takes the mystery out of investing. For more informa-tion about the fund, visit the parent company’s Web site: www. steinroe.com or call 800-338-2550.
ASSET ALLOCATION – 20S
Single mother, 26 o lives in Falls Church, Virginia o makes $47,000 a year as a consultant o has already socked away about $9,000 in her 401(k) plan o puts 7% of her annual salary into the plan o just bought a $115,000 house, borrowing $3,000 from her retirement plan for the down payment o pays about $1,000 a month in mortgage and maintenance.
You should build your investment portfolio around your 401(k) plan. Investing pretax dollars in your plan will lower your taxable income every pay period and give you tax-sheltered growth. Increase your 401(k) contribution to the maximum. If you have adequate monthly cash flow after making the maximum contribution, consider a systematic investment plan. Repay the loan from your pension plan as quickly as possible. After the loan is repaid, start putting $50 a month in a growth mutual fund, like Goldman Sachs Capital Growth, for your child, and $100 a month for yourself. Mutual funds will give you a reasonably diversified portfolio.
Source: Mark spradley, Legg Mason Wood Walker
