A 28 year old MBA who makes of lot of money wishes to establish an account, so that at the time of his future retirement at 60 years old, he can withdraw $6,000 per month at the end of each month for 25 years until all the money is exhausted.\nHe knows that he is going to inherit $200,000 at age 50. The inheritance can be invested. If he starts to save now until 60, how much should he save per month at the end of each month, if all money can be compounded monthly at 7% annual rate at all times.
131575
I'm using the financial apps package on the TI-83.\nAt 7% annual for 10 years the $200,000 will grow to $401,932.  To withdraw $6000 a month for 25 years he'll need $848,921, which is $446,989 more than he'll get from investing the $200,000.  So he'll need to put $312.93 a month into his retirement fund.
448005
Everyone must create his own retirement savings.  You need to save about 15% of every dollar you'll ever make to expect a reasonable retirement.  You need to deversify your investment and maintain a good rate of return (about 8% per annum). Avoid any mutual funds with annual fees exceeding .2%.  Direct investment in stocks and bonds will greatly reduce the expense drain on your portfolio.\nPut 10% of your money into foreign investments.
677055
Depends on your age.  I'm 61 and still heavily invested in mutual funds . . . yes the current market tightens up my gut a little, but I don't need or want to use my money for at least 6 years.  I can't name a source but if you dig around a little, you'll see that stocks have averaged around 11%  a year over the last 75 years.  Yes, around 11% including the Great Depression years.
258459
You can start for as little as $100 a month at most firms, investing systematically, month after month, which is the smartest way to do it by the way, whether you have $100 or $100,000.  Actually, I know at Edward Jones you can start with mutual funds for as little as $25 a month.\n\nWhat to invest in?  I'd suggest buying a diversified series of mutual funds. Make sure you hit all the asset classes, like Large cap stocks, small/mid cap stocks, international stocks, emerging markets stocks, government debt, corporate debt, hi-yield debt, foreign debt, emerging markets debt, real estate, commodities, and precious metals. That's 12 categories right there, so if you're starting off with $1000, you're talking about $83 each. Or why not spring for an extra 200 bucks, and start each off with $100 even?\n\nThen sit back and rebalance each year, back to your original percentages. This is called asset allocation. The thinking being, what's BEEN hot is more than likely not going to STAY hot.\n\nThis sort of portfolio should average 8-12% per year, so juut split the difference and say 10%. Will it do 10% EVERY year? Of course not. I'd be surprised if it ever did EXACTLY 10%. That's an annual average. With that average, your money should double roughly every 7 years.\n\nSo, if you start with that $1000 and never add to it ever again, in 7 years you should have about $2,000\nin 14 years you should have about $4,000\nin 21 years you should have about $8,000\nin 28 years you should have about $16,000\nin 35 years you should have about $32,000\nin 42 years you should have about $64,000\nin 49 years you should have about $128,000\nin 56 years you should have about $256,000\nin 63 years you should have about $512,000\nin 70 years you should have about $1,024,000!\n\nA long time to wait to become a millionaire, impressive as that compounding is!\n\nOf course, if you keep adding money in systematically like I suggested earlier, say $100 a month, you'll become a millionaire MUCH sooner. The key is discipline, and sticking in when markets are up OR down. Don't try to time the market--you'll NEVER get it right.\n\nHere's a handy formula:\n$100/month x 12% return x 20 years = $100,000.  So if you want $500,000 20 years from now, just save $500 every month, and go with that diversifed portfolio.  If you only average  10%, you'll only end up with $450,000, not bad either way!  \n\nOh, and if you qualify, and do this all in a Roth IRA? Then every penny will be 100% TAX-FREE. That's a deal that's too good to pass up. That's why I tell all my under-30 clients--if you make under $90,000, and therefore qualify to do a Roth, you'd be a fool not to. Just having the power of youth (and therefore time) on your side is such an advantage, to squander it would be such a waste!\n\nHope this helps!\n--J.
