Deciding How Much To Invest
How much you should invest depends on your investment goal and when you need to reach it.
One common investment goal is retirement. If you have a retirement account at work, like a 401(k), and it offers matching dollars, your first investing milestone is easy: Contribute at least enough to that account to earn the full match.
As a general rule of thumb, you want to aim to invest a total of 10% to 15% of your income each year for retirement — your employer match counts toward that goal.
If you don't have a 401(k), you can invest for retirement in an individual retirement account, like a Roth IRA
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"I can do all things through Christ who strengthens me.” — Philippians 4:13
Learning the basics about investing can be pretty complicated and overwhelming without the proper information. Hopefully this guide can help you get started.
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The idea is part of this collection:
Learn more about moneyandinvestments with this collection
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Week 3: Open 2 Investing Accounts
Open:
- a 401(K) account
- a regular investment account.
Next:
- If your employer offers a 401(k) match, invest to take full advantage of it. Contribute enough to get 100 percent of the match.
- Pay off debts. This give you a significant instant return.
Tax-advantaged accounts can help
You can take advantage of the tax-sheltered retirement accounts like 401(k)s and IRAs.
- If you qualify for a Roth IRA, use it. The Roth IRA will come back to you tax-free when you're older.
- If you contribute to a 401(k) account, at least 5 percent will be matched from your e...
How to Save Right for Retirement
- Start Saving ASAP. Money you put in your retirement fund now will have more time to grow through compound growth.
- Avoid cashing out your retirement account early as it prevents your money from being invested and leads to penalties and tax bills.
- Contribute mo...
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