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Asked 7/1/2006
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how can a middle aged person best reach a desired income for retirement other than company match 401k's.? I am looking to reach a goal of atleast greater than 500,000. dollars by age 55 and i am 36 yrs. of age now.I am kind of familiar with retirement calculators,but am confident that there are some individuals that were or are in my shoes that have found proven ways to do so,thanks. |
Answer 1/3 - Submitted 7/1/2006
Maximize your contribution to the 401k if you can afford it - it will lower the amount of federal taxes you pay, plus you should get the full company match offered. Other than that, talk to a financial advisor who can advise you on IRA's that you can contribute to every year. Since any money you put into an IRA would be after tax, you could consider a Roth IRA. But I don't know all the rules that govern this type of IRA.
Answer 2/3 - Submitted 7/1/2006
36 and you want 500 byt the time you are 55 in the bank?
Very doable!!! Depending on what you make and what you spend currently.
Step one max out the 401K
Step 2 invest in equities until age 50, then start moving bits of your portfolio in to bonds.
Step 3 don't invest what you have left over every month. Decide how much you are investing ABOVE the 401K and do that first, discretion spending should be the "extra part of your budget". Not the investing piece.
Answer 3/3 - Submitted 7/2/2006
Max out the 401(k), then fund a Roth (or regular) IRA, then invest.
You can keep some of the investments in stocks well after you retire, since you won't need it until later. Just re-balance each year moving some from stocks to bonds.
Are you sure $500,000 will be enough for you to retire at 55? That's still several years before SS kicks in, and you'll have to pay your own insurance (not cheap) until you qualify for Medicare. Your 401(k) will have a penalty (and taxes due) for early withdrawals (before age 58.5)
You may want to do some more research before you continue on this path.
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