Question : Is it a good idea to do invest into mutual funds to build a Retirement plan?
I am 25 and at my job I'm not offered any kind of 401k plan. Is it a good idea to invest into mutual funds to build my retirement plan? As they say, start early. What are my options on this?I was refered by a friend to talk to a financial advisor, she is working p/t under primerica with three different investing companies. According to all the numbers I provided, she advises me to use Franklin Templeton Fund Allocation, I don't know much about any avaialble investing companies so I am very lost in terminology and the numbers.
- asked by ykarnay
All Answers:
Answer #1
yes, you get better return for your money
- answered by Super G
Answer #2
Yes that is the road I would take at your age.
- answered by ladytoobusytotalk
Answer #3
yes
- answered by megan c
Answer #4
i suggest putting in as much money as possible andhopefully your company will match that amount. Soby the time you are 60 you will be rich. Goodluck!
- answered by Mom of one
Answer #5
Invest in your country, buy US savings bonds, orCD`s, the bank can help you. they are cheap now,but grow in the long term.
- answered by jonny
Answer #6
You can start an IRA at your local bank or withFidelity Investments. It is best to start earlybut you should consult an investment professionalto determine the best way for you to save forretirement.Good luck!
- answered by Lisa
Answer #7
Yuliya,ANY idea regarding how to start saving foryour retirement is a good idea! At 25, you canafford more risk in your profile. Be agressivewith your investments, and as you get older, youshould typically be more cautious. Good luck! :)
- answered by loving father
Answer #8
Yes, starting early is a good idea. the littleyou put away now will reap massive returns overthe long run. You always need to consider the taxeffeciveness of an investment and the risk toreward ratio. In the very long term say 20+ yearslook for investments that have good, lowvolatility returns and have performed consistentlywell over at least 5 years. Dont be seduced byvolatile, high return funds because losses cantake many years to recover. But whatever youinvest in, it has to always be outperforming bankinterest as a minimum. I think your target returnshould be around 10% per year only varying +/- 3%. there is an argument that being young you canafford to take risks, but most people dont want tobe putting more money into this kind of thing whenthe first one or two went horribly wrong
- answered by mmf
Answer #9
Go for a Roth IRA or Mutual Fund first....once youare comfortable with your savings level vs.spendable income, then start buying savingsbonds.At your age, even $100 per month is going toget you started toward a nice retirement.Once youmake the decision, stick with it and don't waiver.Treat that income as "untouchable" as it is beingsocked away for a rainy day.
- answered by love2jack4you
Answer #10
The best idea even at 25 is to talk to a financialplanner - and have them help you. I am 25 andnever thought anything about retirement or any ofthat until i started working at a financialplanning firm and I have already seen a benefitfrom my actions - and it always help to see thebig picture of things.
- answered by Tracy E
Answer #11
I am not an investment adviser but I've spent alot of time planning my retirement. There aretens of thousands of mutual funds and over 80%don't beat the market. My advice is to look intoan Index Fund that only tries to match the market(thus beating 80% of the people who buy mutualfunds). You have lots of time since you are only25 and *over time* the index has average 10% to12%. This is not sexy but the costs are very lowand if history is any indication, is a proven wayto plan for retirement.Another part of myinvestment strategy was determining how much toinvest each paycheck. I started out with amanageable amount like $25 (ideally, payrolldeducted). Then each time I received a raise,half of my increase went to retirement and halfwas mine to spend. This is easier than it soundsand it is amazing what happens over time.Good luckand stay with it.Mike Honeycutt
- answered by mahoneycuttnc2002
Answer #12
Yes, but start a Traditional IRA or a Roth IRA!Iuse Scottrade for my IRAs because they have noextra fees and many mutual funds they offer are noload and no transaction fees.I recommend startingboth, but one at a time.Use a Traditional IRA whenyou need a tax deduction this year.Use a Roth IRAwhen you don't need a tax deducton this year.Ifyour company offers another retirement plan, lookinto it. 401Ks are not the only company sponsoredretirement plans.PS My best mutual fund has beenbased in real estate, UMREX, Excelisor Real EstateFund.
