As a general rule of thumb, Jariwala suggests you put in at least as much as your employer matches so you don't miss out on the "free" money.Īnd if you have more money to invest after maxing out your 401(k), you can open an IRA, which is a special class of savings account that offers some protection from taxes.
And you can always contribute more - in 2022, individuals can put up to $20,500 into a 401(k). Combining your contribution and your employer's, that would be $320 a month, or $3,840 per year. Second, your employer may match a part or all of your contribution.įor example, if you make $4,000 gross a month and your employer matches up to 4% of your salary, you would need to contribute $160 to receive the full employer match. First, a percentage of every paycheck will go into that investment, making contributions routine and automatic. If you work for a company that offers a 401(k) or employer-sponsored retirement account, there are two good reasons to opt in. But only 57% of Americans have some form of retirement savings, according to a recent survey published by Personal Capital, an online wealth management platform. Having the financial independence to retire comfortably is top priority for most people, according to Farnoosh Torabi, CNET Money editor at large. Automate investing (and always take 'free money')įor most of us, a major investment goal is building a nest egg for retirement. Likewise, given the significance of climate change, a growing number of investors are establishing or reconfiguring their portfolios to support companies that are more environmentally friendly. Socially conscious investing has become an important touchstone for many, according to Anjali Jariwala, certified financial planner and founder of Fit Advisors. Your goals may include external and even nonfinancial considerations. Establishing clear objectives, and revisiting them annually, will help inform your timing, strategy and appetite for risk. Though it can be challenging to articulate your life goals or envision your future, doing so is a critical first step in investing. For example, right now you may be concerned about fortifying your nest egg against surging inflation and rising interest rates. Your goals can also evolve, and the larger economic picture should influence your approach. Though every individual has their own reasons for investing, most of us have common goals: Saving up for retirement, buying a home and perhaps paying down student debt, starting a business or funding your child's college education. "It's important to understand what your goals are to inform your timeline and build a portfolio that takes on the appropriate risk and return characteristics to meet those goals." "I ask them what goals they have that will require financial resources in the future," Lee said. James Lee, certified financial planner and president-elect of the Financial Planning Association, always begins working with his clients by going over their life goals, even before talking about investment strategies. To help you make smart money decisions this year, CNET spoke with investment experts who explained methods to balance tried-and-true strategies with newer opportunities to support your investment goals. How can beginning investors navigate today's economic landscape? Building your wealth and saving for retirement requires careful planning and a long-term strategy.
Now that anyone can broadcast their investment tips from a smartphone, it's harder to identify trustworthy advice: Following the wrong TikTok financial guru or Twitter crypto bro could lead to a major financial mistake.
It's an intimidating time to be a new investor.Įxpert advice is crucial for beginner investors, but social media and the connectivity of the internet means there are more voices vying for your attention and money. You may be tempted to skip out on Investing your money given the current economic climate. This story is part of Recession Help Desk, CNET's coverage of how to make smart money moves in an uncertain economy.
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