Saving For Retirement Part 1-Why Not Start Now?

A 2 Part Series

To Be More Accurate, You're Saving Money To Put Into Investments For Retirement

Saving for retirement could easily be one of the most important things you'll ever do. Saving money is simple and relatively easy.

First, let's separate "saving" and "investing," because they're two different things.

If you put your money into a savings account and just leave it there, then you're not investing. You will actually lose money over the long term, because you're not keeping up with inflation.

Investing is putting your money into something such as a mutual fund that will go up in value over time, and keep ahead of inflation. However, first you must save some money in order to invest it, right?

In this article we'll concentrate on saving for retirement, and in another article we'll zero in on investing

People of even modest means reach financial security by a slow and steady progression of saving and investing. You know, the guy down the street who owns a small house could very well be a millionaire, and you didn't know it.

Let's get started by...

• Believing you can do it!



• Defining You Goals



• Making a financial plan



• Defining your risk tolerance



• Choosing an investment



• Choosing a financial professional

To get from where you are now to where you want to be, you'll need to ask yourself "What are the things I want to save and invest for?"

Decide how many years you have to meet each specific goal, because when you save or invest you’ll need to find a savings or investment option that fits your time frame for meeting each goal.

Add or delete from this list as you see fit...

• A home
• A car
• An education
• A comfortable retirement
• Your children
• Medical or other emergencies
• Periods of unemployment
• Caring for parents

Figuring Out Your Finances

Sit down and take an honest look at your entire financial situation. You can never take a journey without knowing where you’re starting from, and a journey to financial security is no different.

You’ll need to figure out on paper your current situation— what you own and what you owe. You’ll be creating a “net worth statement.”

On one side of the page, list what you own. These are your “assets.” And on the other side list what you owe other people, your “liabilities” or debts. These are the first steps to take in saving for retirement.

Your Net Worth Statement

ASSETS	VALUE	LIABILITIES	AMOUNT
cash		mortgage balance
checking account		credit cards
savings		bank loans
cash value of life insurance		car loans
retirement accounts		personal loans
real estate		real estate
home
investments
personal property
other
TOTAL

Subtract your liabilities from your assets. If your assets are larger than your liabilities, you have a “positive” net worth.

If your liabilities are greater than your assets, you have a “negative” net worth.

You’ll want to update your “net worth statement” every year to keep track of how you are doing. Don’t be discouraged if you have a negative net worth. If you follow a plan to get into a positive position, you’re doing the right thing, and on your way to saving for retirement.