Monday, February 28, 2005

HoustonChronicle.com - If you haven't been saving for retirement, start now

An interesting (non technical) article that reminds people while earlier is better, late is better than never! Start now! HoustonChronicle.com - If you haven't been saving for retirement, start now

"Financial adviser David Bach also advocates that people try to break up the big task of saving for retirement into manageable portions.

Bach, author of the book Start Late, Finish Rich, says there are strategies to build a retirement cushion, regardless of the age people start.

For example, can you wring just $10 a day out of your budget to set aside in a savings account, perhaps by cutting out expensive coffees or carrying your lunch or reducing cell phone use? That seemingly small amount can build to more than $227,000 in 20 years, assuming a 10 percent annual return, Bach calculates. Bump the savings up to $15 a day, and the results grow to nearly $342,000.

Bach recommends that workers aim at putting the equivalent of one hour a day of income into a retirement account. If you earn $50,000 a year, that works out to about $25 an hour, so your goal should be setting aside $25 a day in retirement savings."

2 comments:

Anonymous said...

This is a little off-topic but related. I majored in Business in college and graduated in 1979. I was interested in the stock market at that time but didn't have any money to invest and there weren't brokerages available to the average person like there are today. I got much more serious about investing in 1996 and stared putting money in the market. This semester I started taking an investing course at a local community college because I wanted to get some pointers on trading options. To make a long story short, with online/cheap brokerages available nowadays parents/teachers should be encouraging younger people to begin to invest to get a leg up on the skills/knowledge/confidence necessary to put money away for this reason. I wish I had been able to do that in 1979.
btw, I found financeprofessor.com while researching the Efficient Market Hypothesis, thanks for the site and related info.
Doug

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