Showing posts with label retirement. Show all posts
Showing posts with label retirement. Show all posts

Thursday, August 7, 2008

Marrying Up (Gringos marrying 3rd World women)


Marrying Up

Whole Nuther Worlds (or Maybe Nuthers Worlds)

Fred on Everything

June 25, 2008

In countries of the Third World, you often find American men in their fifties or sixties who have wives twenty or twenty-five years younger. In my considerable experience, they seem happy together. However, the arrangement upsets people back in the US. Why, I wonder?

A couple of upsettances are common. The first, from feminists, holds that the man is exploiting the woman sexually (a flattering thought to a man in his sixties; more likely, she wishes he were) or that he wants a docile and pliable woman. The view springs from the common notion among American women that a female who isn’t intolerable isn’t really a man. I suggest that if feminists married more Chinese women, they would learn a great deal about docility and where it isn’t. But, as I have often said, feminists hold women in much more contempt than do men.

The second upsettance, from both men and women Stateside, is that the wife is a brazen-clawed gold-digger. We are left, I suppose, with a docile, pliable brazen-clawed…ah, never mind.

It is perhaps worth noting that marriage has always had a large element of self-seeking, and that women, when they have not actually sold sex, have at least bartered it. This practice is hotly denied, and as hotly pursued.

Take identical twin brothers, introduce one as a recent graduate of Harvard Medical, and the other as a bus driver, and compare their amatory successes. There will be no comparison. Give me a Ferrari and money enough to leave hundred-dollar tips for a beer, and women will line up for blocks outside my door, though I have the appeal of a tree fungus. And while sex is often associated with marriage, not always accurately, it’s far cheaper to rent than buy. Only the crazy marry for it.

What usually happens is that a guy of, say, sixty arrives in Bangkok. Or Manila, Panama, Mexico, Saigon…. He’s looking at ten or fifteen years, and knows it. He has enough money to live well on the local economy. He doesn’t have a whole lot more.

For a young man, such places are candy stores. An old guy has done that, especially the kind of old guy you find in the Third World. Running the bars gets old. He’s looking more to warmth, to not coming home every night to an empty apartment, to having someone to hang outwith in the day. He’ll find buddies around town, but it’s different.

Now, there is a curious social convention regarding guys in the later stages of life. A man of fifty is a silvering figure of masculinity but, somewhere around sixty, he becomes in the public mind a doddering idiot. The phrase “little old man” comes into play. He is either a dirty old man (implying that he has the instincts of all males from the age of fifteen) or a manipulable dunderhead subject to the wiles of any bit of fluff. How pitiable.

Actually he is much more likely to be a bush pilot out of Alaska or ex-Special Forces or a veteran of thirty years in the oil business in the Pacific. Dimwits and weak sisters don’t often show up single in such places. They’ve known the girls and the places where you find girls for decades, some going as far back as BC Street in Koza. They know what is what, and are unlikely to get flensed.

Here it is important to get beyond the often unconscious but powerful condescension that so many have toward Third-Worlders. This attitude urges that women (and men, but we are not here interested in men) in most of the world are ignorant if not illiterate, uncouth and, not to put too fine a point on it, not very bright. This view doesn’t hold up well to experience.

Women are naturally classy unless, like so many American women, they have consciously appropriated the manners of cattle rustlers, running backs, and rabid badgers as an intensely sought ideological goal. In most places women dress well if they possibly can, and behave well. Many are intelligent, which is more important than formal education in being good company. They generally are just plain good people. And they are far tougher and more self-reliant than are cosseted editresses in New York.

So things look pretty good from the guy’s point of view.

From the woman’s point of view, American (and in general First World) men also look pretty good. The cold fact is that American men treat women well. In a lot of countries, the men are—I’m trying to think of a polite euphemism for “real dickheads”; one will come to me in a moment. They beat their wives, cheat on them, treat them like chattels. American men don’t. (There are exceptions to all of this, of course, but they are exceptions.) A gringo wants his wife to be part of his life. He will go to dinner with her, take her desires into account, and treat her as an equal. Koreans won’t.

