Prepare for retirement by learning how to invest depending on your age. It is never too early, or too late, to begin preparing for retirement. There are many different ways to invest for retirement. Choosing to invest considering your age can be beneficial to your investment plan.
- In your 20's, you should begin thinking about your retirement. Take advantage of any retirement plan your employer offers. Matching contributions from employers is actually free money for your retirement. This is a benefit many over-look thinking they have a long time before they will have to worry about retirement. However, this money will have a snowball effect, earning interest which will also earn interest. For every dollar you invest in your retirement now, you can expect to have two or three dollars by the time you hit 67 years of age.
- In your 30's, you should contribute the maximum allowable amount your employer's retirement policy will allow. You can also take advantage of private 401K and consider investing in real estate. Real estate mortgages are normally 15 to 30 years in length. By the time you are ready to retire, the mortgage should be paid off and you will have a valuable nest-egg for your retirement, and may be able of retire early depending on your age.
- When you hit your 40's, you should still contribute as much as possible to your employer's retirement program. You should also increase your contributions to your 401K plan and continue to pay off any outstanding mortgages.
- In your 50's, you need to assess where you are and where you want to be. If you are behind in your retirement savings, strive to make up for it. Diversify your portfolio so that you have about two thirds of your investment in safe, low-risk investments, and invest the last third, or what you feel you can afford to gamble with, in higher risk stocks and investments. You are on the final stretch to get all of your mortgages and credit paid off. When you retire, you want to be as debt free as possible so your money will go further.
- In your 60's, plan for your imminent retirement by paying off as much as possible. If you have a car payment, credit card debt, or are paying interest on anything, plan on getting those cleared up before you hit retirement age.