288097
Find a financial advisor you trust (through interviewing them).  They will provide good investment advice.  Both IRA's grow tax deferred (you don't pay earnings along the way).  The differences are that \n\nTraditional ira- tax write off on contributions, taxed fully when withdraw, can't withdraw b4 59.5yrs old w/o 10% irs penalty and taxed on everything\n\nRoth- all contributions are already taxed (can't use it as a write off), by the time you're 59.5 yrs old (and assuming you had the account at least for 5 yrs) everything is tax free.  You are also allowed to take out the principal at anytime w/o penalty.  Some other rules apply to fully withdraw w/o penalty (i.e. 1st home purchase, higher education, etc.)\n\nAgain, if you have little to no investment experience, DO NOT listen to those hot stock tips, Suze Orman, or whatever is on TV.  By the time you hear of those 20% returns, you're already too late (i.e. real estate).  Please, please work with a professional.
251230
I actually do finance and asset management for families.  If you were to retire TODAY... 1 million dollars at a modest 5% return would pay you $50,000 a year.  MOST could live pretty well off of that.  Depending on your age, you might need to save a little more just to battle inflation.  (essentially   $50,000 a year will not be worth as much each year)  And, if you do not own your home, this has to be taken into consideration as well.  I just read an article that predicts in the next 20-30 years their will be significant advancements in medicine allowing us to live well into our hundreds!  So be sure your prepared to go the distance!
562329
Ahhh, the million dollar question for Roth accounts...\n\nAnd the answer is - it depends (sorry). Unfortunately, you need a crystal ball for this one. Your decision will likely come down to what you believe the future holds. You need to consider several factors, but you basically have two courses of action to take. \n\n1) Take the sure thing - Invest in a Roth IRA, paying tax upon the contributions at your current income tax bracket, enjoy tax-free compounding of interest, and tax-free withdrawals of contributions and earnings through a qualified distribution (usually at retirement).  Be careful, though...even if you are 90 years-old, your money must be in the Roth account for at least 5-years before qualifying for a tax- and penalty-free withdrawal. There are other benefits to having a Roth account versus a traditional IRA, such as the ability to get to your money without penalty for qualified reasons, such as needing to get to the money in order to purchase your first home.  Contributions to Roth IRA's are subject to certain AGI limitations, so check with the IRS or a competent accountant first.\n\n2) Let it Ride - Invest in a traditional IRA and enjoy a tax deduction today and tax-free compounding of interest until you are able to take a qualified distribution (usually at retirement) at which time you will pay taxes on the principal and earnings at your future income tax rate.\n\nSo, look into your crystal ball...\n\nDo you believe that you will be in a higher tax bracket at retirement age than you are right now?  If so, the Roth IRA option may be the right choice for you as you will likely pay less in tax today than you would 35 years from now. Likewise, if you believe you will be in a lower tax bracket in retirement, it makes more sense to simply contribute to a traditional IRA, enjoy your tax deduction today, tax deferral on earnings over the years, and pay the piper upon retirement.\n\nThere are several wild cards to consider in this scenario, not the least of which is the possibility that tax brackets change. If you want my honest opinion, I think it is naive to assume that the historically low tax brackets we enjoy today will be around in 30 years. I am 31 years old and, without getting political, just look at the current landscape of our country and its budget deficits. The cost of wars, strains on social security from aging baby boomers, etc, leads me to believe that the government is mortgaging our nation's current problems and our generation will likely have to pay for it. And how will we pay for it? Higher taxes. All things being equal - if you have more than 15 years until retirement, I would opt for the Roth IRA.
