Judy Hucka, editor of the BetterInvesting Puget Sound Chapter Newsletter is our guest blogger today. BetterInvesting is a national, nonprofit association whose mission is to provide sound investment information, education, and support to help create successful investors. Instructors are volunteers and receive no monetary or financial payment or gain from your participation. BetterInvesting and the Puget Sound Chapter offer in-person and online classes for beginning, intermediate and advanced investors. For more information about BetterInvesting: www.betterinvesting.org.
OK, OK, you’ve probably heard this before. But it’s important! According to the U.S. Government Accounting Office, about half of households age 55 and older have no retirement savings—and up to two-thirds of workers may not have saved enough to maintain their standard of living in retirement.
You can start now to improve your chances of being in the one-third who do have enough to be financially secure when they retire.
Saving and investing when you’re young or even in middle age can give you a much better chance of being able to retire comfortably in your 60s (or maybe even earlier). And with things like employer-sponsored 401(k) plans and broad-based index funds (rather than buying individual stocks) investing is easy and doesn’t take much time at all.
Here’s an example of what saving and investing when you’re young can do. Let’s say you estimate you’ll need $1 million at age 65 to be able retire. (And believe it or not, a million dollars is a realistic number for many people.) Assuming you can earn a 10 percent rate of return by investing your savings:
- If you start at age 25, you would need to save and invest only $158 a month.
- If you wait until age 35 to start saving and investing, you’d need $442 a month.
- If you wait until 45, you’d need $1,317 a month.
- If you wait until 55, you’d need nearly $5,000 a month.
If your company offers a 401(k) plan, that is the simplest way to save and invest for retirement. More and more companies are offering simplified and low-fee index funds as part of their 401(k) options. And many companies match what your put into your plan up to a certain dollar amount – free money for you!
If you don’t have a company retirement plan, broad-based index funds, such as those that mirror the S&P 500 index, are a very easy way to invest—simple to set up and requiring very little time to monitor and manage over the years. They are well-diversified and many studies show that they tend to provide better overall returns than individual stocks or complicated actively-managed mutual funds. There are many low-cost and online companies that can help you get started – Charles Schwab, Vanguard, Fidelity, etc.
So what are you waiting for? Get started now!
As part of national Money Smart Week, the Seattle Public Library is partnering with the Puget Sound Chapter of BetterInvesting to offer a free class:
Investing for Financial Independence: Steps to a great (and maybe early) retirement. Saturday, April 6, 2-3:30 p.m., Seattle Central Library, 1000 Fourth Ave., Seattle. WA 98104
Instructor Gary Ball will discuss different ways to invest during your working years. He’ll show you how to set up an investment plan that you can use throughout the different stages of your life – 20-40, 40-50, and after 50. This plan will let you retain most of the investment returns and not pay a broker or financial advisor.
This year, other Money Smart programs at SPL include:
- Home Buying 101: Central Library on Wed April 3, 2019, 3 – 4:30 p.m.
- Identity Theft Solutions:
- University Branch: Fri April 5, 2019, 12 p.m. – 1 p.m.
- Greenwood Branch: Sun April 7, 2019, 1 p.m. – 2 p.m.
- Northeast Branch: Mon April 15, 2019, 6:30 p.m. – 7:30 p.m.
- Central Library: Sat April 20, 2019 12, p.m. – 1 p.m.
- Student Loan Navigation Event: Central Library, Sat May 4th, 2019, 1 – 3:30 p.m.
For more info, take look at our full line up here: https://post.spl.org/2ur59XD
Also, check out our resource lists on the following topics:
Money Smart Week®, March 30-April 6, 2019, is a public awareness campaign designed to help consumers better manage their personal finances. Organizations across the country, including many public libraries, are offering free programs to people of all ages and income levels on all facets of personal finance. For more information about events, visit www.moneysmartweek.org.