Start early planning for retirement. Preferably this will have started with that first job. Even modest amounts of money when invested will have created large dividends when held over a long period of time. Although,it may be impossible to part with much money at first, college debts, marriage, a new baby will take up most of the salary, but save something. Retirement must not be pushed out of awareness, entirely.
Common sense will tell you don’t just hastily buy into whatever is available, learn about investing and choose a stock that just starting up. In other words, buy while the stocks are still affordable, and watch the interest grow. An example of what could have been: Who among us have not wished we had the foresight to buy into google at its beginning? And those that did are now reaping the rewards for their good investing sense. Or Coca Cola, or General Foods? After choosing that stock, buy something a little more secure, a bond or two. Municipal bonds are often excellent first choices.
Don’t forget about frugality. Learn how to stash away a few dollars from each paycheck and store in an account. Have some ready money that can, from time to time, be lent out in some secure, or as secure as it can be, money market account. With this practice, and stashing the accumulations into savings accounts for retirement, and yes into college funds for the kids – can’t forget about them – and managing money being spent, retirement will be no problem some thirty, forty, fifty years hence.
Of course there is always the savings plans at work. Not all of these may be such a great idea, but nonetheless, look into them. Several different plans are available: 401 (K) – private companies; 457 plans -Public and non-profit type of retirement plans; 403 (b) – education and non-profit for they workers. How do they work?
In 401 (K) plans, the company withholds a portion of each paycheck. For those who doubt their own ability to save, this is an excellent way of saving. In a lucid moment, an employee signs up for this option, and then the money is kept out of their hands. In weaker moments, they will not have the money to spend frivolously. The other plans work pretty much in the same, there may be slight differences, but basically what sets the three apart is in the difference in the companies involved.
There are other good reasons to invest in these company sponsored plans: It saves on taxes. It is taken out of pre-taxed income. It grows and grows untaxed, and then only when is needed later and life and is removed, is the money taxed. Of course there are many ways to save for retirement, but as yet, nothing as been as well accepted as the saving accounts at work. They do have their rules and restrictions, had they not, they would be less secure as genuine retirement choices. Regardless of which choice of saving is chosen, don’t forget about saving until it is too late. Don’t wait until a five or ten years before retiring to begin thinking about it. A surprise shock may await those with such lack of foresight. Retirement may have to be postponed.