A Teen worried about her future...?!?

Question

I know that by the time i get older i will be working for the rest of my life because social security will not exsits. How do i prepare for retirment? What is the 401k plan? what are somw ways to save up for college besides scholarships andstudent loans?

Answer 1

hi, i was a teen before and i hope my comments would help you.

1. 401k is a kind of retirement plan offer by your employer usually when you have a full time job, it's the BEST way to save $ for your future since it lowers your tax bracket and some companies would match your contribution.

2. I worked part time when I was in college but would only recommend this if you can balance your work/study life. Loans might not be as bad as you think since the interest can be tax deductible after you graduated ;-)

3. Best way to save $ for your retirement is not to spend more than you make and always live in a lifestyle lower than you can afford.

Good Luck,
Allen

Answer 2

Get a job and start saving money, open up an IRA, every year on January 1st put $2,000.00 into it. Roll the IRA into a Roth IRA account and keep putting the two thousand dollars into it every year.

Every 6 years the money in the Roth IRA doubles. So that the $12,000.00 from the first 6 years will turn into $24,000.00 at the end of the 6 years. Every 6 years it doubles. Remember that the money that doubled is tax free, so that you are only paying on the money that you put into the account each year.

By the time you retire you will be a millionaire. Plus what ever you put into a 401 k through your work. Just do not take the money in either of those accounts out until you retire, that is how you will have money for your retirement.

You could probably take some of the money from your account for college if you wanted to but it would be better if you didn't.
Go to the library or look on the Internet and see what types of scholarships are out there for you to apply for, apply for as many as you can. Get into some kind of sports,as that would help when it comes time for a scholarship as well. It will all take work on your part but you can do it if you want.

Answer 3

Kerry, tax leins ? for a beginner? come on.....tax free muni bonds when the question is about tax deferred 401k?? come on.. Bonds are not the "best" investment for retirement for most people. It depends on your risk tolerance. If you can't sleep at night knowing your investment may lost value for 5 - 10 years (remember the "tech bubble of March 2000" Many stocks have not recovered from that yet, 7 years later) or if you need the money (like for college) in only a few years, CD's or bonds are better than stocks. But for long term 40+ years retirement investing, stocks, in the past (no guarantees about the future, so someone should NOT say an IRA will double in 6 years, it may not!) have realized a total return of around 11% to 12% per year vs. bonds 7% to 8% return. Over 40 years, with stocks, odds are you will have a lot more coins in your pocket. The best way to prepare for retirement is to educate yourself. Good jobs, higher wages are the thing to shoot for now. For the short term until college (2 year community college to start out is a good, much less expensive choice) as mentioned above, stocks could lose value, stick to short term bonds from good companies or governments, or FDIC insured CDs. For the best rates, go to www.bankrate.com. For retirement, for now, just remember "Invest in what you know." That is advice from the best mutual fund managers Fidelity ever had, Peter Lynch. He retired young and does not have to worry about social security.

Answer 4

A 401k is an investment tool. It is a means to take money out of your paycheck and place it in a pretax investment plan. Some companies that administer the plan allow you to choose how the money will be invested, others do not. There are fees involved for the administrative costs of your account. Once you are old enough to take the money out, taxes will be due on that money because it came from a pre-tax source.
You can invest in stocks, although I have found that bonds are a better way to invest. Municipal bonds are usually the most secure.
You can also invest in real estate. The key is to use Tax Liens as the means to invest. DO NOT use mortgage auctions, use tax auctions. Do your own home work rather than use some listing agency. There is a very good profit to make if you are careful.

Answer 5

Best way to save up for college is get a part time job. If you're not going to qualify for a lot of need or merit based scholarships, consider going to juinor/community college for your first year or two and transferring into a more expensive university.

As a teenager your primary long term financial concern should be choosing a career that will both satisfy you personally and support your lifestyle. After college you can worry more about wealth accumulation and saving for retirement.

Don't mess up your credit score by charging up huge credit card bills and missing payments. It's wise and convienient to get a credit card, but only use on rare occasions, such as buying gas and paying it off in full every month. This establishes a credit history, which can help you get a better interest rate when it comes to getting a mortgage.

The fact that you're worried about this at such a young age means you'll most likely do fine. Don't buy an expensive car, don't use a credit card to build up huge amounts of debt. Don't worry too much about moderate amounts of student loans; the interest rate is quite low, and you can pay them off over a very long period of time.

Answer 6

You are very smart.

Perhaps you will become the first female President of the United States of America in the future.

I suggest you to open a brokerage account at Zecco (It's FREE) and save evey penny for Harvard or any other Ivy League School.

I suggest the ETF DIA.