Planning For Retirement At Any Age

October 24th, 2006  |  Published in 401K, Investing, IRA, Roth IRA, Social Security

The “Retirement and Planning Center” at Yahoo Finance has a great article from USA Today that outlines a retirement strategy for every age group – 20 to 29, 30 to 39, 40 to 49, and 50 to 59. As expected, the younger you are the more aggressive (emphasis on growth) they recommend you be and the older the more conservative (emphasis on income) they recommend you be. Within each age group they also give advice as to what you should do with respect to your retirement options, like your 401(k) and Roth IRA, and other major financial decisions, like saving for a house or for college for your kids.

20 to 29
Investing breakdown: 50% in an S&P 500 index fund, 25% in a small cap fund, 25% in an international fund. Start your 401(k) and contribute up to the company match, start a Roth IRA, start an emergency fund, and create a living will.

30 to 39
Investing breakdown: 50% in an S&P 500 index fund, 20% in an international fund, 15% in a small cap fund, and 15% in a mid-cap growth fund. Don’t sacrifice retirement savings to save for college for your kids, keep contributing to your 401(k), and don’t confuse whole life insurance with a retirement plan. It’s good to have but it’s not a retirement plan. Write a will.

40 to 49
Investing breakdown: 40% in an S&P 500 index fund, 15% in an international fund, 15% in a small cap fund, 15% in a mid-cap growth fund, and 15% in a bond fund. Max out that 401(k), be sure your emergency fund is 2-3x your monthly expenses, be sure your mortgage ends when you stop working, fund your Roth IRA or other tax efficient alternatives, and update that living will.

50 to 59
Investing breakdown: 30% in an S&P 500 index fund, 30% in a bond fund, 10% in a small cap fund, 15% in a mid-cap growth fund, 10% in a mid-cap blend stock, and 10% in an international fund. Review your life insurance plan, increase savings, and utilize catch-up provisions for your retirement accounts. When you hit 55, review your Social Security benefits and any pension plans you may be a part of. Finally, update that will again.

via Yahoo! Finance.

  

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