4711
It depends on how old you are.  Most retirement plans depend on the economic conditions at the time of retirement.  One person can take their 401k out this year and might get more money then the person taking it out the year after.  See, its all economics.  On top of the economics, its what you invest in.  When you put money in a 401k, you have experts putting it into mutual funds for you.  They take alot from you.  So, theoretically, you can buy your own stocks and make a heck of a lot more.  And instead of investing in them for 45 years, you can invest for 8 years and make the same amount or more.  This is true, however, you dont know what to invest in.  So, I suggest you start small and on something a bit more safe.  I will show you 2 or 3 of the best ways to do this.  I am a rare coin expert.  These ways are not fool proof because the economy goes up and down in a cycle of booms and busts.  But, they do cut out the risk because you only have 10 years left.  \nThe first method is through gold.  I suggest you buy the physical form and not stocks or anything of that nature.  You can buy the physical form and allow the sellers to store it for you.  Do not allow them to store it for you if they are just a small company.  I would rather take the physical gold with me.  There is a fee to take this gold with you though.  But, its better then not having it.  With gold, its always hovering at about $278 to about $315.  I would say that anything less then $290 is a good buy.  When you buy, they always tack on an additional couple of dollars because the gold was assayed into a gold bar for you.  When gold is high, they add like $4.  When it is low, they might add $7 dollars.  Dont worry about this.  Just pay for it.  I would rather buy bullion coins then the gold bars in the packages.  They cost $10 dollars above the gold value in the bar form.  Now, there are certain gold bullion coins that you should and shouldnt buy.  Its always best to go for the pure gold ones.  The reason being is, sometimes a jewelry store will take it in, but they will only pay for its content because they were going to melt it anyways.  And if it wasnt pure 24k, then they might have to take a couple dollars off to turn it into 18k or 14k, etc etc.  So, the purest ones are the Canadian gold coins, and the Chinese gold coins.  When gold goes down, you buy, when they go up, you sell.  Its that simple.  You cant lose because gold goes up and down all the time.  So, dont sell if you lose.  Just keep it there.  Whats the point of saving if you are going to dip into it?  So, over the course of 10 years, I know you can make a sizeable profit.  The question is large or small because you will not know when to buy and sell.  All you see is a profit when you sell, and you see a cheap price when you buy.  What you do is buy when its around $290 or less.  Sell, when it goes up.  And with the excess, you can buy more gold.  Just continue doing this.  I know for a fact that you can start off with $3000 dollars today and make at least 20 trades in the next 10 years and make no less then 100% of your investment back.  Gold is currently at $500 plus.  What if you bought it when it was $290 or less, which is what is preferred.  Thats over 200 per ounce.  So, in a year or two, do you see that you would have had over 5k?  You just have to wait till it goes down to around the 300 mark.  I mean, even if you buy for 290, and it goes up to 310 in 2 weeks, you can still sell and make 300 dollars.  That would add almost another ounce to your portfolio.  Continue to do this until you are about to retire.  During the last year, you will be waiting for the highest price you can find to sell.  Another thing to look into is instead of gold coins, you can buy grain gold.  They are just little balls of pure gold.  They are usually a couple dollars cheaper, but they are hard to obtain sometimes.  \nSecond way of investing is buying coins from the US mint.  They will be the cheapest price you pa
551967
Something seems to be missing in your problem.\n\nTheres gotta be more to it because that is jusy too easy!\n\n8M for the first three weeks\n6M for the next four weeks\n\n=14M in 7 weeks.  James needs to invest and retire before he looses it! - Or share as some of you have said ;]
4363
You must live in North Jersey if you are seeing those kind of prices.  If you put 20% down on a $500,000 house that would be $100,000.  That leaves $60,000 in savings.  Hold on to that.  Setup automatic withdrawl so the mortgage payments come from that account.  Continue to add additional money to that account and you will have a nice buffer if one of you were to loose their job.
355275
You do not give much detail so it is hard to answer your question with 100 accuracy. I will give you the numbers I am using so you will have a better understanding. \n\nFirst... does 1/2 pt make a difference.  Yes.\nHow much.... useing 100k as a number and 6.0 and 6.5 so you see the difference in .5     599.55 for 6.0  632.07 for 6.5 ... Now STOP I know what you are thinking.. oh thats only 32 dollars. But we are not done. Over the life of a 30 year note or 360 months that will save you......11700.20 .. Yes I said eleven thousand seven hundred dollars and twenty cents. But dont run our yet. There is still more. That 11k is nothing if you play your cards right. Are you ready for some real money???\n\nTry it this way.... Add 100 extra to your monthly payment. By the way... your interest per day is about 17dollars at the begining of this loan so only 90dollars is going to the principal. Adding that extra 100 even to the first month will take you from month one to month three. \n\nTo put it simply.... after your first payment (using 100k @ 6.5 since you didnt give me the real numbers to use) you will have paid an extra months principal plus part of a day. Now instead of charging you interest on that 100 dollars you save that 63 cents. I know that doesnt seem like much.. BUT you have to remember this is over the life of the loan. So you save 63 cents the second month... thru the 360th. That would be 226.80 savings just for 100 dollars. Do it twice in a row ie first and second month and you will save 452.97 three times 678.51.. thats more than the monthly payment and it only cost you 300 dollars. \n\nI wont go into ALL the math but you get the idea. If you do this right.. ie 100 a month extra. You will cut several... are you sitting down?  YEARS off your loan. \n\nSo do not waste your time doing a refi. I mean if it drops a few points sure, but if it is less than 3 points Im not moving.
