What is the best way to save money for retirement?

Question

I'm under 40, and I'm planning for my retirement. I plan to retire when I'm around 60-65. So, what would be the best way for me to save money till then?

Also, I want to save without any risks. I don't want to end up WITHOUT money. ;)

Answer 1

Without risk you need to buy CD's certificates of deposit and money market accounts that are both FDIC insured that way there is no or very low risk. also US savings bonds and T- bills are no risk. Mutual funds, and other items are more risky. you can make the group of accounts (CD's, Tbills) your IRA and it is tax sheltered but then if you make it an IRA you can not withdrawal until you are at least 59.5 years old. add to it at least 10% of your income.

also look into a 401K at work because you may get matching funds then put that 401K into a low risk or no risk investment that is offered under the 401k plan. Contibrute at least enough to get the full match or if no match put at least 10% into this and you will be oK.

Actually better than OK if you open both the iRA and 401K and save 20% of your income between the two.

Answer 2

Have your employer divert the highest % you can to an IRA ,
So you never have to 'make the choice' - it's already there.
Saving with no risk is bonds and CDs but they earn minuscule amounts of $$$ . With inflation , you may end up with more $$ numerically , but less relative to the real cost of living.
The market cycles , and since you have several decades before retirement , you can put some in there , ride out the down cycles and sell when it goes high again ( as long as you don't invest in companies going bankrupt )

Answer 3

If your employer offers a 401k plan or similar that is the first choice. Generally, employers offer some type of matching contribution (free money!!).
Second is an IRA or Roth IRA account.
With a 401k you typically have from 3 to two dozen options of how to invest your money. With an IRA your options are nearly limitless.
If you are not sure, find a financial planner who can help you (ask your back or friends to recommend one).