retirement advice?

Question

I am currently 32. I plan to retire at 52. I am currently investing in a tax deferred account. I wish to have money available at 52 also. Is it better to invest on my own for the money I wish to have from 52-60 or would it be better for me to put it in the tax deferred account and take the 10% penalty?

Answer 1

Well, why put your money in a tax deferred account when you can put it in a tax free account--Roth IRA. Granted the money you place in the account is after taxes, but all earnings are then tax free for ever or until the government changes the law.

It is always a good idea to invest some of your money in accounts where you have ready access. Who knows what the future might bring.

As for the 10% penalty. That would apply only to the money you withdrew from the deferred account before age 59 1/2. Interestingly enough some people have amassed such a large amount in their traditional IRA accounts that their forced withdrawals puts them into a very high income tax bracket. Something they had never anticipated.

A neat trick, if you have a traditional IRA and you are going to retire at 52, would be to begin converting acceptable amounts from the traditional IRA to a Roth IRA on an annual basis beginning at age 52 assuming your tax rate drops. Once the amount is converted it then earns returns that are tax free not tax deferred. Convert just enough each year so that you are not driven into a higher tax bracket.

Answer 2

Any money you want to spend at 52 you'll need to put into some type of an account that you can tap in to at that age.

I certainly do like the Roth & 401(k), but you'll have limited access to that money at 52.

I'd go with a regular old non retirement investment account. I'd use some nice growth stock mutual funds and wouldn't sweat the tax issue (long term capital gains are only 15% anyway).

Answer 3

Both. Priorities should be:
(1) 401(k) up to company match level
(2) Roth IRA
(3) 401k to maximum or Traditional IRA
(4) taxable accounts

To maximize your value, you will utilize your money in taxable accounts from age 52-62/65, then the majority of your retirement (62 onward ... expectation about 90 currently) will be funded through 1, 2, and 3 above that have tax advantages

Answer 4

Congratulations on having the the great good sense to plan for your future.... and on setting some excellent goals. No matter what you invest in, make sure you can sleep at night and that you know the risks and your tolerance for risk.

If you have an employer who offers a 401-k plan, invest in that first. Find out:
1) How much you can invest in it each year.
2) Does your employer match what you put in, up to a point?

Invest as much as you can in this, and have them put your money in Mutual Funds consisting of high quality common stocks.("Value" Funds and "Growth" Funds)

If you still have money to invest after you've maxed out your 401-k, then invest in a ROTH IRA. That money won't be taxed until you retire. Again, Mutual Funds.

Remember to stay with high quality, and diversify as much as you can. It takes patience and discipline. Best wishes!!

Answer 5

Put as much as possible in a Roth IRA. You won't get the tax deferral now, but if you hold the account for the minimum required time (5 years I think), then none of the earnings in the account will ever be taxed regardless of when you make withdrawals.

Answer 6

drawing close to retirement is form previous due for suggestion yet i might decide to declare physique of ideas retirement particularly early and keep for it and get a money. Deny your self some "themes" now and likewise you have got a sturdy time with life extra desirable later( plus by way of skill of then, you will discover you particularly did no longer decide for those assets you used to % on) Retirement making plans ought to take place the 1st week you have a activity. stay properly low-fee and do without assets you do no longer decide for.A written long form plan, mid form and annual money all help you get to three quantity the region you would be extra desirable useful arranged to retire. If, on the comparable time because of the fact the time comes, you do no longer % to retire, you will nevertheless be residing particularly solid and ought to nevertheless have a sturdy time inclusive of your self if artwork is what you opt to maintain at..

Answer 7

If you are not confident with yourself, then put it in the tax deffered account. If you are willing to bet on yourself, you may get a huge return on your own investment strategies.

Answer 8

Consider researching your own companies... right here on Yahoo! Finance. I have found some solid performers this way. Go to: http://screen.finance.yahoo.com/stocks.html