IN YOUR 30'S - MAX IT OUT FOR RETIREMENT...

Here's my story. I started contributing to a Roth IRA ten years ago. I thought I was totally on track because I maxed out my allowable contributions each year. Here is where I was clueless... I left it sitting in the Money Market account offered by the Custodian at the time, TD Waterhouse, and didn't invest it for several years. I might have done just as well growing that money if I had put it under my mattress! Bad idea. Money Markets sometimes earn far less interest than a regular Savings Account does. Now I know better, but I wish I would have read this article way back when...


From O Magazine - Amanda Robb
Now's the time to max out your contributions to your retirement accounts (if you haven't already). The easiest way to choose an appropriately aggressive retirement plan in to invest in a "lifecycle" or "lifestyle" fund -- one that automatically adjusts your holdings to less risky investments based on the number of years until you retire, says Suze Orman. For a rough idea of how much you'll need for retirement, Eric Tyson offers three scenarios:

1. You'll need 65 percent of your projected preretirement income if you save 15 percent of you annual income, are a high-income earner (generally more than $100,000), will own your home debt-free when you retire, and plan to live modestly in retirement.

2. You'll need 75 percent if you save 5 to 14 percent of your annual income and want to maintain your preretirement lifestyle.

3. You'll need 85 percent if you save less than 5 percent of your annual income, have to pay a mortgage or rent in retirement, and want to maintain your current lifestyle.