Friday, 3 August 2012

Retirement Savings at Every Age

****As seen on Steven and Chris****

 We all know it's never too early to start saving for your retirement, but how you invest should change as you get older. Our finance whiz, Rubina Ahmed-Haq, breaks down what you should be doing with your money, when, according to your age.

In Your 20s... You may be carrying large student loans or have just landed your first full-time job. Paying down debt is financial priority No. 1, followed by setting up your retirement savings system.
Retirement savings goal: Invest 10% of your after-tax income in retirement savings: 80 percent moderate, 15 percent conservative and five percent cash.

In Your 30s...
You're likely juggling a lot of big expenses—house, marriage, baby, mortgage—and feeling stretched financially. Don't let that derail your retirement plan. Be sure to borrow money intelligently (a.k.a. only what you can afford) and try to balance your financial obligations.
Retirement savings goal: Continue to invest 10% of after-tax income but rebalance your portfolio by moving more money into fixed-income investments: 75 percent moderate, 20 percent conservative and five percent cash.

In Your 40s...
Maybe you've begun investing for your kids or are dealing with the costs of home renovations and a growing family. Fortunately, your 40s will likely yield your maximum salary. Speak to a fee-only financial planner to make sure you're getting the most out of your income. 
Retirement savings goal: As your salary grows, so too should your retirement savings plan. Check your retirement fund annually to make sure it's well balanced: 60 percent moderate, 35 percent conservative and five percent cash.

In Your 50s & 60s...
Retirement is on the horizon, and it's time for you to start thinking about what it will look like: How much money will you require annually? Where will you live? Maybe you should consider downsizing.
Retirement savings goal: At this point, your retirement investments should be virtually risk-free: 50 percent conservative, 40 percent moderate and 10 percent cash. You are too close to take any major chances.

Watch the episode here: Retirement Savings at Any Age

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