Retirement Investing!


Decoding the Language of Retirement Investing

A couple months ago my sister came to me with a request: could I help her open up an IRA? Like myself, my younger sister is self-employed, which means she’s entirely on the hook for preparing for retirement. (Her self-employment is way cooler as she works in film and even had a short she co-wrote and directed premier at TriBeCa film festival!). But due to other short-term financial goals and variable income, she didn’t have a huge lump sum to put into an investment account. Instead, she opted to open one and be able to make modest monthly contributions. She asked me if it was even possible to do that or would she need to save up a bunch of money just to get started?

Investing isn’t just for the wealthy

t’s a huge misconception that investing is something only the wealthy can afford to or have the knowledge to do. Part of the reason that belief exists though, isn’t completely unfounded. Initial minimum investments used to be a big barrier to entry for a rookie investor. Sounding just like the name, an initial minimum investing, was the bare minimum amount you needed in order to gain access to investing in a certain fund. But sometimes those minimums are $1,000 or $3,000 or $10,000. That’s a lot of money and certainly not a sum all rookies have available to put into an investment in one go. It’s part of what made my sister feel as if she wasn’t ready to start contributing to an IRA. Fortunately, there are some options out there for funds with no minimum initial investments, which can help you get started with a more modest sum.

The important thing to recognize is that putting money into a retirement vehicle means you are an investor! We say “save for retirement”, but really, you’re investing for retirement! You are an investor and you don’t have to be wealthy to get started!

The 401(k) and 403(b) are typically plans offered by an employer. Often the 401(k) are offered by for-profit companies while the 403(b) is utilized by non-profits. These plans usually come with the incentive of an employer match. There is a solo 401(k) option for the self-employed.

Types of retirement plans!

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