Early Retirement Planning
Planning For Early Retirement Is A Must
It's never too early to plan for retirement. It does not matter if you are 40, 30, 20 or even younger for some people. For those young people who have a full time steady job it would be wise to start a company sponsored 401k. Along with a 401k plan there should also be some money allocated to savings. I suggest putting as much as possible into a savings account. With that income one can transfer money into higher yielding financial products like annuities, stocks, bonds, or mutual funds.
Everyone's risk level is different so for example if you are a high risk taker you would put most of your money allocated to stocks. I suggest not going over 50% because of the high risk in stocks. After that you can put 30% in Bonds and 20% in mutual funds. Now I'm not saying to put all your savings in this breakdown. One will still need to have some high liquidity in case of an emergency such as unemployment, or business bankruptcy. Therefore you should have about 30% of your savings in savings and 70% in other higher yielding financial products like the ones mentioned above.
Now this is only for young high risk takers. Now if you are in your 40's where retirement is much closer then the breakdown should be a lot different depending on your financial condition. At this age a good majority has kids and a mortgage which they have accumulated equity on. As far as kids at this age, people might be planning for their kid’s college education and how they will pay for it. Therefore the level of savings goes down during this age and thus makes planning for retirement much tougher. At this age, I suggest starting an IRA and to put all of your available savings from payroll checks into that account. In twenty years this IRA will yield a good amount for retirement.
So for example lets say you can allocate with your limited amount of savings of $200 a month into your IRA then in twenty years with a 10% annual percentage yield that amount will be $151,878 in twenty years. That’s a good source of income on just a small amount. The amount would be a lot better if you deposit more than $200.00.
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