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Learn... Plan for Retirement... Save... Millions!

Steps to Build Plan
  Step 1 - Define goal
  Step 2 - Gather data
  Step 3 - Get educated
  Step 4 - Assess situation
  Step 5 - Develop plan
  Step 6 - Make changes
  Step 7 - Get help
Tools
  Retirement Calculator (Html)
  Life Expectancy Calculator (Html)
  Retirement planner (MSNMoney calculator)
  Retirement planner (MSNBC calculator)
  CNNMoney's Asset Allocation Wizard
Investment Plans
  Employer Plans
  Pensions
  401(k)
  403(b)
  Roth 401(k)/403(b)
  457(b)
  Keogh
  Simple IRA
  SARSEP-IRA
  SEP-IRA
  Federal Plans
  Military Retirement
  CSRS/FERS Plans
  TSP
  Other Investments
  Personal IRA
  Annuities
  Stocks
  Bonds
  Mutual Funds
Develop a retirement plan

Everyone understands the need to save for retirement. What few do understand is just how long it takes to really accumulate the amount of wealth you will need to retire early or to retire well. Everyone hears how important it is to invest in the right funds, and everyone is always talking about how much (or how little) they made on their investments. Unfortunately, no one is talking about how much you will really need in retirement, and how long it will take to save that amount. It's not always how much you manage to invest, but rather how early in life you started saving. The truth is that a small amount invested over a long period of time is the key to accumulating wealth. It simply cannot be done in a short period of time.

To demonstrate this point, consider the following two examples:

1) Jane invests $2000 a year from the time she is 23 until she is 30, for a total investment of $14000. Mary waits until she is 30 and then invests $2000 a year until she turns 67 for a total investment of $76000. They both earn 10% per year on their investments. How much more did Mary save by investing an extra $62000 (and waiting seven years)?

Jane
Mary
Total Invested
$14,000
$76,000
Total Earned (10% per year)
$780,695
$800,895
Total Earned (12% per year)
$1,676,415
$1,366,020

2) Jim didn't have much money so he only invested $25 per month, but did so for 45 years (from ages 20 to 65). At the end of this time, he had invested $13,500 and earned a total of $237,238 at 10% or a whopping $456,365 at 12%. While this might not be enough to retire well, it is a signficant amount of savings considering that he only invested $300 a year. How much could you save?

The real key to investing for retirement is to start as early as possible, and to save whatever you can afford. Everyone can find a way to save $1 per day on their expenses, and thus invest $30 per month. That extra $5 a month, or $2,700 total, would have yielded Jim an extra $91,003 in retirement.

Now that you agree that you must start right now, it is time to develop a retirement plan by following these steps.

Begin with Step One - Define Your Retirement Goal

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