I am 34 years old and I really do not have a retirement plan can anyone help?

Question

I am really starting to get concerned about retirement.. Can anyone tell me where to start? My company doesnt have a 401k plan..

Answer 1

Hey there! To answer your question your not alone many people are unprepared for retirement. One-third of workers did not save anything for retirement last year (USA Today March 2, 2006). Thats even more alarming considering half of all families have total financial assets of less than $23,000 (Smart Money, Oct. 2006). To start you must talk to a financial coach that takes in all areas of your financial life (debts, investments, insurance, etc.) It gets confusing and seems like its going anywhere, when your going to many different people. My client get advice on all areas because with me being focused on their entire financial picture the better I can service them. Take a look at an IRA (Roth or Traditional). For 2008 you will be able to invest $5,000 a year into them, $4,000 this year. Setup a spending plan and free up money whereever you can to invest. If your in Tennessee I could help you out personally or I can contact someone in your state to sit down with you. $1,000 per year invested @ 10% will grow to $199,724.67 in 30 years or $5,000 per year @10% will grow to $994,655.88 in 30 years

To respond to the one saying stay away from primerica, 1 spell it correctly please, 2 WHY? we offer investment choices from American Funds, AIM Investments, Franklin Templeton Investments, Legg Mason Partners, Oppenheimer Funds, Pioneer Investments, Van Kampen Investments, ARE you saying to stay away from those companies?

Answer 2

It's still not too late - you've got 33 more years until you reach your "retirement age" of 67. If you open a Roth IRA, you can start contributing right away. The limit in 2008 is $5,000.

Let's say you start contributing $416 per month right now, put the money into a well diversified total market index fund, and are able to average an 8% return over the next 33 years. If you do nothing else, you'll have about $760,000 at the end of 33 years. That's not a fortune, but it's a heck of a lot better than nothing.

Here's something else to chew on: if you buy a home to live in and have it paid off 33 years from now, you won't have a mortgage payment to make in retirement. That's huge, because housing is usually your biggest expense.

Don't worry about getting everything right before you start. Get going now and you'll figure it out along the way. In 5-10 years, you might be working for a company that does have a 401k - but if you wait another 5-10 years to get started, you'll have to save significantly more (and I mean much, much more) each and every month to make up for lost time. Good luck.

Answer 3

A 401(k) and a 403(b) are essentially the same. 401(k) is when you work at a for profit employer and 403(b) is when you work for a non profit employer. If there is a "match", where the employer matches your contributions, then always contribute, at least, up to the amount that gives you the full match. After all, why give up free money? Your contributions to your 401(k) or 403 (b) may put you in a lower tax bracket. After you have contributed enough to get the match then you have to know which income tax bracket you belong to and what investments they [the 401(k) or 403 (b)]offer. Can you deduct contributions to a traditional IRA? Are you in a low tax bracket (like 15%)? If so, a non deductible Roth IRA might make more sense for you since all the money in the Roth will be tax free when you retire. You should talk with a financial advisor ( a CFP) who understands your tax situation now and can help you decide what is the best course for you.

Answer 4

34 is still young enough to do well...if you start now.

All things being equal start here:

(1) Open a Roth IRA at Vanguard and put all the money in the Vanguard Total Stock Market Index Fund Investor Shares (VTSMX).

I would put your max contribution in for the 2007 tax year (until April 2008) in and open the account after the first of the year 2008...then put in the max for 2008 tax year in as soon as possible and start the max contribution for 2009 as soon as possible after 1/1/2009. The reason for this detail is to minimize the $20 annual fee for IRA's at Vanguard. Once you hit $10,000 the fee stops. Not a huge deal, but if you have the cash, avoid it.

(2) Set up an account at TreasuryDirect account for savings bonds. Begin buying weekly, monthly, quarterly (whatever works best for you and your budget) I bonds.

(3) Now for the math -- What is 10% of your gross income? What is 15% of your gross income? Your savings for retirement -- and only retirement -- should be between these numbers. What is the highest number between these figures that seems do-able to you at this point?

(4) If your number from (3) is great than the maximum contribution allowed for a Roth IRA, put an amount equal to your contribution to the ROTH IRA in TreasuryDirect I Bonds. There are no fees for this account. You can open one at any time provided you have a US bank account. Taxes are not paid on these bonds until they are cashed.

(5) If your number from (3) is greater than 2 times the maximum contribution for a Roth, in the first 2 years (2007 & 2008) use the "difference" to max out the IRA and the Treasury account as if you has been contributing continously for all of 2007.

After you reach $14,000 in contributions to each account (last link for limits) in 2009, you will need to open a TAXABLE account, to continue contributing your 10%-15% annually to retirement UNLESS you become eligable for 401(k) plan. If so, put that option ahead of (1) & (2) above. Max the 401(k) and then put the excess in (1) & (2), maxing (1) before (2) up to your 15% max retirement contribution.

Answer 5

That's a good question Brandon. It's great that you are putting thought in to retirement while you're still young. The sooner you get started investing, the longer your money has to grow and compound. For your situation, I would recommend opening an IRA. An IRA is the simplest and most widely used retirement account. An IRA allows you to contribute up to $4,000 annually($5,000 beginning in 2008) and allows you to invest in a wide variety of investments (stocks, mutual funds, stocks, money market, options, etc.) If you want to be in charge of your own investment decisions, one way to open an IRA account is with an online brokerage site, such as ETrade or Zecco Trading (which offers free stock trades). If you prefer to have guidance and recommendations on your investments, I am a financial advisor and would be happy to meet with you and taylor a plan to suit your needs. The benefit of having a financial advisor is you receive active management from a licensed professional and a plan that is designed specifically for your financial situation. Feel free to send me an email if you'd like to sit down and discuss your financial goals. But for those who prefer to manage their own investments, the online brokerage sites I mentioned above are great. Hope this helps.

Answer 6

Stay away from;
Banks
Insurance Companies
PrimeAmerica


You can start a ROTH IRA. You can, in addition open up Mutual Funds. Read a couple of good books on retirement investing (believe it or not the "dummy" series has a good one). You must learn about "Asset Allocation" & make a plan that fits you.

Then contact;
Schwab
Fidelity Brokerage
Vanguard
T. Rowe Price
etc.

Good luck.

Answer 7

Many people get to their 30s and 40s then panic as they have forgotten or not been bothered with a retirement plan.

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Answer 8

You can open your own IRA at a bank and they will deposit it in your account for you if you have direct deposit. Try to take out at least 5%.

Answer 9

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