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Financial Planning / Foolish 401(k)s


Subject:  Re: New Fool needs advice Date:  1/3/2003  3:57 PM
Author:  FuskieFool Number:  15671 of 25792

You start off with a refrence to a hobbit and with the Force. You are truly a techie... <grin>

You have already gotten some other opinions so let me give my 2 cents worth. You are young but with a lot of potential life costs (especially if you choose to populate that new house with little techies). After contributing to your 401K, you have $400/month left over. The first thing you do is ignore what all the old fogies at the office are doing and focus on what your needs are.

Let's take a step back and evaluate your goals. First, you want to retire sometime around age 65-70. Second, you have an idea what kind of lifestyle to which you would like to be accustomed, so you need to guestimate, based on your current salary and inflation, what you income will need to be. From that you can establish your retirement target. There are many wonderful on-line calculators that can walk you through this process (check with your new 401K manager).

Once you know where you want to go, you have to determine your risk level in getting there. You are very young should be able to tolerate significant risk over the 40+ years you have to invest before retirement. Again, o