Saving Early for Your Retirement

Though decades away, developing a plan in your 20s vital

getting raises regularly, earmark them for your retirement. You’ll hardly notice that you’re saving more.

Investing your money has gotten a lot easier in recent years with the increased use of target date funds. These funds are comprised of several other funds that make up a well-balance portfolio. The manager—not you—decides what the exact mix of socks, bonds, commodities or cash needs to be, and then adjusts it over time. Simply choose a target date that matches your anticipated retirement date.

“Target date funds are ideal for younger folks because their financial situation is generally not complicated and they don’t need a lot of customization that someone in their 40s or 50s might,” says Pam Hess, director of retirement research with Hewitt.

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  • Kimberly Newman


    Love the magazine.

    My husband and I need help quickly to shelter $170,000 in severance and sales bonus from our 2008 tax liability. We own a house and have 401K accts.

    We aren’t sure if we want to tie up all the money because we dream of owning a small business or rentals. Some have suggested Roths but that won’t help much?

    We are novices, and we tried to seek help from a local planner but he tried to get us to buy strange insurance policies. We are 42 and 45 years old with one 16 year daughter. I think an investment of some sort will yield much greater gains for our retirement or future business opportunities.

    Thank you,

    Kimberly and Rudy