Retirement?
how do you retire and live off your nest egg and what equitys and amount would you have to have to do that.
Public Comments
- Your first option should be to fund fully a retirement account. If you do this, and you have extra cash, then one of the best things you can do is open a DRIP Plan. Go to : low-cost-stock-recommendations .com Click on the "DRIP's" Button on the Navigation Bar These powerful investment plans are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street. They are perfect for small investors, as well as big investors. They are safe and allow you to not care about whether the market is going up or down. They are a must for any serious investor. If you decide you are interested in DRIP Plans, click on the advertisement on the same page "$4 to purchase stocks". This will answer your next question, which is, How do I get started? and what is the least expensive way to get started? I strongly recommend looking into it. They are great plans. Good Luck
- Although Drips can be nice (as mentioned by the other poster), they should not be the bulk of the average person's retirement fund. There are much better options when taxes are taken into consideration. This is where your money should go, and in this order: -401k Match. If your company matches the first x% of your 401k investment, then put in x%! Don't pass up free money. And anything you put into a 401k is tax deductible. -ROTH IRA. You can put up to $5,000/year into a ROTH. This money will grow over the years and be completely tax free when you withdraw it. This is the best place to get a ROTH: https://personal.vanguard.com/us/accounttypes/retirement?Entry=Homeoffer02 -401k beyond the match. After maxing out your ROTH IRA, put more money into the 401k. Most companies allow you to put $15,500 into a 401k this year, along with the ROTH that is a total of $20,500 which is more than most people invest. These investments should be the bulk of your retirement fund since they are greatly tax advantaged. If you were 60 and wanted to retire today, you would want about $1,500,000 in assets to be secure. Many experts say you should withdraw only 4% of your assets every year in retirement to make sure it lasts til the end of your life. 4% of $1.5M is $60,000/year, wich is not a bad living. While you are withdrawing 4%, your investments should be growing a little faster than 4%. This allows you to withdraw slightly more the following year... this is good because you'll need the extra money to keep up with inflation. Now, how do you get to $1.5M? Invest agressively (stock funds) when you are young, and slowly change to safer investments (bond funds) as you approach retirement age. If you average 11% (the market average for the last 85 years) and invest $4,000/year starting at age 25 this is what it looks like: Age 40: $150,000 Age 50: $500,000 Age 60: $1.5Million Compound interest is a great thing. But in order for it to work for you you need to get it time to work, so invest as soon as possible! If you are young now then you will need much more than $1.5M to retire because money will be worth less (due to inflation) as you get older. To keep up, you will need to invest more than $4,000/year or start at $4,000 and raise your investment 5% every year to beat inflation (ie invest $4,200 the second year, $4,400 the 3rd...). Recap: Invest early, invest in stocks while young, invest more in bonds while old, be sure to take inflation into account. Best of luck in your investment ambitions!