This is a novel concept in many places but, I promise, it flies really well.

Often the woman will have a kid or two attached, maybe from an earlier marriage or maybe just accidents. Now, in the US certain people get huffy about--oh, the thought!—illegitimate children. How déclassé and other French words. I note that American women are as sexually active as any other. They just believe in abortion more. At any rate, the gringo often figures, hey, they’re kids. Let’s raise them. It’s what you do with kids.

This too goes over really well.

He figures if he’s going to have a girlfriend, or wife, he might as well get a pretty young one. Too young means boring, but for a guy of sixty, thirty-five or forty is young, and not boring. So that’s what he gets. American women hate this like poison, which keeps me awake at night.

For the man, she’s great company, nice looking, usually cooks well and takes care of the house. For her, he’s a nice guy, treats her like a human being, makes sure the kids go to good schools, and provides much-needed security. They actually like each other, which can add a lot to a marriage.

Usually he marries her, if he does, because when he croaks he wants her to have legal or financial benefits of one sort or another. She of course knows this will happen, but so what? The arrangement differs in no obvious way from an American woman’s expectation of getting the life insurance. They appreciate each other. The kids see a dentist, the woman doesn’t have to work in some godforsaken shoe factory, and the guy has a life worth living.

You may not believe me. But I know a lot of these men. None of them would ever, under any circumstances, change.

Thursday, June 26, 2008

The search for higher yields includes finding the trade-offs

June 13, 2008

The search for higher yields includes finding the trade-offs

Savers and investors are scouring the markets for better-performing assets because the yields of most interest-sensitive investments—such as money market mutual funds, certificates of deposits (CDs), bonds, and bond funds—have declined in recent months.

As part of that search, they should consider their options:

  1. Lower their investment costs.
  2. Take on more risk.
  3. Sit tight.

The first option is a good idea in any market cycle. The second one involves trade-offs. The third deserves consideration by all long-term investors.

Lower cost, higher yield

The easiest way to squeeze more from an investment is to simply lower your costs.

"Every dollar you pay in expenses cuts into net performance," says Martin Riehl, principal of Vanguard Asset Management Services™.

Of course, choosing the lower-cost strategy means knowing what your costs are.

For mutual funds, the expense ratio is a key factor. Consider a hypothetical comparison of $100,000 invested in a money market mutual fund with an industry-average expense ratio of 0.86%, versus the same investment in a low-cost fund with an expense ratio of 0.20%. Because the difference in costs over the course of a year—$860 for the average-cost fund, $200 for the low-cost fund—would be $600, you'd be paying more to get the same yield even if the performance of the two funds was the same.

Looking for a competitive CD rate?

Through Vanguard Brokerage Services®, you can invest in and research corporate, municipal, Treasury, and agency bonds; CDs; and other debt securities from across the domestic market. Plus, you can take advantage of Vanguard Brokerage's competitive commissions and fees

Read more »

Also keep transaction costs in mind. If you use a brokerage to purchase individual investments, such as bonds, funds, or CDs, keep an eye on costs by choosing a firm that features low commissions and fees.

Higher risk, higher yield

The second alternative recalls a truism of investing: the link between risk and potential reward. "If you try to boost your yield from fixed-income assets, you should be aware of the additional risks you will face," says Mr. Riehl.

