make sure it has Roth contributions and fund them at 7,500 each. You’ll be glad you did.