Friday, December 11, 2009

Be smart: start saving

By Alma Zhumagulova

Many baby-boomers watched large portion of their savings get lost in the financial crisis. Some of them might now be considering taking their money out of the market to be on the safe side; however, this is not the right move. Even if it will take some time, the market will recover and your savings will go up. So don’t stop investing and try to maximize your contribution, change your investment strategy to more conservative investments, such as certificates of deposit and mutual funds and invest less into stocks.
Now for the younger generation: it is vital to remember that at some point you will grow old and stop working. So be a responsible adult and start planning for your future.
When saving for your retirement you should have at least some picture of how you want to spend your retirement. This will give you an idea of how much you need to save.
Since it is hard to restrain yourself from overspending, “put your savings on autopilot,” i.e. enroll in 401(k), open a traditional or Roth IRA, so that some portion of your paycheck goes directly to your savings account. Roth IRA is probably the most preferable option if you qualify.
Even though it might seem that the retirement planning is such a complicated process you should not procrastinate to start this process. Make decisions, make mistakes and learn from them.
And finally, make sure that you are saving regularly; this will ensure that your investment will steadily grow even if at a slower pace.


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