Among the risks you may encounter:

  • Liquidity risk. This refers to the ease with which you can convert an asset into cash. Take, for example, bank CDs, which you can purchase through a brokerage firm or directly from an issuing bank. Although CDs typically offer relatively enticing interest rates if you hold them to maturity, you'll likely pay a penalty if you redeem a bank-bought CD early. You can't redeem a brokered CD early, but you can sell it—and face interest rate risk and likely incur a fee.
  • Interest rate risk. This refers to how the value of bond funds, individual bonds, and CDs purchased through brokerages declines when interest rates rise (and vice versa). A bond, bond fund, or brokerage CD with a shorter maturity has less exposure to interest-rate risk than one with a longer maturity. (You typically would favor longer maturities if you're seeking greater yield.)
  • Credit-rate risk. This refers to the possibility that a bond issuer will be unable to pay interest or repay the principal on time or at all. For example, the U.S. government won't go bankrupt, but a corporation can—and that additional credit-rate risk helps inflate yield. You can seek higher yields by favoring corporate bonds over government bonds of the same maturity.

So, if you’re intent on chasing higher yield, be aware that you’ll probably have to accept more of one of these risks.


Tradeoff: Risk vs. yield

Tradeoff: Risk vs. yield

More credit risk: Government funds -> Corporate funds

More Interest rate risk: Money Market funds -> Short-term bonds (maturity 1-5 yrs) -> Intermediary-term bonds (maturity 5-10 yrs) -> Long-term bonds (maturity 10+ yrs)

Gov. Funds: 1.65%, 2.41%, 3.71%, 4.37% (MM, short, intermediary, long-term)
Corp. Funds: 2.05%, 4.92%, 5.80%, 6.35% (MM, short, intermediary, long-term)

Sources: Lipper Inc.; Lehman Brothers.

1Average Government Money Market Fund

2 Average Money Market Fund

3 Lehman 1-5 Year U.S. Treasury Index

4 Lehman 1-5 Year U.S. Credit Index

5 Lehman 5-10 Year U.S. Treasury Index

6 Lehman 5-10 Year U.S. Credit Index

7 Lehman Long U.S. Treasury Index

8 Lehman U.S.Long Credit A or Better Index

An eye on the wrong ball?

The third option may seem counterintuitive, but it can be particularly suited to long-term investors: Sit tight.

Your long-term portfolio should be based on the types of bonds—in terms of maturity and credit quality—and allocation of assets among stocks and bonds that you would feel most comfortable with, regardless of interest rate movements.

"Before you search for higher yield," says Mr. Riehl, "don't lose sight of the fact that the interest rates shouldn't be the primary driver of your long-term investment plan if your assets are properly balanced among diversified pools of stocks and bonds, and cash reserves—that is, cash you don't plan to spend. In such a portfolio, bonds and other interest-sensitive investments serve primarily as a buffer from the volatility of stocks."

You can see an aspect of the buffer effect over the short term. As noted above, bond prices move in the opposite direction of interest rates. That is why the total return of stocks dropped –6.1% while bonds climbed 6.9% for the year ended May 31, 2008.

Notes

  • Stock returns are measured by the Dow Jones Wilshire 5000 Index; bond returns are measured by the Lehman U.S. Aggregate Bond Index. Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.
  • An investment in a money market mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.
  • Mutual funds, like all investments, are subject to risks. Investments in bond funds are subject to interest rate, credit, and inflation risk.
  • Industry-average expense ratio of money market mutual funds is for non-institutional taxable funds at year-end 2007. Source: Lipper, Inc.
  • Bank deposit accounts and CDs are guaranteed (within limits) as to principal and interest by the Federal Deposit Insurance Corporation, which is an agency of the federal government.
  • Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
  • The hypothetical example does not represent the return on any particular investment.
  • Vanguard Brokerage Services is a division of Vanguard Marketing Corporation, Member FINRA.

Saving for retirement: One investor's success story

June 5, 2008

Saving for retirement: One investor's success story

At age 59, José is living a retirement beyond his expectations.

His lifestyle isn't lavish, but his time is his own. He'll have paid off his home mortgage in a few years. And with savings in excess of $650,000, he feels secure financially. "I wake up in the morning and have to kick myself to see if it's me," the New Mexico native said.

How did he do it? Largely through diligent saving and disciplined investing in his 401(k) account.

