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Question: Whats your advise to re-build my 401k as well as my savings account after being laid off for 9 months. i'm 50.?

(Posted by: noami on 2010-02-27 16:10:56)

I'm divorced, head of household and 50. I must wait 1 year before being able to participate in my new companies 401K retirement program. Considering re- building my savings first with a 6 month cushion. Thanks for your advise

Posted by: Suzette65 on 2010-02-27, 19:47:37

First, set-up a savings account with a separate bank(preferably a credit union), that is not close to you. Have a set amount of your check directly deposited to that account each pay period. To avoid taking any money out, make sure to also not get a debit card or any card that is tied to the account. You want to make sure that you only be able to withdraw money in person. If you do this, you will find that it is easier to save money than you think. To re-build your 401k, i would start by taking advantage of the company match if any for a year. After a year, i would be as aggressive a possible with the money i have deposited into the account. It will take time but if you do it in the order i suggest, you will be able to save a significant amount of money quickly.

Posted by: Judy on 2010-02-27, 16:18:11

You don't have a tax-deductible IRA account set up at a discount broker like Charles Schwab or Fidelity? Buddy,,, it's time to get on the ball..... Call Chuck today at 800-435-4000 Open a tax-deductible IRA, at your age a ROTH does not make any sense. If you have a mortgage, another way to save is to pay off that mortgage. Easiest way to save 5 or 6%. Once you get on that 401K, put the maximum. Not just what the match, but the full 16% maximum they will allow. Do that on top of contributing 6K a year into that tax deductible IRA. In that IRA, invest in cd's until you feel comofortable enough with stocks or mutual funds. - or just keep it in long term (20 or 30 year cds paying high interest). A lot of people only start thinking about their retirement in their mid 40's. You are not that far behind - so don't put yourself down - but do get on that ball. You'll need about 500K to retire above poverty level. Google Schwab retirement calculator tonight. Fidelity Investments also has a good one. /