Oct 20 2017

National Save for Retirement Week

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Carrying forward a post I stuck on Facebook:

 

Someone somewhere declared this “National Save for Retirement Week.” Ok, it’s as good of a time as any to evaluate your progress.

Vanguard has some helpful ideas here:

In my mind, there are 4 main factors to consider when saving for retirement:

1. How much money you’re investing. (Employer-sponsored plans, including any potential match; IRAs, regular taxable investment accounts when the first two options have been exhausted).

2. Which investment options you’ve selected. Each fund has a purpose and is designed to meet particular goals. Make sure they are YOUR goals and are appropriate for your situation.

3. Asset allocation. Are you dumping it all into one target-date fund where the asset allocation happens automatically? Or are you handling the asset allocation and rebalancing yourself?

4. FEES. Do not overlook fees. High fees will eat into your returns, costing thousands over time. Some employer-sponsored plans might have a higher fee, say 1-6% or more.

There might or might not be much you can do there, but pay attention. You can control the fees associated with your IRA, as you’re the one in charge. My target-date retirement fund at Vanguard has a .16% expense ratio, for example. Some Admiral funds at Vanguard have even lower fees, .04% is an example — VTSAX Vanguard Total Stock Market Index Fund Admiral Shares. Nice.

Here is an investment fee comparison calculator so you can see the difference. I like this article on NerdWallet showcasing the impact in an example portfolio.

It can feel overwhelming, but this is your life. This is your money. You can handle this.


Posted under Personal Finance | Comments Off on National Save for Retirement Week

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Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

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I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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