A modest beginning and a desire to learn

José (not his real name) began saving through his employer's retirement plan when he was in his mid-30s. "Back then, I didn't really know what a 401(k) was," he said. He learned the basics from an on-site presentation by Vanguard, which administered the plan.

He started small, contributing 1% of his salary. "$15 every two weeks," he recalled. "Then every time I got a raise or bonus, I added it." With additional income coming from two separate pensions as a result of military service, the computer systems specialist was ultimately able to sock away nearly 20% of his salary each year. Employer contributions to his account added even more.

José began with just one stock fund, a riskier option than other single-fund alternatives, such as balanced funds. But he felt comfortable with his choice, given his lengthy time horizon and understanding of risk—a perspective that was quickly tested on Monday, October 19, 1987, when the stock market plummeted 23%.

"I thought, 'Holy smokes, I'm dead,'" he recalled. But he stayed the course and in two years saw his savings surpass their pre-"Black Monday" levels. "That showed me the importance of investing for the long run," he said.

He continued to educate himself about investing, through books and Vanguard.com. As his assets grew, he diversified his portfolio with bond funds and added broad-market index funds. He kept a 70%/30% stock/bond allocation into his early 50s.

"Soul-searching and number-crunching"

Then, the unexpected happened: José was laid off. "I was 54 and not thinking about retiring," he said. "I did a lot of soul-searching and number-crunching."

With his modest lifestyle, military pension income, and the cushion of his sizable retirement savings, José realized that he could, in fact, retire. He recently ran his plan by Vanguard® Financial Planning Services to make sure he was on solid footing and to get advice on paring back his portfolio risk.

"We helped José get to a 60%/40% stock/bond mix that he was more comfortable with and simplified the portfolio to four funds, which lowered its overall expense ratio and made it easier for him to manage," said Michele Mazzerle, a CFP® professional at Vanguard. "Given his income, living expenses, and savings, he's in good shape."

José could begin tapping his 401(k) this year, but he doesn't plan to. He is extremely satisfied with how his savings have added up. "I thought it was going to be a great big deal to save, but it really wasn't," he said. "To be where I am today is really something."

Notes

  • Mutual funds are subject to market risk. Investments in bond funds are subject to interest rate, credit, and inflation risk.
  • Diversification does not ensure a profit or protect against a loss in a declining market.
  • When taking withdrawals from a 401(k) before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.
  • Vanguard Financial Planning Services are provided by Vanguard Advisers, Inc., a registered investment advisor.

Plan for a Roth IRA conversion in 2010

Plan for a Roth IRA conversion in 2010
Special tax savings opportunity for higher income taxpayers

A little bit of advance planning with a Roth IRA conversion can reap big financial rewards down the road.

Tax law enacted in 2006 allows for a special planning opportunity that arises in the year 2010, but only if you take the right steps now in order to take advantage of it.

The Roth IRA is different from a regular or Traditional IRA. Unlike Traditional IRAs that are typically fully taxable when distributions are taken, the Roth IRA provides for completely tax-free distributions once certain conditions are met.

Also, Traditional IRAs are subject to required minimum distribution rules (RMD), which require RMD distributions in the years following the year in which a taxpayer turns age 70 1/2.

These RMD rules force older taxpayers to take out distributions even if they don’t need to or want to take distributions.

The Roth IRA is not subject to the RMD rules, so older taxpayers can take tax-free money out of their Roth IRAs if they want to, or they can choose not to take distributions as they see fit.

The ability for the growth of assets within a Roth IRA to be fully tax-free is a huge benefit.

It is such a tremendous tax benefit that Congress decided higher income taxpayers should be disallowed from contributing to Roth IRAs.

Current tax law prohibits taxpayers with modified adjusted gross income (AGI) in excess of $100,000 from participating in a Roth IRA conversion.

