The Future

Investing For Retirement

At different ages, what should I do to help fund my retirement and other savings goals, such as acquiring my first house, car, etc.?

One of the most important generally accepted principles to help you finance your retirement is to begin investing early. So in your twenties, you should set up an IRA or 401(k) retirement account, and participate in your employer’s retirement account matching program, if available. It is probably also a great idea to set up after-tax investment accounts. In your thirties, while you plan for such long-term goals as retirement, financing children’s education, and short-term goals such as changing houses, realize that having investment accounts—indeed, any substantial savings accounts—may help you access capital, such as for a mortgage, and allow you more choices later in life. At later stages in your life, many people begin to switch from riskier or higher-growth investments to those that may provide more predictable returns. Many people in their sixties and beyond reinvest earnings on investments so as not to spend the proceeds of previous investments, and time the maturity dates of certain bonds or other fixed income investments such as CDs so that when better investment opportunities present themselves, capital is available to take advantage of them. At this stage, because your income is reduced, your tax liabilities are also reduced, so you can earn returns for many years without having tax liability as your principal grows (for pre-tax retirement accounts). When you need the money, you may withdraw it from your pre-tax accounts and pay reduced taxes at that time.


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