Question: Help! I am 50 need. If she's among the
with no savings!! How two thirds of Americans
can I start? Need any and Canadians who expect
and all advice. Thanks, to continue in her
Dinah current lifestyle after
Answer: Dinah sure has a retirement, she can
lot of company. Recent expect to need about 80%
Congressional research of her preretirement
showed that only 40% of income. That's a
workers have a plan in surprise to many people.
place for retirement.
Even among those over
age 55, only 47% had Where will she find that
retirement accounts. And much money? Dinah should
the median value of the begin by finding out
account was less than about any existing plans
$25,000. So a lot of she may have through
people need to begin past or present
saving for retirement. employers. Even if she
doesn't have any private
company pension, she'll
The first step for Dinah be eligible for social
is to try to get an idea security.
of how much money she'll
Once Dinah has some idea purposes, I'd assume
of how much income that Dinah should be
she'll need and what's able to safely get about
already available she 7% in income from her
can calculate how much savings each year.
additional she'll need That's a realistic,
to provide. For conservative long-term
illustration, let's rate.
assume that she'll need
an extra $10,000 in To find out how much
income each year. savings will be required
to generate the income,
How much will she need just divide the income
to save to get that desired ($10,000) by the
income? We could go rate of return (7% or
through a lot of 0.07). In this case
discussion and Dinah would need about
complicated formulas. $143,000 to produce
Whole books have been $10,000 in income each
written on just this year after retirement if
subject. But for our it earned 7%.
So how does Dinah begin does the same or better
to save that much money? next week a new habit
Much of what she'll need will be starting. Sure,
to do is the same as if more is better. But
she were beginning any actually saving 50 cents
saving program. is better than
complaining that you
Begin by setting some can't save $5.
goals for her savings.
Can Dinah manage to save Once Dinah begins to
$5 each week? Begin with save some money she'll
something simple. She need to decide where to
might not know where to keep it. Here the goals
find an extra $5. She'll are safety and growth.
need to take a look at
her habits and see what
she can change that will Begin with a separate
make $5 available each saving account. Once
week. It will almost Dinah has put money into
certainly require her to the account it should
change some habits. stay there unless she's
moving it to an
Start today. Even if she investment account
can only save 50 cents that's earmarked for her
this week, that's better retirement.
than nothing. And if she
After she has accumlated basics. Your potential
some money in the risks and rewards differ
savings account she with various investment
should periodically move choices. Learn the
some of it to a no-load, differences and which
growth mutual fund. would work best for you.
There are a number of It's really not that
excellent ones complicated. The
available. Historically important investment
a fund of this type will concepts are easy enough
earn nearly 10% per year to understand. There are
over the long haul. local adult ed classes,
online courses and even
Dinah should contribute books that can explain
to a tax deferred the basics.
retirement plan. If she
is eligible for a 401k Dinah is smart to get
plan she should sign up. started now. Yes,
Also begin contributing earlier would have been
to an IRA. Her money better. She might have
will grow much faster if started too late to
she doesn't have to pay guarantee a comfortable
taxes on the earnings retirement. But she can
each year. still make a significant
difference in her future
Dinah should learn some standard of living.
of the investment
