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WHERE DO YOU WANT YOUR MONEY TO TAKE YOU TODAY?

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doesn’t sound too bad, but what if you could get compound interest at 10 percent? Sounds much better doesn’t it? Especially if you consider that increasing the interest rate by 4 percent could mean doubling or tripling your money. For example, the difference between investing $1 at 5 percent and investing $1 at 10 percent for 30 years is $13.13 ($17.449 $4.322).

This assumes that everyone can handle higher-risk investments, when the truth is that there are some people who cannot tolerate the risk involved with certain investments. If you find that you really can’t sleep at night because you are worried about your money, then you do need to have it invested more conservatively. However, your choice then becomes putting it in something like a bank CD (which is also insured up to $100,000 per investor) or a savings account. Obviously, since both investments are very low risk, you will need to put your money in the bank CD because it yields a higher interest rate than the savings account would. Also, since you will be utilizing lower-paying investments, you will need to invest more than you would otherwise. Therefore, if you were going to invest $1500 per year in higher-risk investments, you’ll need to invest more than that, say $3000, simply because the money is going into lower-paying investments.

All things considered, try to invest as much as possible in an investment vehicle that has the highest potential return that you are comfortable with. And, while it’s never too late to start, if you haven’t yet begun to save for your retirement, do it now! The earlier you begin, the more money you will be able to amass before you retire. You may also find that you’ll be able to retire sooner than you had anticipated.

ESTIMATINGYOUR RETIREMENT NEEDS

Once you have set your goals and you have started to form a clear picture of what you would like to do during your retirement, you need to figure out how much money you will need to live on. If only that was all there was! Unfortunately, our economy isn’t static, and will be subject to many fluctuations between now and when you begin your retirement. That means that not only do we not know how

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