Invest For Retirement

I’m Frank Money, and I’ve got a question for you. What’s the most expensive purchase you’ll make in your life? A car? Nope. A house? You might think so but you would be wrong. Actually, it’s your retirement. Bet you didn’t even think about that answer.

Here’s the scoop on the case for retirement. Retirement is a long way off. Not even in the horizon – but over the horizon and miles away, and life has more curves than a scenic railroad. Well, there’s some good and there’s some bad with that kind of thinking. Since you do have 30 to 40 years before retirement, investing starting right now will pay off in huge financial dividends down the road.

But you have to do your research with investing, matching 401k’s, having a set amount from your paycheck automatically deposited into your savings and so much more. Matching money from your paycheck from your employer is actually free money – and free money is this gumshoe’s favorite kind of money! As for considering retirement to not even be on the horizon, unless you’re planning to be flipping burgers at 65, this detective strongly suggests you start looking beyond the horizon.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Your Young, But You Should Still Start Planning For Retirement

2016_0408-InvestForRetirementHere’s a question for you. What’s the most expensive purchase you’ll make in your life? A car? Nope. A house? You might think so but you would be wrong. Actually, it’s your retirement. Bet you didn’t think about that answer.

I know you’re young. Retirement is a long way off. Not even in the horizon. Well, there’s some good and there’s some bad with that kind of thinking. Since you do have 30 to 40 years before retirement, investing starting right now will pay off in huge financial dividends down the road.

But you have to do your homework with investing, matching 401k’s, having a set amount from your paycheck automatically deposited into your savings and so much more. Matching money from your paycheck from your employer is actually free money – and who doesn’t like free money? As for retirement not even on the horizon, unless you’re planning to be flipping burgers at 65, Talkin’ Money strongly suggests you start looking beyond the horizon.

April is National Financial Literacy Month, Talkin’ Money’s favorite month! To celebrate the importance of being financially literate, we’re going to post financial literacy tips every day.

Roth IRA for Millennials = Huge Benefits.


2013_12-TMTest03Attention Millennial Parents and Grandparents
– Want to do something special for your millennial-aged young person? As we approach tax time, you are familiar with the benefits of retirement savings for yourself and your spouse. Savings for retirement defers the taxes you will pay, and in some cases, like with a Roth IRA, you can avoid paying any additional taxes on the money you invest as well as all future earnings.

Well, the same works for your millennial children or grandchildren. After all, they have their entire lives ahead of them. A twenty-something individual has at least  40+ years until they are of retirement age. Who is better suited for benefitting from growth over time?

Say for example you have a grandson who is nineteen years old in their second year of college we’ll call him Nathan.

Nathan is in his second year of college, and works part time earning about $8500 a year. Did you know that Nathan is eligible for a Roth IRA up to $5500 for the (2016) year? Well, the odds are that Nathan himself can’t afford to invest in his Roth IRA at all, after all, he’s a college student and he needs all the extra spending money he can earn. But his parents or grandparents can help him by gifting him the funds.

We starting doing this with our granddaughter Jessica”, said Maggie S. of Fort Lauderdale, FL, “when she was 17 years old, she worked part-time and earned like under $5000 for the year. We sat down and talked with her about the incredible benefits of compounding interest and dividends and we told her we would do this for her as long as she agreed to not touch the money until she is at least 65. We even had her sign a letter agreeing to this. Now for the last three years, we have deposited between two and three thousand a year in a Roth IRA. We have it invested in a low-cost total stock market index fund.

If you want to create a real legacy with long-term benefits, getting your millennially-aged kids into Roth IRA’s at an early age can be huge.  For example, if for five years, you invest $2000 each year into a Roth IRA, starting when they graduate from high school – here is an example of the potential long-term growth of this very small initial $10,000 investment.

$10,000 investment’s potential growth over 45 years with all dividends and interest reinvested:

Warren Buffet was recently asked, with his vast wealth of investing knowledge, how would he invest for retirement. He stated that he would keep it very simple. Invest 90% in a low-cost S&P 500 Stock Index Fund and 10% keep in cash or short-term government bonds. You can read his comments by CLICKING HERE

So, keeping it simple, with all the market ups and downs, what has been the historical yearly rate of return of the total stock market since 1966? 11.79%