To Do This Year:
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- If you have stopped contributing to your retirement account, start again immediately.
- If your employer offers a 401(k) or similar retirement plan, make sure you're signed up and contributing. If you don't have a 401(k) at work, you should have your own IRA.
- Know exactly where your money is invested. Pull out your retirement account statement and find out what your savings are invested in.
- Using Morningstar.com, compare your investments' performance to others in the same asset class.
- Determine what level of risk you're comfortable with—and what's right for someone your age. Then make sure your investments reflect that.
- Consider "target date" mutual funds so you don't have to rebalance your investments yourself every year.
- If you don't feel comfortable making these decisions yourself, get help from a qualified financial professional. Ask your employer if your plan offers a free or fee-based advisory service, or find one from the several recommended in this chapter.
- Increase your retirement contributions today, and if you don't feel the pinch, raise them some more. Your goal is to reach the maximum contribution allowed.
Adapted from Start Over, Finish Rich. Copyright 2009 by David Bach. Reprinted by permission of Random House, Inc.