investing

posted by .

You would like to begin (or increase) your savings for retirement. What types of retirement plans (401ks, IRAs, etc.) might be best for your personal situation? Be sure to explain the plan you are interested in and why this is best for you.

26 female
2 kids
single
Annual income 30,000

  • investing -

    Assuming there would be rent paid or a mortgage, the budget would be tight.
    I would accumulate some short term saving in a FDIC insured saving account.
    That money would help to ease the paid should you end up being between jobs.
    Don't put the saving into a free checking account, but look for an account returning a higher rate (see AmtrustDirect banks website.
    Next, take advantage of any retirement programs offered by the employer. If they will match what you put into the program, that would be great. Also check for employer offered tax sheltered programs. Next, try to put $50 a month or so into either a Roth IRA or some type of conservative mutual fund. Some mutual funds can be started with as little as $50 when using an automated plan of investing.

    Got to help, hope this help!

    Have a good evening.

    Brian...

  • investing -

    A person in that situation will barely have any income left to save, but saving anything is always a good idea if one can manage it. The taxable income will be so low that very little income tax may be due. Either a Roth IRA or a 401K, or both, is a good idea. A conventional IRA is not as good for two reasons: (1) no money may be taken out without penalty until age 59 1/2 except under very restricted conditions and (2) the money that is taken out later will probably be subject to a higher tax rate than she is paying now. With a Roth IRA, the amount invested can be withdrawn at any time for any reason without penalty, but the earnings and capital gains should remain invested. The money earned in a Roth IRA will be tax free after retirement -- a major advantage. A 401(k)should be enrolled in if the employer offers a plan to partially match the employee's investment. You are basically throwing away money if you don't accept the matching funds - even if they are in the company stock. Many companies offer matching 401(k)funds, up to a certain limit. There are usually well managed and conservative options for investing the money in 401(k)s.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Long term planning

    You would like to begin (or increase) your savings for retirement. What types of retirement plans (401 ks, IRA, etc.) might be best for your personal situation?
  2. accounting

    Mr. Jones intends to retire in 20 years at the age of 65. As yet he has not provided for retirement income, and he wants to set up a periodic savings plan to do this. If he makes equal annual payments into a savings account that pays …
  3. Business

    Mr Jones intends to retire in 20 years at the age of 65. As yet he has not provided for retirement income, and he wants to set up a periodic savings plan to do this. If he makes equal annual payments into savings account that pays …
  4. Finance

    You are now 30 years old. You plan to retire in 30 years, and expect to live for 30 years after retirement, that is, until you are 90. You want a fixed retirement income that has the same purchasing power at the time you retire as …
  5. finance

    A 45-year-old woman decides to put funds into a retirement plan. She can save $2,000 a year and earn 9 percent on this savings. How much will she have accumulated if she retires at age 65. At retirement how much can she withdraw each …
  6. finance

    Mrs. Kay who is 24 years old plans to retire at the age of 60. Mrs. Kay would like to be able to withdraw $120,000 per year from her retirement account for 40 years after retirement beginning a year after her retirement. She already …
  7. Finance

    You are 45 years of age and your asporation is to retire in 17 years at age 62. Assume you are about to set up a new retirement savings account at a 4% annual interest rate (APR). Based on how you want to live in retirement, and any …
  8. personal finance

    which of the following is a credit management decision?
  9. Math (statistics)

    Suppose an employee starts working after completing her MBA at age 30 at a starting salary of $50,000. She expects an annual salary increase to be at minimum 1%, at maximum 5%, with a uniform distribution. Her retirement plan requires …
  10. Business Math ( Future ordinary Annuities)

    Howard has deposited RM1000 at the end of each month into a retirement savings plan for the last 10 years in his working life. His deposits earned an interest rate of 2.5% per month for the first 4 years and 3% per month for the rest …

More Similar Questions