Starting Late What Should I Invest In?

Question

We are 47 years old with no debt except our house, owe about 117,000. Together we make around 65k per year. Have only around 5k saved. How much should I save and in what types of investments to attempt to ensure a nice retirement. I have a 401k at work and they match 5 cents for every dollar I put in. Any help would be greatly appreciated.

Thanks,

Dale

Answer 1

All of the above advice are good. Amazing how yahoo answers are able to pool great persons to answer all our questions.

IMO, here is how a diversified portfolio allocation should be:

- 50% of total equity indebt securities

- 40% of total equity in dividend yielding blue chip stocks

- 10% of total equity for speculation

Answer 2

Max out your 401K .  Open a IRA with a financial institution such as Fidelity or Schwab.  Start with NO LOAD mutual funds. Make monthly deposits and money will go to work immediately.  Then start researching and learning about the stock market. Ask questions and then consider if you have the stomach for long term investing in stock. but that is the way to go for a decent retirement income.

Answer 3

Max out the 401K.

I am not sure what you define as a nice retirement.

But let me assume you want to make the equivalent of what 65k per year can buy you today when you retire.

If you retire at age 65 that gives you 18 years to invest. With a 4% inflation rate your 65k will have to about double to 130K. If you take out 10% percent of retirement money to make 130k a year you will need 1.3 million in your retirement account.

Now consider the on going inflation till you die.

You would need more that 1.3 million to keep up with inflation.

At a10% annulized compound return you will need to save over 25K per year.

If you can't save that much you will need to learn how to invest to get a greater return.

Investing to me is a very personal thing. I developed my own system of investing in stocks.

Learn all you can and depend as much as you can on yourself.

Investing in stock takes me alot of time therefore; I don't recommend investing in individual stocks unless you have the time during the day to watch the market and develope a personal system and discipline.

Stay away form sales fees and high commissions.

I like discount on line brokers for stocks and no-loads mutual funds.

Good luck but don't count it.

Answer 4

Index mutual funds. Look at Vanguard.

Answer 5

Be very careful. So far you've received good ideas.

T. Rowe Price has some great "target funds".  These make sure you're invested at the right level of risk... for you age.

They also have a good "mix" of domestic funds (large, medium and small cap) along with international and bond funds.   It's the best choice for people not inclined to do their investing homework.  They are rated 4 and 5 stars by Morningstar (the top rating service in the USA).

Answer 6

Good advice.  Definitely max your 401k if possible.  And contribute to a traditional or Roth IRA (again if you can afford it).  You should also be thinking asset allocation.  This means what mix of stocks, mutual funds, bonds, and cash savings you should hold.  Generally the less time you have until retirement, the more conservative your investments should be (fewer stock and more bonds and cash savings).  You need to estimate when you will retire and how much you plan to spend each year.  There are several retirement calculators that can help you.  I've included a link below.

http://finance.yahoo.com/calculator/reti...

Answer 7

First and foremost, make sure you're putting at least  the max for a company match in your 401k: in the short term it almost doesn't matter what you sign up for, just GET THE FREE MONEY. Do it now, I'll wait.

After that....really, before you even start, you've got to ask yourself the questions any 20 or 30 year old would(but do it, and answer them, ASAP!!!). For example, How much can you invest? What kind of 401k program do you have? Etc. If it's one of the big ones- Fidelity, Vanguard, etc, you probably have options for free or very cheap advice. Take advantage of it.

But in general, maxing out the 401k is -probably- your best bet, though if you've got one of the rare horror story plans of limited, expensive options you may be better off keeping the company match and putting the rest in an IRA and taxable, low-cost indexes(as I did while with an employer whose program consisted entirely of bond funds averaging 1.2% in fees...)

Answer 8

Wow you're in trouble. Mutual funds or other low-risk investments will not be enough if you ever want to retire... you will need to learn about stocks or forex.

if you are interested in trading stocks check out investopedia.com. If you are interested in Forex, check out babypips.com

Answer 9

Hi Dale,

What are your current investments and choices in your 401k?   Will you get a pension?  How much in your 401k now?  The more details, the better advice you will receive.  Check out www.moneyrec.com.  There are many users with the same type of questions and you will get advice on a site dedicated to investments.  Also, you can search by demographic to see others like you and what they are investing in.  You are at an age where you need to be very careful about where to put your money.  No doubt, you need to start now.

Best of luck!

Bunny