Three ways to build a solid retirement plan

These investment ideas came from an internet article. They all make sense to me, except you must take into account your own situation.

1. Determine your contribution amount
The amount you need to contribute to your 401(k) plan depends on your age, as follows:

If you’re in your 20s, it’s 10 percent (of income); if you’re in your 30s, 15 percent. If you’re 40-plus, 20 percent. Workers in their 40s who haven’t saved before should save the maximum, which is now $16,500 per year. For workers 50 and older, the limit is $22,000. As you get ‘older’, SAVE MORE.

2. Choose appropriate funds
401(k) offerings are frequently skewed in favor of equities. An employer may offer twelve stock funds and one bond fund. Less risk tolerance means bond funds may be where half of of your money should be. Read the last sentence again. Bond funds might be smart.

3. Rebalance as needed
Once you make your fund selections, it is easy to coast along. Don’t coast. Review and re-balance your investments every quarter. This strategy is known as buying low and selling high. WATCH your money.

OK, here is my secret investment strategy. Save the max you can and put 70 to 90 percent of your savings in interest earning accounts. The small percent amount you are comfortable losing, put in stocks or go to Vegas and gamble it. When you retire, check your savings against your life expectancy. Make plans according to the outcome.

(Before any gambling. be sure first you aren’t risking your family’s ‘live on’ money.)