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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81641  
Subject: Re: Which Premium Site??? Date: 1/3/2011 10:13 AM
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I am 59 and up to now have done a poor job preparing for retirement. I need to start catching up, so I'm wondering your opinion on which of the premium sites would be best for me Stock Advisor or Rule Your Retirement.

At 59, with little saved/invested for retirement, I would suggest you will probably be better off just perusing the free boards here and actually investing the money you would have spent on a premium service into low cost-index funds.

I am at 2nd year in new job that has 401K. Am I best to hit that as hard as possible or 1 of the IRA's

My suggestion would be to do both your 401(k) and an IRA, assuming that your 401(k) has a reasonable selection of investment choices and reasonable expenses. Even better would be a 401(k) that provides a match.

Every dollar that you put into a 401(k) now saves you money in taxes for this year. Since you have 'done a poor job preparing for retirement', it's a pretty reasonable assumption that your income in retirement will be significantly less than your current income, and therefore, your taxes in retirement are likely to be significantly less. So putting off taxes from today provides you with additional capital to invest, and will let you pay lower taxes on your investments than you would pay now.

If you are eligible for a deductible IRA, then the same reasoning applies. If you are eligible for a Roth IRA, there is no difference in taxes this year, but you are setting up a tax-free income stream for future years. So either option has value.

At 59, you are eligible to contribute $16,500 to a 401(k) plus a $5,500 'catch-up' contribution, and $5,000 plus a $1,000 'catch-up' contribution to an IRA. As a late starter, you need to try to get as close as possible to these maximums. Accomplishing this will also help you learn to spend less, which is the other thing you need to focus on as a late starter.

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