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Great post -- my wife and I started contributing to our Roth IRA the year we got married. We were able to max them out the first two years and now do an automatic monthly contribution.
If you're thinking of starting a new retirement fund, NOW is the best time to do it. When stocks are low, you've got the best opportunity to make money.
Tim, great article!! and thanks for the tips =)
To add, once you build up a emergency fund in a high yield savings account, go back to the 401(k) and continue adding more (if you can).
How do you calculate your 3 months salary? Is it your straight salary? Or is it essential living expenses (e.g., food, rent, expenses to search for new job).
@Alex, thanks.
@Daniel, Only go back to your 401k once you have maxed out your IRA contributions, which in 2008 is $5000. Be sure not to contribute more than the 401k max either ($15,500 in 2008).
Secondly, I calculate my 3 month fund as the money that gets deposited into my bank account, but you should probably have more than that because temporary health care is expensive.
This is good information. I'm just about to invest money in my company's 403b, but I'm not planning on staying with the company for too long. I can get that money back when I leave the company, correct? (hopefully this isn't that stupid of a question)
This is all great advice, but it's not nearly enough to secure one's financial future.
Each of us has to maximize our money-making opportunities throughout our careers. If that's having a side business, investing in real estate, or investing in stocks, we must have a cash generating operation outside of our day jobs.
Working at one company is the biggest risk to financial security one can have in this age.
Great advice. I'll also add that it's important to open an IRA early because you cannot catch up on missed contributions. Some people worry they don't know how to invest so they don't open one. That's a fear based on misconception--an IRA is an account, not an investment. So put the money in, and you can still figure out how to invest it later.
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