How many times have you heard that you should start saving for retirement as soon as possible? I know I’ve heard it tons of times, but that advice is no good if you don’t know where or how to start. Obviously, most people will have loans coming out of school, so it’s a good idea to pay those off first. That being said, T. Rowe Price recommends that anyone in their thirties save at least 10-15% of their annual salary. Another important idea is taking advantage of employers matching your savings. Most employers will match 50 cents per dollar on what you save, so it is important to use this to your benefit. Another important idea is risk. When you are younger, it might not be a bad idea to take a somewhat riskier approach that relies more on equity than on fixed income. As you get older, the opposite becomes more and more the recommended method. It is also a good idea to take advantage of a Roth IRA, especially if you have hit the limit on what your employer will match. This is a great way to protect against future tax rates because Roth IRAs are tax free, assuming you’re at least 59 ½ years old when you withdraw.
For more detailed information, look at these three articles
by Rob Wildhack
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