COUNT YOUR NEST EGGS
A special edition on retirement planning
What to do now to retire better, no matter your age.
20S AND 30s Learn the money basics
Two books to consider: “How to Think About Money,” by Jonathan Clements, and “Heads I Win, Tails I Win: Why Smart Investors Fail and How to Tilt the Odds in Your Favor,” by Spencer Jakab.
The Investor Protection Institute’s site, iInvest. org, offers free guides that explain stocks, bonds and mutual funds. You might also consider taking a personal finance course at a community college or checking the online offerings on sites like Coursera.org.
Sketch out your monthly budget
Add up the fundamentals (your rent, utilities, groceries, transportation, student loans and car loans) and subtract from your monthly after-tax pay. Websites like Mint.com and YouNeedABudget.com offer free software to track spending and set up budgets.
Start saving and investing
Take advantage of your employer’s 401(k) or similar retirement plan. Workers under age 50 can contribute up to $18,000 to their employer-provided 401(k) in 2017. Contributions are tax deductible, and investments grow tax-deferred until withdrawals in retirement.
Invest enough in your 401(k) to qualify for the full match (the amount your employer puts in as a result of your contributions). Most employers require workers to save from 4 percent to 6 percent of pay to get the maximum match. Begin by saving at least 5 percent of your salary and increase the amount by one percentage point every year until you reach 20 percent. Some plans allow participants to schedule automatic increases each year.
Diversify investments
Aim for a portfolio of stocks or stock mutual funds. Equities outperform fixed-income investments over time. Investors more than 15 years away from retirement should consider an aggressive portfolio with more than 80 percent allocated to stocks.
Invest in a diverse mix of low-cost index funds.