- answered by Screaming Eagle
Answer #13
try these links hope u'll find ituseful
http://www.lofinance.blogspot.comgood luckfor your investments
- answered by Axl Rose
Answer #14
I've been doing some research on this for a numberof years, and here is what I have found . . . .Yes, mutual funds are a good idea for retirementplanning. To better solidify one's retirementplan, though it is reccommeded that people makeuse of either a traditional or Roth IRA. (Thedifference between the two is in a Roth IRA, youpay taxes on your deposits. The traditional IRA'staxes are paid upon withdrawals. It would makemore sense to open a Roth IRA, since you would bepaying taxes at today's tax rates. There's notelling what the tax rate could be in 25-30+years.) Another area of investment is traditionalstocks. Look for those paying out dividends. Stocks can be risky, like any other form ofinvestment, but companies like Enron don'tcollaspe very often. (For all the Bush-haters,one of the good things he has done is pressurecorporations into more stringent accountingpractices and requiring that they give theiremployees some form of a retirement account. Failure to comply would result in a visit from abranch of the Justice Dept., say like the FBI. Ofcourse the retirement requirement was justrecently announced. So it may take a little timefor that to take effect.)If you use a financialinstitution, like a bank or credit union, thenthey should offer certificates of deposit (CD's). These are good investment vehicles, since you signa contract for a brief period of time and yield ahigher percentage rate than your traditionalsavings or checking accounts. The interest rateis usually determined by the term of the deposit,which can vary from a matter of days to somelasting as long as five years.Money marketaccounts are also pretty good, because they offera better return. Keep in mind, though that youwould need a little more to open one of thesetypes of accounts. Some financial centers requirea minimum of $5 - 10K to open.Annuities are prettygood, because upon retirement, your annuity paysyou a "paycheck". It is a fixed income forhowever long you decide. Of course in order toget this income, you have to pay into it forseveral years. It can be good, though.There aremany other form of investing and saving forretirerment. My advice is decide what type oflifestyle you want to live presently and when youretire. If you think you will spend a lot likefor travellling and spoiling grandchildren, thenyou will need to aggressively save during yourworking years.Finally, get with somone you knowand trust. Maybe you have an old college or highschool classmate, friend, co-worker or familymember. With all those people, it is possiblethat one of them is well versed in investing andretirement planning. Sit down for lunch one dayand ask them to help plan your retirement savings. A word of caution though, some people areprohibited by law from discussing certain aspectsof certain companies. (example: A systemsarchitect from Microsoft couldn't discuss with thepros & cons of investing in Microsoft stock. Itis a violation of SEC regulations . . . . . incase you didn't already know any of that.) Also,you could go to your bank or credit union and askthe teller or manager if they have an investmentcounselor on staff. That person could help youout. You let them know what you want out ofretirement, how much you have to get started, andthey can guide your path.
- answered by naturalbornthriller69
Answer #15
A Roth IRA is an excellent vehicle to startretirement savings. Your contributions are aftertax, but the account will be taxfree goingforward, including your withdrawal 40 years fromnow. An impressive and powerful vehicle. Maximumcontribution are $3000/year. I would suggest aquality, value-oriented stock fund (for example,and example only, two of the funds I use are FAMVXand JMCVX), or possibly a balanced fund, which mixstocks, bonds, and cash. There are a lot of goodbalanced funds out there.Open an account, andstart an automatic monthly withdrawal from yourbank account.You can open a Roth, even if yourcompany offers a 401k.Since your company doesn'thave a 401K, you can also start a traditional IRA. With a traditional IRA, your contributions arepre-tax, the accounts grow taxfree, but you willbe taxed on withdrawal. Again that is 40 yearsfrom now.If you can start putting 8-12% of yourgross income away for retirement, you will bedoing fine.At the age of 25, don't neglectshort-term accumulation needs. I would fullyrecommend that in addition to starting retirementsavings, start putting money away in an emergencyfund. Whether it is 3 months of expenses, or 6months of expenses, or $10,000 or what, try tobuild this amount in a liquid account, say a moneymarket or a money market fund. This is notvacation money, this is not buy a car money - thisis a reserve that is inviolate unless you need it. And if you ever need it, you will be very gladyou have it.Once you have your retirement started,and your emergency reserve filled, then you have awide range of additional accumulation options -whether it is vacation or car money, saving for ahouse, or just trying to improve your general lotin life.I have run on far too long here.Good luckand have fun. You are at just the right age tobe starting.
- answered by TJ
Answer #16
Your advisor is making commissions buyrecommending Franklin Templeton. This is becauseFT is a "load fund." A load fund is acommissionable fund. You are better off investingin a no-load mutual fund instead of workingthrough a broker. You can contact a no-load funddirectly, like Vanguard, T Rowe Price, USAA, etc,and buy through them directly. That way you won'tpay a commission. Regarding the type of account,when you set up your account, you can choosebetween a Roth IRA and a Traditional IRA. Bothhave differing tax benefits. In any case, youcould build a diversified portfolio with eitherfund company. Remember that the point ofinvesting is to make money for YOU, not youradviser.
- answered by misternycboy
Answer #17
Franklin Templeton group charges high fees eitherup front or back-loaded so forget that. You haveto build equity exposure now so yes, buy funds butan advisor probably a bad idea. Go to Schwab.com &the like & see how easy it is to do. Going tostart with Index funds (S&P 500, some world funds)or an ETF (trades like a stock such as EFA thathas global exposure. Those "advisors" bleed you inways you can't see in expensive funds. Have degreein Finace & been investing for myself & others for26 yrs safely & cheaply. WIlling to answer any qsfor free at vegas_iwish@yahoo.com Start now &start right.
- answered by vegas_iwish
|
measure and fulfill your financial needs
