How is everyone planning for retirement?

[weed wacker 2]

What are you guys doing for retirement? I am only 22 but I need to start planning for retirement.

[JB1]

probably will die early, and the wife already said she's putting me under the compost pile, I aint saving no money for her.

[lawnspecialties]

If you are a full-time business owner, I would first suggest a Roth IRA which allows you to deposit up to $5,000/year for a single guy ($10,000 for a married couple). This is NOT a tax-deductible contribution but all the money (including the gains) is tax free upon retirement.payup

If you want to put away even more, a SEP (self-employment pension) allows you to put away close to $50,000/year and is tax deductible. Of course, all the money is taxable upon retirement.

Find a retirement calculator online and look how $5,000/month grows like crazy over time. If you start in your mid-twenties and stick with at least a full Roth, you'll be worth well over a million at retirement.

[Roger]

Good for you to begin financial planning. I read an article a few days ago, but can't find it right now about those not prepared financially for retirement. I think those prepared for retirement by age 65 is less than 25%. In other words, the vast majority of people don't have the financial resources needed to take leave from the work force. It is a pitiful situation that so many failed to plan for the day when they want to stop working, but are financially unable to do so.

Regular, systematic contributions -- get started early, keep the contributions going. Work with somebody who knows best how to manage these funds for you. Markets change and most people are not enough interested, or well enough informed to make proper decisions.

[weed wacker 2]

Good for you to begin financial planning. I read an article a few days ago, but can't find it right now about those not prepared financially for retirement. I think those prepared for retirement by age 65 is less than 25%. In other words, the vast majority of people don't have the financial resources needed to take leave from the work force. It is a pitiful situation that so many failed to plan for the day when they want to stop working, but are financially unable to do so.

Regular, systematic contributions -- get started early, keep the contributions going. Work with somebody who knows best how to manage these funds for you. Markets change and most people are not enough interested, or well enough informed to make proper decisions.

Would you invest in stocks or start an IRA. Both would be beneficial I imagine but I am not wanting to invest too much in stocks so soon.

[JB1]

Would you invest in stocks or start an IRA. Both would be beneficial I imagine but I am not wanting to invest too much in stocks so soon.

and why would that be, look at cat, deere, cummins and even ford and look what there stock has done since there low.

[weed wacker 2]

Good for you to begin financial planning. I read an article a few days ago, but can't find it right now about those not prepared financially for retirement. I think those prepared for retirement by age 65 is less than 25%. In other words, the vast majority of people don't have the financial resources needed to take leave from the work force. It is a pitiful situation that so many failed to plan for the day when they want to stop working, but are financially unable to do so.

Regular, systematic contributions -- get started early, keep the contributions going. Work with somebody who knows best how to manage these funds for you. Markets change and most people are not enough interested, or well enough informed to make proper decisions.

Would you invest in stocks or start an IRA? Both would be beneficial, however I am not wanting to invest too much in stocks so soon.

[weed wacker 2]

[QUOTE=JB1;3241954]and why would that be, look at cat, deere, cummins and even ford and look what there stock has done since there low.[/QUOT

This is true.

[Roger]

WW -- your questions are exactly why an adviser is needed. There is MUCH, MUCH more to the story than just choosing stocks over an IRA. Everybody's needs, goals, and resources are different. One answer to that question might be right for one person, and wrong for 99 others, or visa-versa.

[topsites]

...
You can invest in stocks AS an Ira...

I'm not sure exactly how it works, but I do know it can be done.

It's also more to the story than just picking a stock...

If you are a full-time business owner, I would first suggest a Roth IRA which allows you to deposit up to $5,000/year for a single guy ($10,000 for a married couple). This is NOT a tax-deductible contribution but all the money (including the gains) is tax free upon retirement.payup

I ain't never heard of that, it might be tax deferred but there ain't no such thing as a free ride.
So before anyone makes a choice they might later regret, I would second the recommendation of speaking with an adviser / accountant.

[topsites]

To clarify that bit...

The Roth IRA *might* have certain tax exempt provisions ...
You'll want to speak with an adviser.

Because a Roth IRA contribution can not be deducted from one's income,
hence one pays the taxes on it as income, upfront.

Not entirely a bad idea, but it's not tax free.

[mdlwn1]

Would you invest in stocks or start an IRA? Both would be beneficial, however I am not wanting to invest too much in stocks so soon.

An IRA just means individual retirement account...doesnt matter wheather or not you buy stocks, bonds, cd's or whatever...its still an IRA. As for where to put money, it depends if you want it to go up or not. Right now..the bank will basically pay you nothing. The actual value of your dollar is going down. That kind leaves you without too many choices. Either invest it in your business or put it in some kind of market. Corporate and municipal bonds are really the only place to go if you dont want to be in the stock market.

Roth IRA..pay the taxes now...not when you retire. Pro's..when you retire...it's all yours
IRA you do not pay taxes now...you get to earn interest with the governments money which will be considerable over 40 years.

[lawnspecialties]

....This is NOT a tax-deductible contribution but all the money (including the gains) is tax free upon retirement.payup...

To clarify that bit...

The Roth IRA *might* have certain tax exempt provisions ...
You'll want to speak with an adviser.

Because a Roth IRA contribution can not be deducted from one's income,
hence one pays the taxes on it as income, upfront.

Not entirely a bad idea, but it's not tax free.

The Roth has NO tax exempt provisions when invested. But EVERY gain it makes over the years is completely tax free.

The Roth IRA is absolutely the best retirement account out there. Invest it in a good mutual fund with a good long term track record.