Other rules disallow contributory Roth IRAs for single taxpayers with more than $116,000, or married joint filers with more than $169,000, of modified AGI.

But relatively new tax law has created a special planning opportunity that comes to fruition in a couple of years. A change was made in the tax law pertaining to Roth IRA conversions made in the year 2010.

The change, effective in the year 2010, eliminates the income limitation requirement that taxpayers have less than $100,000 in modified AGI. This change allows higher income taxpayers to do a Roth IRA conversion in the year 2010.

What this means is that higher income taxpayers can begin planning now for a Roth IRA conversion in 2010. Higher income taxpayers should seriously consider funding a Traditional IRA for the tax years leading up to 2010.

Consider the following example. Jeremy earns well in excess of $100,000. He also participates in a qualified retirement plan (401k plan) at work. Because his income is over $100,000, under current tax law Jeremy is not entitled to do a Roth IRA conversion.

Also, Jeremy is not entitled to make a deductible Traditional IRA contribution because he participates in a qualified retirement plan at work. However, Jeremy is entitled to contribute to a non-deductible Traditional IRA.

So, Jeremy funds $5,000 (with the catch-up provision, $6,000 if he is over age 50) into a non-deductible Traditional IRA for the tax year 2008.

Jeremy’s wife, Susan, also funds $5,000 (or $6,000 if over age 50) into a non-deductible Traditional IRA for the tax year 2008.

Jeremy and Susan also fund an additional $5,000 each (or $6,000 each if over age 50) to non-deductible IRAs for the tax year 2009.

Now, Jeremy and Susan have a combined amount of $20,000 ($24,000 if over age 50) in non-deductible Traditional IRAs. For the sake of simplicity, we will assume that both Jeremy and Susan are under age 50 for the rest of this example.

Because of good investment results, the $20,000 they invested in non-deductible IRAs has grown to $24,000 by the year 2010.

Jeremy and Susan then implement Roth IRA conversions, converting their non-deductible Traditional IRAs into Roth IRAs.

They pay taxes only on the $4,000 gain in their IRAs at the time of conversion. Also, the new law gives them an additional advantage in that it allows them to pay the taxes on this gain over two tax years—one-half in 2011 and one-half in 2012.

Many years later Jeremy and Susan both turn age 59 1/2 or older. At this time their Roth IRAs have a combined value of $100,000.

They decide to take full tax-free distribution of their Roth IRAs. They owe no taxes on the $76,000 in gain they realized.

If the money had been in Traditional IRAs, the gain would have been taxable. Jeremy and Susan are in the 35-percent tax bracket at the time of distribution.

They realize that their wise planning years earlier to take advantage of changes in the Roth IRA conversion rules has saved them over $25,000 in federal and state income taxes.

The rules for handling Traditional IRAs and Roth IRAs are so complex that many times you need expert advice and counsel to make informed decisions and avoid pitfalls and tax penalties.

Your particular goals, objectives, facts, and circumstances may dictate steps and decisions that are not readily apparent because of the complexity of the rules that may be involved. We recommend that you seek expert guidance regarding your IRA decisions.

George M. Hiller, JD, LLM, MBA, CFP® is the founder and president of the George M. Hiller Companies, LLC, an investment management, tax, estate, and financial planning firm based in Atlanta, Georgia. He is a member of Kingdom Advisors, a network of Christian financial professionals. ©2008 Crown Financial Ministries Privacy Policy

Thursday, March 20, 2008

Roth IRA or Traditional IRA?

Roth IRA or Traditional IRA?

An IRA can be an effective retirement tool. There are two basic types of Individual Retirement Accounts (IRA): the Roth IRA and the Traditional IRA. Use this tool to determine which IRA may be right for you.

Online Calculation Tool

Monday, January 28, 2008

Protection And Profit From Falling Dollar And Rising Inflation

Protection And Profit From Falling Dollar And Rising Inflation

Issue #355 11/7/2003
The U.S. dollar is now vulnerable to a decline on two fronts — against major foreign currencies and in terms of its declining purchasing power in the United States.

