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Most of us remember when our parents and grandparents worked for the same employer for 40 years, or so, and retired with generous pensions. And Social Security.
Those of us who still have pension, don't count on them too much. An employer may go belly up, or just be facing hard time and the court will allow freezing or changing the rules of pensions.
And then, many jobs today don't pay that much to generate enough money to keep Social Security floating, seeing that SS tax is a percentage of income.
The alternative - be in charge of your own savings. If your employer offers a 401K - grab it. Start small, 1% or 2% and be a beneficiary of a compounding interest. The amount will be taken from your paycheck before you even see it, yet your take home will be reduced by less, since taxes would be lower.
If your employer does not offer a 401K, open your own IRA. Again, see if you can have it automatically deducted from your paycheck and deposited with the custodian.
Don't know which mutual funds to choose? Select a "life cycle one" with name that has, say, 2040 in it, if this is the year you would reach 67. Such funds start agrressively and as the years go by, move to more conservative investments.
Once you open an account, don't touch it! If you change jobs, get it rolled over to a new place.
Go with established family of funds that has low cost ratio.
It was said that if people in their 20s or 30s put the maximum amount to IRA - in those days it was $2,000 - for 10 years, and then never added a penny, that they would still accumulate a nice sum of money when they are old.
So, please, start saving! Talk to your HR and open a 401K account. You may be working for a lousy employer with no benefits and no pay raise, but these savings will be yours!
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