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I'm almost 40 yrs old, & I want to put a aside some extra $ for retirement. I'm a novice when it comes to investing, & could sure use some advice. For my retirement, I presently have 26K in an traditional IRA, 6K in a Roth IRA, 5K in a Universal Life Ins policy (that I'm in the process of canceling), 26K in a SEP IRA (that my employer is not longer contributing to), & 15K in a YMCA Retirement Fund. 78K total. I max out contributing to my Roth IRA. My SEP/IRA & YMCA Retirem't Funds are employer contribution only. Last year I was talked into the opening the above mentioned "Flexible Premium Universal Life Insurance w/ Indexed Feature." Much to my surprise, at the 1 yr mark of that account, I had 30% less than I contributed due to "expense charges." I'd like to put aside about $500/mth, in a relatively safe savings/investing vehicle. Any guidance would be truly appreciated, & is much needed.
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As you know, there are no 100% safe investments. However, government-backed investments are fairly close to being risk free. But you will “pay” for that safety in lower returns. The risk-return relationship is often depicted as a triangle with the lower-risk, lower-return investments listed at the base (for example, http://www.extension.org/pages/The_Risk_/_Rate-Of-Return_Relationship). As one moves up the triangle the investments generally provide a higher return and higher risk.
· Your first task is to determine how much risk you are willing to take.
· Second, identify investments with the appropriate level of risk.
· Then learn as much as you can about investing and about each type of investment before you invest.
A good place to start is with a basic personal finance book (most libraries have a good assortment of personal finance books). There are also many basic money management and/or investing courses available online which you might want to take (for example, http://money.cnn.com/magazines/moneymag/money101/ and http://www.investing.rutgers.edu/ ).
To learn more about government-backed investments, you will want to start at: http://www.treasurydirect.gov/indiv/products/products.htm
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