Page 61 - Book10E

Take this little quiz to remind you of important things to remember as you enter each decade of your life. If you can’t remember the answers, look back through the previous chapter to find them .
1. When is the best age to start saving for retirement?
2. If you begin investing $10 a day in an account that pays 8% interest when you are 20 years old, how much more money will you have at 60 years old than you would if you waited until you were 40 years old to start saving?
3. How much do financial management experts recommend you save as an emergency fund in case of an illness, disability, job loss, or other unforeseen event?
4. What does the IRS allow you to do once you reach age 50 to help make up for any savings you weren’t able to make in your earlier?
Your 50s and 60s
By the time you’re in your 50s, your kids will probably be on their own and you’ll possibly be at the highest income level of your career and can really focus on building your retirement assets.
By this stage in your life, the FDIC recommends that you continue putting as much as you can into IRAs, 401(k)s, Keoghs and other retirement savings accounts. Once you reach age 50, you can make “catch-up” (extra) contributions to IRAs, 401(k)s and other retirement savings accounts to help make up for any savings you weren’t able to make in your earlier years. Don’t count on this, though, as a reason not to save earlier. Statistics show that if you aren’t in the habit of saving in your early adult life, it is likely you won’t save when you are older. The sooner you start saving, the better.
Financial Planning for Retirement 51