Not sure where to park my retirement money...?

United States
April 7, 2012 4:37pm CST
Every month, I save $800 and split it into two different savings accounts -- $400 towards retirement and $400 towards a condo. My employer doesn't match any 401k plan so that's out. Where else can I put my retirement funds that is safe? Because I heard a regular savings account is not the best option. Any tips or insight?
1 person likes this
5 responses
• Bahamas
8 Apr 12
How about trying other things that will help you make income for the rest of your life and then will it to children and grandchildren when you are gone. This came to my mind just this weekend when I was looking online for some sort of a online job so that I could make some extra cash. If you know a lot of people who would be interested in creating their own website this site might interest you. Check out this video any way and let me know what you think about it.
@stealthy (8186)
• United States
8 Apr 12
While many will recommend index funds and for some that is good. What has worked for me in my broad investment experience is a lot of diversification. I have some in fairly safe investments some of which I am in their dividend reinvestment plan. I also invest in some very risky stocks which pay very high dividends, this is probably not for you. At your age(according to your profile) you have plenty of time for your savings to grow. So I would recommend splitting your money into a couple of investments that have a reinvestment plan or putting part in a mutual fund family that has very low fees like Vanguard. For a stock I can suggest something like AT&T, Inc. which is currently paying a dividend of a little over 5%; if you choose them or some other strong company with a relatively high dividend compared to banks and money markets, you should do it at some broker that does not charge a fee for the reinvestment; such a broker might be E*Trade or some other online broker that has a low commission. You should learn about investing and dividend dates to see if you want to time your buying of the stock to minimize your commissions or if the commissions or low enough to see if you want to try to play the market a little to catch the stock on a down fluctuation. I have also had some good luck with some Vanguard bond funds such as the High-Yield investment fund which has a monthly dividend with an annual yield of 4 to 5%; this can also be set up to reinvest with no additional fee for the reinvestment. You shouldn't run out and do what my examples are but do some research and see what is best for you and what kind of risk you are willing to take.
@dragon54u (31620)
• United States
8 Apr 12
You need to find a financial adviser that works for a fee. I say that because for-fee advisers are bound by law to adhere to a fiduciary responsibility, that is, they must give you advice in your own best interest and not to profit themselves. They don't sell financial products like annuities so they have no incentive to steer you one way or the other. Someone like this will tell you the best way to make your money grow so that you'll be able to get that condo and afford your retirement. I have mutual funds, a mix of investments from companies around the world, and only about 15% of my money is in stocks. That protected most of my wealth when the market crashed. My adviser tells me that I should remain cautious and conservative as things are so unsettled right now and will continue to be so. Please see a financial adviser and be sure he has a "fiduciary responsibility". That's the only way you'll get good objective advice from someone who actually has your best interests at heart.
@scheng1 (24673)
• Singapore
8 Apr 12
Hi Handsome, you can find an index fund or even 4 index funds that track different stock indices. That is the advice given by many rich investors for newbies. They do not encourage people to buy mutual funds, since you have to pay the salary of those analysts and fund manager. Index fund is very straightforward, no need analyst and fund manager. The index fund will track a certain index in the stock market of a particular country or sector. For example, there are funds tracking S&P 500, DJIA or Hong Kong Hang Seng index or whatever else. You can buy into 4 different funds, and contribute $100 towards each fund every month. In this case, you will have benefited from diversification. Just make sure that you sell part of it when the economy is booming, and everyone is saying that stock market has hit a new high. Even after you sell off part or all of your holding, you can still contribute the monthly $100 to buy new units. As for your current saving, you can use it to buy short term government bond. At least you get dividend twice a year.
@olliekobra1 (1826)
7 Apr 12
Thats good that you have some spare cash to put away for your future a lot of people cant so your lucky. Maybe you could invest some of your money in the stock market if you know anything about it but it is a risk.