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PrintMore Bang for Your Buck: Preparing For Retirement
Reported by:
Producer:
Laura Garrigan
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Your retirement should be a relaxing time. But unfortunately, it turns out few young professionals have a plan when it comes to their financial future. So in tonight's More Bang For You Buck, we'll show you how to build a solid nest egg.
Mastering a favorite hobby...
Or spoiling your grandchildren.
How would you like to spend your retirement?
Michelle Hovorka would like to travel.
She says,
"When I get older I don't want work for the rest of my life so I eventually want to have a comfortable amount of money so that I can enjoy my retirement and not have to worry about finances."But if you don't want to worry, you have to start planning now.
And for most young people, that begins with their first job.
"Everybody should participate in a 401 K."
And the younger you are, the more risks you can take.
Professionals in their thirties and younger should invest in 100 percent stocks.
"
When you’re going for growth, you can assume a little bit higher risks."Think long term and diversify.
You may even want to consider an I-R-A.
"As it stands right now, you can contribute $3,000 pre-taxed to an ira every year. Everybody should do that."
What you don't want to do is rely too much on social security.
Many experts predict Uncle Sam could be bankrupt by the year 2037.
So if you're in your twenties, you may be out of luck.
Also avoid mutual funds and bonds.
Right now, interest rates are at a three year low.
"It's not a great time to put money into fixed income, not a great time to buy bonds. It's a better time to buy stocks."
Stocks worth watching include Aegon, Health Management Associates, Pfizer, Safeco and Stryker.
Michelle is taking some important planning steps of her own.
She's opened a savings account, and for the first time, she's started to invest in her golden years.
She says,
"I know I need to start looking into it even though I'm young. I need to plan for my future."As you get older its important to reassess your goals.
The closer you get to retirement, the more your portfolio should be geared towards bonds that produce a fixed income.
FOR MORE INFORMATION:
Contact: lmartinez@wsvn.com