My husband is working part time driving a school bus. The company is offering a 401(k). My husband is 73 and is in excellent shape so hopefully he could be working there another 5 years or more. What would be safe for him? Conservative investment with part aggressive? We would like to make as much as we can without losing. Also, the company will match a certain percentage.
I love this question because it provides a great opportunity for me to point out that it’s never too late to save, or to continue saving. I’m so happy that your husband has decided to participate in this 401(k) because even if he doesn’t earn a penny from his investments, those matching dollars will be a great return. If he contributes 3% of his salary and his company matches 3%, he’s just doubled his investment and that can go quite a way over five years.
That said, we all would like to make as much as we can without losing, and we often can when we have a long time horizon. The risk when you’re very close to retirement is that you won’t have the time to make up any losses, so you really want to stay pretty conservative here. I would invest in a conservative balance fund or a high percentage of balance funds, skewing what he saves heavily in favor of fixed income. You could still have a small stake in equities, but definitely no more than 30% or so if you’re nervous about losing your shirt.
In times of financial trouble, do you ever look at your 401(k) and think, “ah, maybe if I just withdrew a little bit now, it could help me out?” If so, you’re not alone. However, as I told Hoda and Meredith Viera this morning, it’s not such a great idea to take a hardship withdrawal or to cash out before you hit retirement age. To find out why, check out our discussion in the video clip below.
This morning on Money 911, we heard from a woman who has been a landlord for the past few years but is wondering whether or not she should sell the property. I told her there are a couple of questions she should ask herself in order to decide. To see what those questions are, plus for information on the cost of going to graduate school, check out the video clip below.
This weekend, I went on the TODAY show to talk all about retirement: why it’s best to automate 401(k) contributions, why you should put your retirement needs above your children’s college costs, and why it’s best to wait as long as possible to take Social Security. To see the segment — plus my answers to some viewer questions — check out the video clip below:
This morning on Money 911, we heard from a college student who does not have student loans and has some money she’s considering investing. But is it too early for her to invest? To see what we told her, plus for information on short sales and mortgage applications, check out the video clip below.
How do you know if alternative investments (like cattle, horses and homes) are right for you? This morning, I sat down with Ann Curry to talk about the pros and cons of alternative IRAs. To see our discussion — plus why you should be careful when putting a home in an IRA — check out the video clip below.
During the holidays, many retailers try to entice you to sign up for their store credit card by promising additional deals and savings. So should you take the bait? To find out the answer to that question — plus tips on balancing medical bills and paying for school — check out the video clip below.
After years of doom and gloom, research reports and analysts are indicating an attitude of cautious optimism towards the stock market. As I told Ann Curry this morning, earnings are looking good and the S&P 500 is looking fairly inexpensive. To see the other positive market indicators — plus how the 2012 presidential election might have an effect — check out the video clip below.
Yesterday morning on Today‘s Money 911, we received a question from a grandmother looking to give the gift of stocks to her young grandchild. This is a great idea, because it can teach children about the importance of investing early in their life. To see the tips we gave her — plus how to know if you’re saving enough for retirement — check out the video clip below.
When the financial crisis hit in 2008, target date funds (TDFs) had a crisis of their own — an image crisis. Hailed as a “set it and forget it” retirement solution, TDFs were thought to prevent you from losing money as you closed in on your retirement date. This was not the case. In my latest Newsweek column, I check in with these funds. How are they doing now, and what do investors need to know about them? You can find the answers to those questions here.