I know that most of us are contractors and go from job to job and have no benefits. I was recently laid off due to a lack of work and began to think about how to prepare myself for the future. A few years ago I opened an IRA account and each month I send a check to my brokerage firm.
I would advise everyone to do the same. The maximum contribution is $4000 per year per person, so you and your spouse can each establish an account. Social security is a joke and will not be around by the time most of us are able to draw on it. By going from job to job, most of us will also have no retirement plan. It is up to each of us to establish our own retirement plan. You want to be able to live out your retirement taking trips or living in a nice house and not having to worry about living with your kids or looking for work just to pay the bills.
Just think, 4000 a year invested at 10% a year (the average of the stock market) equals:
$229,099 in 20 years.
$657,976 in 30 years
$1,770,370 in 40 years
It may be rough going from contract to contract, but with a little planning and dedication you can make sure that you have a nice retirement.
As far as investing goes, buy no load mutual fund that tracks the S&P 500 index and has a low expense ratio (<.5) and never buy any stocks from tips that you receive via email or fax.
Take care of yourself
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