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According to The Retirement Security Project, in 2004, more than half of all households had nothing saved in an employer-based 401(k)-type plan or tax-preferred savings account. Among those households headed by adults aged 55 to 59, half had $15,000 or less in savings earmarked for retirement. Perhaps the individuals surveyed felt they had plenty of time to save and invest for retirement, but never got around to it.
If you’re like most people, you usually don’t have much spare cash to invest. One solution is to pay yourself first, instead of investing what’s left over at the end of the month. Your goal, especially after you start working, is to implement a forced savings program. Money is saved and invested before you get your hands on it. Best of all, you never feel like you just reduced your disposable income by saving. You view your income as your take-home pay.
You can do this with:
- Automatic investment programs
- 401(k) retirement savings accounts where contributions are deducted from your paycheck
- Individual retirement accounts (IRAs) using regular withdrawals from your checking or brokerage account
With these automatic transfers to investments of your choosing, you are able to save and invest painlessly for retirement.
Starting While You're Young >> |
