I am 38. any suggestion on how to build a nest egg?

Question

I am 38. any suggestion on how to build a nest egg?

Answer 1

Open an IRA Roth account with your bank taking 50 dollars out of your check each week or bi-weekly you're paid. Also if your job offers open a 401K account. Have at least 5 percent taken out each pay period , your job should match your contribution. You'll have a nice nest egg in no time. Good luck!

Answer 2

The best way to approach this is mathematically.

First determine what size nest egg:

What are your monthly expenses? In other words how much money does it take to sustain your current lifestyle on a monthly basis?  Consider all utility bills, food, gas, mortgage, entertainment expenses, car payments, credit cards, other loans, etc.

Do you want to retire living as you are now, or would you prefer a change in lifestyle? Try to estimate those expenses. Always err on the side of caution and assume higher costs. You can never know how bad inflation will be.

When do you want to retire and for how many years? Multiply your monthly expenses by 12, then by the number of years you would like to be retired. Then determine how much time you have between now and then, and divide up your necessary contributions on a monthly basis.

Then build it:

Now, methodology is where you have some room for choices. You can go with a straight savings/IRA/401 account and just sock away the dollar figures. For instance, if your plan is to retire at 65 for 20 years and you determine your monthly expenses at that time will be (fake figure) $3000 a month, then you're looking at a nest-egg of (20x12x3000) $720,000. You have (65-38) 27 years between now and then to save that money, or (27x12) 324 months. So every month you HAVE to set aside approximately (720000/324) $2223 a month. If you have a 401k with an employer contribution match, this will ease the burden significantly.

You also have the opportunity to develop a portfolio of assets that will give you a passive income stream. This can be anything from a franchise to real estate, to starting your own company and so-on. Personally, I prefer this method since once you hit your monthly expense mark in passive income, your retirement becomes infinite (as long as your assets are well managed) and you can will your estate to your family. It's just a matter of what kind of investments you will be more comfortable with. Although, even if you do choose this route I would back it up with savings as an insurance policy.