Road to Financial Maturity Investing & Retirement

Investing In order to reach long term financial goals, such as buying a house or saving for retirement, you must invest. The Rule of 72 is a guideline for determining how many years it will take an investment to double in value. To calculate the number of years required for an investment to double in value, divide 72 by the annual percentage rate (APR) Example: If you invest $1,000 at 3 percent interest, how long will it take for your money to double? 72/3= 24 years to $2,000 How long will it take $10,000 to double at 8% interest? 72/8= 9 years to $20,000 That is the power of compound interest!

Retirement Keep in mind what we have learned about compound interest and the rule of 72, and start saving and investing now! Mutual Fund: pool on money managed by an investment company and invested in multiple companies, bonds, etc. – Offers investors a variety of goals depending on the fund and its investment character – often used to generate income on a regular basis or to preserve an investor’s money

“Be nice to your future self and save for retirement!” 401(k): defined contribution plan offered by a corporation to its employees, which allows employees to set aside tax-deferred income for retirement purposes; in some cases, employers will match their contributions. Individual retirement Arrangement (IRA): tax-deferred arrangement for individuals with earned income and their non-income-producing spouses; growth is not taxed until money is withdrawn; contributions to an IRA are often tax-deductible. Roth IRA: retirement account funded with after-tax dollars that subsequently grows tax free.