Already, based on our recommendations in this column, you should be protecting yourself — and profiting — with:

  • About 10% of your conservative portfolio in Prudent Global Income Fund (PSAFX, 800-711-1848, www.prudentbear.com/funds_pshfund.html), which has enjoyed nice gains, and/or American Century International Bond Fund (BEGBX, 800-345-2021, www.americancentury.com), which has done even better. But don't let the difference in their relative past performance bother you. Both are still buys. Here's a chart showing their relative progress:

    Contra-Dollar Funds


    Both of these mutual funds are designed to benefit from a declining dollar, but each does so in a somewhat different manner. The American Century fund buys short maturity highly-rated bonds of overseas governments and corporations in non-dollar currencies. Prudent Global Income fund, meanwhile, also includes shares of gold companies in its allocations, along with a modest allocation to US treasuries for stability.

  • About 15% in gold-related investments, which are also doing very nicely. Now, it's time to go a few of steps further.

    Step 1. Reduce your Treasury-bill allocation from 45% to 30%. That's still more than adequate for good safety and liquidity.

    Step 2. Open an account with Everbank. It's owned by First Alliance Bank in Jacksonville, Florida, which earns a Weiss Rating of B (good) and is insured by the FDIC up to $100,000. You can reach them via email at worldmarkets@everbank.com or by calling 1-800-926-4922.

    Step 3. Their minimum account is $10,000. If that's more than 10% of the amount you've allocated to our Conservative Portfolio, add to your dollar-contra funds instead. Otherwise, put the 10% of your Conservative Portfolio into their 3-month euro CD, yielding 1.26%.

    Although the interest is better than the equivalents in the U.S., the primary goal is appreciation in the value of the currency. I like the euro because it has such a strong uptrend against the dollar.

    Step 4. Set aside 5% of your portfolio to buy Enerplus Resources Fund (ERF). This is a closed-end investment trust that produces a steady flow of earnings from various royalties it receives from the distribution of natural gas and oil. But don't buy it right away. Wait for it to decline some more and pay no more than $25.75 for it.

    Portfolio Update

    To sum up, here's what your Conservative Portfolio should look like:

    1. Treasury bills or equivalent money funds: 30%. Buy directly through the Treasury Direct program (for info, call 800-722-2678 or visit www.treasurydirect.gov).

    One of the most convenient ways to buy is through money market funds specialized in Treasuries, such as:
    • American Century Capital Preservation Fund, ticker symbol CPFXX (800-345-2021; www.americancentury.com)
    • Dreyfus 100% US Treasury Fund, ticker symbol DUSXX (800-645-6561; www.dreyfus.com)
    • Fidelity Spartan US Treasury Fund, ticker symbol FDLXX (800-544-8888; www.fidelity.com)
    • USGI US Treasury Securities Cash Fund , ticker symbol USTXX (800-873-8637; www.usfunds.com)
    • Also consider our own Weiss Treasury Only Money Fund, ticker symbol WEOXX (800-814-3045; www.tommf.com).
    2. 3- to 5-year Treasury notes: 15%. No change in your allocation.

    3. Dollar-contra funds: 10%. No change.

    4. Euro CD: 10% (see above).

    5. Gold-related investments: 15% (see Larry's Gold Column).

    6. Enerplus (ERF): 5% (see above).

    7. Other energy related investments: 15%, including ...
    • Provident Energy Trust (AMEX-PVX), which rose as high as $8.63 in October, nearing my sell targets. Sell half at $8.90 or better and the other half at $9.40 or better. In the meantime, hold on and enjoy the dividends.

    • Pogo Producing Company (NYSE-PPP): Profits rose from $31.6 million to $67.7 million in the third quarter for this company. But the shares slipped as oil prices fell. Hold.

