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50s
"A good investment rule of thumb is: 110 – your age = percentage of plan you should have in stocks," says Eric Tyson. "The rest should be in a bond index fund." After age 50, you can take advantage of the 401(k) catch-up provision and add an additional $6,000 to the $18,000 contribution limit. Another way to beef up retirement savings at this point is to consider downsizing your home. "The IRS lets you profit $250,000 ($500,000 if you're married) tax-free from the sale of your house," says Tyson, who suggests putting much of what's left after the purchase of your new home into retirement accounts.
From the
March 2008 issue of
O, The Oprah Magazine
