but lower rates of interest. A market setback that's a minor inconvenience when you're twenty seven could be a major disaster at sixty. In general, a good rule of thumb is that at sixty years of age, you want about 70% of your retirement income in bonds with 20% in growth funds and 10% in long range return funds. For every five years under sixty, move 5% of your income from bonds to long range return funds, and for every ten years under sixty, move 5% to growth funds for aggressive portfolio growth. Thus, at 30 years of age, you'd have about 40% of your retirement investmenFinancial planning for retirement is one of the most important investment decisions you're ever going to make in your life, and it's not a decision that you make once, and then forget. It's one that you make and re-assess roughly once per year.

The important decisions in financial planning for retirement are balancing risk and reward. All investments carry some element of risk; in general, the higher the rate of prospective return, the greater the element of risk; this is the fundamental dynamic of investing – investors are taking a small gamble on a prospect that what they're spending money on will either pay a dividend or interest, or appreciate in value.

There are two investment vehicles you should seriously consider for financial planning for retirement. The first is a 401(k) plan, which has several advantages for taxes, and has employer matching funds. The exact benefits of a 401(k) plan are the subject of a separate article. The second is your home. As you build equity in your home, and pay off the mortgage, your monthly expenses will drop, and may drop to nothing more than escrow payments on property taxes. As housing expenses make up nearly 30% of the monthly nut for most Americans, this is a significant benefit as you retire, so by all means work on paying off your mortgage.

When it comes to investing funds to build a retirement income, keep in mind both inflation (the purchasing power of a dollar halves anywhere from every 18 years to 25 years in the United States), and the rule of compound interest (72 divided by the interest rate you're getting gives the number of years before your initial investment doubles). The real inflation rate in the United States is somewhere around 3 to 4% per year; deduct this from your interest rate, and you'll get a good metric for how much your real purchasing power is accumulating by.

Now, back to risks and rewards. When you're young, and setting out your 401(k) allotments, always allocate as much as you can to get employer matching funds at the full rate, and as much more as you can get. When you're young, you can afford to take somewhat riskier (and higher yielding investments) like stocks and mutual fund portfolios.

As you get older, you'll want your investments to transition to bonds with guaranteed payouts over time, but lower rates of interest. A market setback that's a minor inconvenience when you're twenty seven could be a major disaster at sixty. In general, a good rule of thumb is that at sixty years of age, you want about 70% of your retirement income in bonds with 20% in growth funds and 10% in long range return funds. For every five years under sixty, move 5% of your income from bonds to long range return funds, and for every ten years under sixty, move 5% to growth funds for aggressive portfolio growth. Thus, at 30 years of age, you'd have about 40% of your retirement investment

ey're spending money on will either pay a dividend or interest, or appreciate in value.

There are two investment vehicles you should seriously consider for financial planning for retirement. The first is a 401(k) plan, which has several advantages for taxes, and has employer matching funds. The exact benefits of a 401(k) plan are the subject of a separate article. The second is your home. As you build equity in your home, and pay off the mortgage, your monthly expenses will drop, and may drop to nothing more than escrow payments on property taxes. As housing expenses make up nearly 30% of the monthly nut for most Americans, this is a significant benefit as you retire, so by all means work on paying off your mortgage.

When it comes to investing funds to build a retirement income, keep in mind both inflation (the purchasing power of a dollar halves anywhere from every 18 years to 25 years in the United States), and the rule of compound interest (72 divided by the interest rate you're getting gives the number of years before your initial investment doubles). The real inflation rate in the United States is somewhere around 3 to 4% per year; deduct this from your interest rate, and you'll get a good metric for how much your real purchasing power is accumulating by.

Now, back to risks and rewards. When you're young, and setting out your 401(k) allotments, always allocate as much as you can to get employer matching funds at the full rate, and as much more as you can get. When you're young, you can afford to take somewhat riskier (and higher yielding investments) like stocks and mutual fund portfolios.

As you get older, you'll want your investments to transition to bonds with guaranteed payouts over time, but lower rates of interest. A market setback that's a minor inconvenience when you're twenty seven could be a major disaster at sixty. In general, a good rule of thumb is that at sixty years of age, you want about 70% of your retirement income in bonds with 20% in growth funds and 10% in long range return funds. For every five years under sixty, move 5% of your income from bonds to long range return funds, and for every ten years under sixty, move 5% to growth funds for aggressive portfolio growth. Thus, at 30 years of age, you'd have about 40% of your retirement investmen

ake up nearly 30% of the monthly nut for most Americans, this is a significant benefit as you retire, so by all means work on paying off your mortgage.

When it comes to investing funds to build a retirement income, keep in mind both inflation (the purchasing power of a dollar halves anywhere from every 18 years to 25 years in the United States), and the rule of compound interest (72 divided by the interest rate you're getting gives the number of years before your initial investment doubles). The real inflation rate in the United States is somewhere around 3 to 4% per year; deduct this from your interest rate, and you'll get a good metric for how much your real purchasing power is accumulating by.

Now, back to risks and rewards. When you're young, and setting out your 401(k) allotments, always allocate as much as you can to get employer matching funds at the full rate, and as much more as you can get. When you're young, you can afford to take somewhat riskier (and higher yielding investments) like stocks and mutual fund portfolios.

As you get older, you'll want your investments to transition to bonds with guaranteed payouts over time, but lower rates of interest. A market setback that's a minor inconvenience when you're twenty seven could be a major disaster at sixty. In general, a good rule of thumb is that at sixty years of age, you want about 70% of your retirement income in bonds with 20% in growth funds and 10% in long range return funds. For every five years under sixty, move 5% of your income from bonds to long range return funds, and for every ten years under sixty, move 5% to growth funds for aggressive portfolio growth. Thus, at 30 years of age, you'd have about 40% of your retirement investmen

deduct this from your interest rate, and you'll get a good metric for how much your real purchasing power is accumulating by.

Now, back to risks and rewards. When you're young, and setting out your 401(k) allotments, always allocate as much as you can to get employer matching funds at the full rate, and as much more as you can get. When you're young, you can afford to take somewhat riskier (and higher yielding investments) like stocks and mutual fund portfolios.

As you get older, you'll want your investments to transition to bonds with guaranteed payouts over time, but lower rates of interest. A market setback that's a minor inconvenience when you're twenty seven could be a major disaster at sixty. In general, a good rule of thumb is that at sixty years of age, you want about 70% of your retirement income in bonds with 20% in growth funds and 10% in long range return funds. For every five years under sixty, move 5% of your income from bonds to long range return funds, and for every ten years under sixty, move 5% to growth funds for aggressive portfolio growth. Thus, at 30 years of age, you'd have about 40% of your retirement investmen

but lower rates of interest. A market setback that's a minor inconvenience when you're twenty seven could be a major disaster at sixty. In general, a good rule of thumb is that at sixty years of age, you want about 70% of your retirement income in bonds with 20% in growth funds and 10% in long range return funds. For every five years under sixty, move 5% of your income from bonds to long range return funds, and for every ten years under sixty, move 5% to growth funds for aggressive portfolio growth. Thus, at 30 years of age, you'd have about 40% of your retirement investments in bonds, and about 35% in growth funds and 25% in long range funds, and you'd gradually make your investments more conservative over time.