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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76421  
Subject: Re: Retirement planning and other considerations Date: 8/20/2000 10:45 AM
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Hello, I am 24 and will start investing in the near future. At this time I am examining my investment opportunities, as well
as deciding how to start on my (early) retirement.

Note that I have read the fool.com investment/retirement sections until my head aches (whether it is from the content or
delivery I won't say), and so I feel that I am now at least an official 'beginner' Fool.

Anyway, I am not in a rush, but would like to hear any advice from this board.

To begin, currently the following life-plan is my overall assumption/target: begin investing for my future, own a home, raise
2 kids and send them to college, and live a comfortable existence when I retire -- I would like to be [able] to retire at 50,
although I may not elect to do so until much later.

I am trying to decide on how to best begin investing without hurting my near-term financial needs. I would like to start
investing money now so that in 30 years I'm laughing my way to the bank. However, I have to consider, among other
things, the following:

1. I rent now, but want to own a home in the future (my rent is dirt-cheap at the moment fortunately)
2. I very well may start a business in the next 3/5/10 years

Thus, I am afraid to tie up too much money into retirement plans that are hands-off until 40 years down the road because
I [may] need the money in the near-future. Yet, I realize that money needs to be invested for retirement now so it will be a
painless process.

In your opinion, at my age is it best to use normal investing rather than 401(k) or IRA's? I realize that 401(k)'s offer
FREE MONEY in most situations, but my current employer only matches the first $100 (small company). The problem
with an IRA is that if I withdraw for any reason other than a home purchase I will be penalized, which will hurt the overall
investment.

Just looking for comments, links, and leads.


Your post was well written.

You mention that you will begin to invest in the near future. Is this next month, next year or never. I think the first rule is to start now, not tomorrow.

There is a balance for all you needs and no one maybe able to figure it out so take a reasonalbe approach and get started.

Get into the 401k so you get the $100. This is part of starting today but not being sure how much you can lock up until retirement. Remember some 401k plans let you borrow for certain needs.

Next go to the ROTH. The $2,000 a year you put in can be taken out for a home.

Start a small regular purchase plan for a mutual fund.

You are paying cheap rent. Well lets figure out what your normal rent would be and put this into a savings fund for the home.

You have a lot of future needs (like everone else)so the question is not should I save (invest) but where to put the money. If you do nothing, for the near term, save a good part of your income in a money market account if nothing else. The point is money spent is gone but money saved can be used to build your future.
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