Saving for retirement isn't glamorous or immediately rewarding, but it's something we all must do, whether just starting a career or edging closer to retirement. You may get a little help from Social Security payments or a company pension plan, but it's up to you to sock away as much as you can now to pay for your retirement years later.
Get started now and focus on the long term. The earlier you get started, the
more time your investments will have to grow. You also have the benefit of
being able to ride out market fluctuations if you keep your eye on your
long-term goal. Establishing an automatic investment plan is a great way to "set
it and forget it."
Take advantage of every opportunity. It's likely that your first and primary
exposure to retirement investing may be through an employer-sponsored
retirement plan, such as a 401(k). Invest as much as you can and take
advantage of matching contributions from your employer. Be sure you also
open an IRA so you can put even more money away on a tax-deferred or
tax-free basis.
Use mutual funds. Mutual funds are a good option for retirement because they
are professionally managed and diversified. You can use several funds to
diversify even further and ensure you're not keeping all of your eggs in one
basket.
Investing little by little over time can make a big difference. Make the commitment to yourself so you can help make your retirement dreams a reality!
Sunday, October 25, 2009
Why Invest in Mutual Funds?
A mutual fund pools the money of many investors to invest in a variety of different securities. Investments may be in stocks, bonds, money market securities or some combination of these. The securities are professionally managed on behalf of the investors, and each investor holds a pro rata share of the portfolio – entitled to any profits when the securities are sold, but subject to any losses in value as well.
More than 88 million people, or almost half of all households in America , invest in mutual funds, representing trillions of dollars in investments. Mutual funds have become the investment choice to reach lifetime goals.
More than 88 million people, or almost half of all households in
The reasons:
So where can you invest your money? The answer for more and more Americans is to invest in mutual funds.
So where can you invest your money? The answer for more and more Americans is to invest in mutual funds.
Professional money management. Mutual funds provide the benefit of having someone else manage your investments and take care of the recordkeeping. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diversification. A mutual fund, by its very nature, is diversified – its assets are invested in many different securities. Beyond that, there are many different types of mutual funds with different objectives and levels of growth potential, furthering your opportunity to diversify. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Affordability. Minimum investment requirements on many funds are low enough that even the smallest investor can get started in mutual funds. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Types of Mutual Funds This section describes the characteristics, such as investment objective and potential for volatility, of various categories of funds. The descriptions are organized by the securities purchased by each fund: stocks, bonds, money market securities, or a combination of these. Because mutual funds have specific investment objectives such as growth of capital, safety of principal, current income or tax-exempt income, you can select one fund or any number of different funds to help you meet your specific goals. In general, mutual funds fall into these categories:
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Saturday, July 25, 2009
How Much Income Can I Expect to Receive From Safe Retirement Investment?
How Much Income Can I Expect to Receive From Safe Investment?
A Historical Perspective on Safe Investment Returns
By Dana Anspach, About.com
Safe Investments Produce Some Investment Income: But It Varies From Year to Year
In addition to capital preservation, when you make safe investments, you also receive interest income.
How much income can you receive?
In 1981 a safe investment (such as a certificate of deposit) yielded 17.2%. For every $100,000 you had invested, you would have received $17,200 in interest income.
In 2003 that same investment yielded 1.2%, or $1,200 of interest income, per year, on every $100,000 invested.
If you retired in 1981, and only invested in safe, interest bearing accounts, you would have found it difficult to maintain your standard of living.
A Historical Perspective on Safe Investment Returns
By Dana Anspach, About.com
Safe Investments Produce Some Investment Income: But It Varies From Year to Year
In addition to capital preservation, when you make safe investments, you also receive interest income. How much income can you receive?
In 1981 a safe investment (such as a certificate of deposit) yielded 17.2%. For every $100,000 you had invested, you would have received $17,200 in interest income.
In 2003 that same investment yielded 1.2%, or $1,200 of interest income, per year, on every $100,000 invested.
If you retired in 1981, and only invested in safe, interest bearing accounts, you would have found it difficult to maintain your standard of living.
Below is a table that shows you the approximate amount of interest income you would have received each year since 1973 for every $100,000 invested.
Historical 1 Month CD Returns | ||
Year | Return | Annual Income Per $100k |
1973 | 8.4% | $8,400 |
1974 | 11.0% | $11,000 |
1975 | 6.6% | $6,600 |
1976 | 5.3% | $5,300 |
1977 | 5.6% | $5,600 |
1978 | 8.1% | $8,100 |
1979 | 11.5% | $11,500 |
1980 | 13.6% | $13,600 |
1981 | 17.2% | $17,200 |
1982 | 13.0% | $13,000 |
1983 | 9.4% | $9,400 |
1984 | 10.9% | $10,900 |
1985 | 8.4% | $8,400 |
1986 | 6.9% | $6,900 |
1987 | 7.2% | $7,200 |
1988 | 7.9% | $7,900 |
1989 | 9.7% | $9,700 |
1990 | 8.7% | $8,700 |
1991 | 6.3% | $6,300 |
1992 | 3.9% | $3,900 |
1993 | 3.2% | $3,200 |
1994 | 4.4% | $4,400 |
1995 | 6.2% | $6,200 |
1996 | 5.6% | $5,600 |
1997 | 5.8% | $5,800 |
1998 | 5.7% | $5,700 |
1999 | 5.4% | $5,400 |
2000 | 6.6% | $6,600 |
2001 | 4.2% | $4,200 |
2002 | 1.8% | $1,800 |
2003 | 1.2% | $1,200 |
2004 | 1.4% | $1,400 |
2005 | 3.2% | $3,260 |
2006 | 5.1% | $5,150 |
2007 | 5.4% | $5,450 |
2008 | 3.1% | $3,140 |
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