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The Importance of Investing Early

The Importance of Investing Early - The Importance of...

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Unformatted text preview: The Importance of Investing Early Why Invest? Social Security trust fund will run out in 2040 (CNN) Average age of retirement eligible for social security has increased to 65, and will be even higher by the time we retire. (AARP) Can no longer rely on pensions, only 20% of workers receive them today At this point, we are responsible for our own retirement money USA Today Poll Only 60% of working people are saving for retirement More than half felt that they were behind 32% categorized themselves as "Way behind schedule" The Importance of Early Investment Interest rate is less important than years invested or amount invested $900/month @ 7% interest for 30 years=1.1 million dollars What to Invest in Invest in stocks long term The yearly growth average since 1926 for stocks=10.4%, treasury bills=3.7% (USA Today) 401 k plans offered at work (most match your input up to 36% IRA (Individual Retirement Account) IRA's Traditional vs. Roth Traditional IRA's are tax deductible, distributions are taxed as normal income, mandatory distribution at 70.5 years old Roth IRA's are NOT tax deductible, no taxes or penalties for distributing at any time, no mandatory distributions when you reach 70.5 years old Common Advice Keep your portfolio diverse (Enron) Watch your portfolio closely Think long term In Review The social security trust fund is due to run out in 2040, and pensions are a thing of the past. We are responsible for our own retirement at this point Investing early in stocks with a diverse portfolio is the best way to save for retirement with great results ...
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