325318
I am 24 four years old and started a Roth IRA three years ago.  It took $250 to open an account.  After that, I set up an automatic deduction of $50 from my checking account once a month.  Aside from that, I contribute 10% of my income tax return each year.  Right now I have about $5000 in stocks.  I know it is not a whole lot, but the benefit is compounded over years instead of waiting until I am 40 to start saving.
512379
Let her know that you will not get the money until you turn age 35. It will give you more time to learn how to judge the intentions of this one and others. Do not broadcast you inheritance to any more people!
18072
Yes. Its true that you don't have to make withdrawals until you are 70 ½, but most people are looking to start withdrawals earlier than this. Chances are if you are young now you are in a lower tax bracket than you will be in when you retire. \n\nFacts:\n\nYou will be taxed based on the bracket you fall under when you make withdrawals. \n\nSolution:\n\nConsider making contribution to a ROTH IRA if you believe you are in a lower tax bracket now than you will be in when you retire. This is also save because you are getting taxed NOW, so when you go to take the money later it is tax free. It is always a good idea to diversify your money to various funds. In this case you are protected in case the Tax rate increases greatly for some variant reason.
43529
Wow, I am 37 too!  I have $60,000 dollars in my 401K account. Congratgulation, you have more than I do.  You should be proud of yourself and I really mean it.  \n\nGood saving, keep it up, James!
567172
with corporations no longer funing your retirement and cutting back on medical insurance and everyone talking about privatizing social security. you need to be activly engaged in your investments. no sleeping on the job...\n\nif you are 25 and save $400,000 by the time you are 67, it will generate about $2000/month... can you live on $2000/month?.... but before you answer, remember that in 42 years from now, with 3% inflation it will spend like it's only $573. that will be for your rent, food, bills and medical. BUT... if your rent today is $1100, in 42 years the same place will cost you $4000..... and what's worse, you will probably live for an additional 30 to 40 years... the numbers just get worse...\n\nif you want to sleep on an investment, you'll be sleeping in a cardboard box eating an occasional can of cat food.\n\nwe all need to wake up and learn to invest
16616
I could write an entire paper on this subject.  However I'll give you a few tips to get you started.\n\n1: Those who understand interest collect it.  Those who don't pay it.  There are things in life that you must take out a loan in order to obtain, and it is even a good thing for certain things such as a house.  However most items you should make payments to yourself and then purchase it.  You can save an incredible amount of money by doing this.  For example; get by with the old clunker car you have and instead of paying the bank $500 a month for a new one, save it in an interest bearing savings account until you have enough to pay cash for it. Same goes for the toys. If you want a new 48" HD flat panel TV, make payments to yourself until you have enough to purchase it. DON'T get the loan.\n\n2. Start putting  money in interest bearing fund.  An IRA (individual retirement account) is an excellent choice.  Do not worry if you can not afford to put away much each month.  If $10 is all you can handle that is fine, the important thing is to start.  If your place of employment offers a 401k, you should definatly take advantage of it.  Many times they will match a certain portion of your contribution, which in a sense is a payraise.  ALso by putting your money into such funds you can't just go to the bank and draw from it which is a good thing.\n\n3.  Whenever you get a payraise, or take a different job that pays more, you should save most of the raise rather than spend it.  You have been getting by with the old salary and are use to it. At least save half of the raise.\n\n4.  When you start saving it will seem that your savings are not growing very fast.  But you will be surprised a few years down the road just how much it begins to grow.  If you have a $100 dollars in savings an earn 7% interest on it in a years time you have made only seven dollars.  But  the more you save the more that 7% means. When you have $100,000 dollars in your accountd that 7% equates to $7,000 dollars.\n\nEven people with meager incomes can become independently wealthy over time.  Just don't expect it happen overnight.\n\nI have been saving for 16 years now and my net worth is now slightly over a million dollars.  When I started saving my yearly salary was about $24,000/year.  It is currently about $70,000.  So you see I don't make an extreme amount of money, but I have been able to save a fairly good amount.  It can be done, it just takes perservance.\n\nBest of luck!