31% of Americans Have No Retirement Investments – Tips for Starting

Portrait of Smiling Family on Steps“Nearly a third, or 31% of U.S. adults said they had no savings or pension to help them afford retirement, according to the Federal Reserve Board.”  – CNN Money

Extended family sitting outdoors smilingI want to say that I’m surprised, but after working with students, employees and retired folks for the last seven years ….  this is what I already know. If you’re part of this group, you’re going to be in for a HORRIBLE surprise come “retirement age”. Either you won’t be able to retire at all or the money from Social Security will only be enough for you to afford a room in your kid’s house and no fun, but it’s not too late. Here are my tips for creating a retirement plan and sticking to it … at any age.

0 – 16

Think it’s too early to start thinking about your child retiring? Not so. Though you can’t take advantage of tax-deferred plans like IRAs (you’re kid probably has no earned income) you CAN put a few dollars away every month in a regular investment account, buy individual shares of stock or purchase savings bonds. Let’s assume that you contribute $50 per month (or $600 per year ….  birthday … Christmas …  ) to any one of these strategies and that the investment earns 2% per year on average (some years more, some years less). By the time that child is 67 years old, that investment would be worth $84,584.31. Imagine how much money it would be worth once your child started contributing too.

16 – 24

By this time you are probably working, but not making much money. You might think that $50 per month won’t amount to much anyway so why bother? Because that $50 per month, or more, could end up being $432,992.84! Once you’re working you have earned income and can take part in wonderful retirement investing plans like 401k/403b, if your job offers them, or Individual Retirement Accounts (IRAs), if your job doesn’t. You put in $30,600 over your working years (16 to 67) and you’ll end up with a half-million dollars … easy! Read more about this in my book 10 Things College Students Need to Know About Money.

25 – 40

Yes! Now, we are in the prime earning years! Not only do you have a job, you probably have a half-way decent job. No more ramen for you! It’s time to take it up a notch. If you have been investing (since you have that good job) increase that contribution. If you haven’t begun FamlyBlackcontributing yet, it’s time to start.

You might think that you don’t have any spare money to invest or you might not know how to invest (read Money Matters: The Get It Done in 1 Minute Workbook), but it’s easier than you think, especially if your company offers a retirement plan with a company match. On your own, the average American can find $50 worth of spare change every month. PLUS, think about the ways that you waste a few dollars here and a few dollars there every month. Assuming a monthly $50 investment, starting at 30 years old, into a tax-deferred retirement account could still net you $136,725.48. Bump that up to $75 per month and you’ll be looking at $205,088.22. Not too shabby!

40 – 67

If you’re here then you are squarely looking at retirement …. perhaps. In Money Matters: The Get It Done in 1 Minute Workbook I have a worksheet that asks you to take a look at where you are and where you’d like to be. If you’re path is not heading in the direction you’d like it’s not too late to change.

You’ll need to do a little more to catch up, but it’s not impossible. A monthly $200 investment with an 8% return could turn into $229,797.95. Use the Social Security Administration’s estimator to find out how much you’ll get per month once you’re retired. You may find out that you need to work a few extra years. You may find out that you’re fine. Ether way, knowing is better.

If you haven’t begun investing for retirement yet, don’t be downhearted. The time is now. Don’t wait another day. Contact Human Resources at your job and find out how to start investing. Find a fee-only planner and take a comprehensive look at your financial situation. Buy a book to learn the basics and get started.

Working hard won't get you what you want. Working smart will.

Working hard won’t get you what you want. Working smart will.

It begins now.

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com

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Carmelo Anthony Founds M7 Tech Partners

CarmeloAnthony

Carmelo Anthony has decided to co-found a company, M7 Tech Partners, that will invest in technology start-ups. The NY Times says:

The idea that turned Carmelo Anthony into a venture capitalist came to him during practice with the Knicks last season.

The basketball star became interested in the sophisticated sensors that players had recently started wearing to track their performance …

The average basketball player has a career of five seasons. After playing many athletes have little money and no skill set other than playing basketball. I’m glad to see that Carmelo Anthony is building a financial foundation to make sure that he and his family will be financially secure after retirement from basketball.

Bloomberg reports that Anthony said:

“We are actively looking for ventures with strong leaders creating breakthrough products that resonate with consumers,” he said. “I particularly have my eye on companies that are involved with wearable technology and connected devices – these will be huge areas for the future.”

Investing in tech start-ups is a tough field, so I’ll be keeping a close eye on M7 Tech Partners. I wonder if M7 will actively pursue Black and/or Latino tech start-ups?