Retirements is going to be long and expensive. You want to maximize every
penny you are saving. Here are some tips:
1) SAVE EVEN A LITTLE MORE - The ideal amount is 15-20%. If that sounds
like a lot to sock away each pay period, do it gradually and get the company
match if possible.
2) REDUCE COSTS - New government rules require your 401(k) provider to
show how much you are paying in fees. Your all-in (total) costs should be no
more than 1% per year of your total balance and ideally less.
3) REBALANCE - What's the right balance of equities versus bonds in your
retirement portfolio? Many people use the formual of 100 minus their age
to decide the percentage of equities versus fixed income. If you are 40, 60%
stock to bond using this formula. You could be at 70-30 now which is more
aggressive. To get back to your desired allocation you may need to sell
equities and put more money into bonds. Rebalancing is crucial to keeping
returns steady.
Sheila McKinney