    • Kinder Morgan Energy Partners (NYSE -KMP): 5%. KMP announced third-quarter net income up from $80.4 million to $95.6 million. Hold.
    8. FTI Consulting (NYSE-FCN). Last month we recommended that you exit this stock at $18 or better, and it rallied as far as $20, giving you ample opportunity to get out.
  • Tuesday, January 22, 2008

    How to Make a Million by Age 65

    How to Make a Million

    by Mary Beth Franklin,
    Tuesday, January 22, 2008
    provided by

    Strategies for saving at every age.

    The road to $1 million starts early, but there's hope, and help, for late bloomers.

    Choose your age category below to see how much you need to save each month to accumulate $1 million by age 65. You'll also find strategies to fit retirement saving into the rest of your life.

    At age 25, you're starting from scratch. At ages 35, 45 and 55, we assume you already have money in savings on which you're earning 8% annually. Even if you can't save quite this much now, our step-by-step guide will help you set priorities for every stage of life.


    HOW TO SAVE A MILLION AT AGE 25

    You've Saved: $0

    To reach one million by age 65 you need to save $286 per month.

    Successful Savings Strategies

    You're just starting your career, so this is your chance to build a solid financial foundation. Time is on your side.

    Contribute enough to your company 401(k) plan to capture your employer match. If you don't have a retirement plan at work, fund an IRA.

    You'll be investing for 30 years or more, so you can afford to keep 100% of you account in stocks.

    Pay down credit cards and other high-interest debt. That will free up money to save for a house.

    Set up an emergency fund equal to three to six months of take-home pay. Stash it in a readily accessible account in an online bank that pays interest of 4% or more.

    HOW TO SAVE A MILLION AT AGE 35

    You've Saved: 0$

    To reach one million by age 65 you need to save $671 per month.

    If You've Saved: $50,000

    To reach one million by age 65 you need to save $304 per month.

    Successful Savings Strategies

    You may be starting a family or preparing to buy a home. Balance you short-term needs with long-term savings goals.

    Although you have added responsibilities, don't neglect retirement.

    Aim to save 15% of your gross income (including an employer match in your 401(k). If one parent leaves work to care for the kids, consider opening a spousal IRA.

    Shift your assets to 90% stocks and 10% bonds.

    Invest in a 529 college-savings plan. Many states offer a tax deduction for your contribution, and qualified distributions are exempt from federal taxes.

    HOW TO SAVE A MILLION AT AGE 45

    You've Saved: 0$

    To reach one million by age 65 you need to save $671 per month.

    If You've Saved: $50,000

    To reach one million by age 65 you need to save $304 per month.

    Successful Savings Strategies

    You may be starting a family or preparing to buy a home. Balance you short-term needs with long-term savings goals.

    Although you have added responsibilities, don't neglect retirement.

    Aim to save 15% of your gross income (including an employer match in your 401(k). If one parent leaves work to care for the kids, consider opening a spousal IRA.

    Shift your assets to 90% stocks and 10% bonds.

    Invest in a 529 college-savings plan. Many states offer a tax deduction for your contribution, and qualified distributions are exempt from federal taxes.

    HOW TO SAVE A MILLION AT AGE 55

    You've Saved: 0$

    To reach one million by age 65 you need to save $671 per month.

    If You've Saved: $50,000

    To reach one million by age 65 you need to save $304 per month.

    Successful Savings Strategies

    You may be starting a family or preparing to buy a home. Balance you short-term needs with long-term savings goals.

    Although you have added responsibilities, don't neglect retirement.

    Aim to save 15% of your gross income (including an employer match in your 401(k). If one parent leaves work to care for the kids, consider opening a spousal IRA.

    Shift your assets to 90% stocks and 10% bonds.

    Invest in a 529 college-savings plan. Many states offer a tax deduction for your contribution, and qualified distributions are exempt from federal taxes.

    Copyrighted, Kiplinger Washington Editors, Inc.