[TerraManusContracting]

The Roth IRA is the best bet of all "traditional" retirement plans out there. It is better than a traditional IRA because it is taxed at today's rates, and we all know that tax rates only go up. As previous posters have stated, CDs are worthless. Interest rates are so low that gains are minimal, and when you factor inflation and taxes, your money is going backwards. However, even with the Roth IRA, your money is not insulated from market forces. Ask anyone who had a decent IRA built up prior to 2007, they got slammed in this latest go-round. Chances are, in the time before you retire, there will be another downturn, and whatever accumulations you have in IRAs will get slammed as well.

Is there an answer to this? You bet.

In my opinion, retirement funds should not be subject to market forces. You can do whatever you want with your other money, but the key of retirement funds is SAFETY. If you were jumping out of an airplane, would you assume any risk at all with your parachute? I love to skydive, and the answer is hell no.

So how can I invest retirement funds in a zero risk, yet guaranteed return avenue of investment?

Annuities. Specifically, the variable annuity from Prudential. It is the best variable annuity on the market, hands down. There are fees associated with the VA, but your money grows at a GUARANTEED 6% rate every year, tax free. In the VA, your money is put into mutual funds managed by the very best fund managers in the world. You have two account balances; the "true" balance, and the balance GUARANTEED by the company you purchased it from. Truly, you don't even have to monitor your money in an annuity; you have a contract with the issuer for a guaranteed growth and payments to begin at a contracted date. They have the best fund managers in the world managing your money because, if the market drops, the issuing company is on the hook, not you.

The best part? Annuity owners sleep better at night.

[lawnspecialties]

With all due respect, the variable annuity is one of the biggest rip-offs in the "investment game". Their sales commissions are rediculously high, they have higher fees, and they create excessive tax burdens. A new study recently showed it takes $100,000 in a variable annuity to generate the same income as $60,000 in an immediate payout annuity.

Variable annuities are sold by insurance people, not financial planners. Run from these things as fast as you can. Unless you are one, Terra. :nono:

As for a Roth, IRAs are investments for the long term. The market has highs and lows. When you're within a few years before retirement, you move your investments from higher risk stocks to extremely low risk stocks and/
or CDs.

[topsites]

The Roth has NO tax exempt provisions when invested. But EVERY gain it makes over the years is completely tax free.

The Roth IRA is absolutely the best retirement account out there. Invest it in a good mutual fund with a good long term track record.

I'm not disagreeing the Roth is the best for you but it depends on one's financial strategy.

Me, I have no IRA.
Why?
Because simplicity rules, that's my strategy.

[mdlwn1]

Buy fertilizer stocks if they ever dip......more people in the world....more food production.....more fertilizer........plus..as the dollar falls...they go up even if sales are weak

[Fvstringpicker]

You need to do some no, a lot of research. With IRA, Roth or traditional, you need good diversification of your investments. Unless you want to spend considerable time watching your investments, stay away from individual stocks in your retirement portfolio. As much as you hear about the market's long term performance, for every Deere, CAT, and GOOG there's a GM, CITI, and Enron. And although Deere, Cat and others may be well above their lows in March, they are well off their highs. For equity or debt investments, stick with mutual funds or ETF's. I put some money into good rental property years ago and its all paid for. Its been good to me in my retirement.

[dtelawn]

I think many of you guys are very savvy about these issues. It gives our industry true strength.

I do have to make a point though. On the issue of $5000 a month into anything. This year I have done very well but there is no way the average guy can save $5000 a month. If you are able to store that kind of cash, you have no finacial worries. I mean $60000 a year is a great GROSS income for most households..

[wvbrian]

I have my Roth IRA in index ETFs and sleep better at night than if I had my Roth in individual stocks. Indexing spreads the risk , but tracks the perfomance of the overall market. There are also alot of companies that now have target retirement funds where you pick your estimated date of retirement, and the funs becomes more conservative over time as that date approaches. I recoomend these for novice investors as they offer diversification with just one fund. FFFGX for example is Fidelity's target date 2040 retirement fund,just set it and forget it.

[topsites]

I tell you folks one thing thou...

Before I waste a ton of time trying to figure out this stock market thing,
the first place to put the money is one's own business.

That's where my stock belongs, in parts and supplies for the business.
Because being in debt doesn't work.

[mdlwn1]

I tell you folks one thing thou...

Before I waste a ton of time trying to figure out this stock market thing,
the first place to put the money is one's own business.

That's where my stock belongs, in parts and supplies for the business.
Because being in debt doesn't work.

So sayith the shepard..............

[lawnspecialties]

I think many of you guys are very savvy about these issues. It gives our industry true strength.

I do have to make a point though. On the issue of $5000 a month into anything. This year I have done very well but there is no way the average guy can save $5000 a month. If you are able to store that kind of cash, you have no finacial worries. I mean $60000 a year is a great GROSS income for most households..

Hey dtelawn.

That $5000/month was a typo. Earlier in that same post, I said $5000/year and then later put $5000/month. If we could put away $5000/month doing lawn maintenance, then everybody would be doing it.

[Ronniecoleman]

I have a different approach to saving money, I'm 31 years old and 10 years ago found a part time job to supplement my landscaping. I was lucky that the job offers full medical and dental benefits as well as matching 401k and stock plans. So anyways since I started at this job I have put $25 into there stock program and they match that every paycheck. With the 401k I put in $50 every pay check and they match that until a certain dollar amount everyyear. The remaining money I split 50% into a cd for short term savings and the other 50% remaining is mine to spend on whatever I want.