1. Start with Your 401(K)
If you have access to a 401(k), it’s one of the best places to start investing. Many companies offer matching contributions. Ask your HR department how much you need to save to max out your company match. If you can’t afford that much, start with what you have and then go from there. An important goal is to try to save enough to capture the company’s match. If the company matches 3%, set aside at least 3% in your 401k.
2. Start with What You Have
Most people assume that there’s no point investing unless you can afford to contribute hundreds of dollars a month. But investing is like working out – you have to start with where you are. If that means you can only save $5 a month, that’s fine. The habit is the most important part.
3. Try to Increase Contributions Every Year
If you’re starting low, make it a priority to increase your contributions when you can. For example, if you get a raise, put those funds toward your investments.
4. Open an IRA
If you don’t have access to a 401(k), you can open an Individual Retirement Account (IRA). Traditional IRAs may let you deduct contributions on your taxes (depending on your income), while Roth IRAs let you withdraw funds in retirement tax-free.
5. Don’t Forget to Choose Your Investments
One of the biggest mistakes people make is opening an IRA or 401(k) but not actually choosing an investment. Investment accounts are not like savings accounts – you have to actively decide what you’re investing in.
6. Can’t Pick an Investment? Choose a Target-date Fund
If you’re feeling overwhelmed by the number of investment options, one possible option – may be a target-date fund. These are funds that automatically change their allocation as you get older. Choose a target-date fund that is closest to the year you want to retire. However, you’re still subject to the same market risk that other types of investments have.
7. Don’t be Afraid of Risk
Many women find themselves investing too conservatively. And if you do so, it may be harder to achieve your retirement goals. Don’t be afraid of being more aggressive in your investing.
8. Avoid Insurance Salesmen
If you need help with your investing, you can hire a financial advisor. However, if the person tries to sell you whole life insurance or an annuity – be wary. These are often sold to individuals because they have high commissions for the advisor.
Zina Kumok has been a freelance personal finance writer for about 10 years and joined C.H. Douglas & Gray Wealth Management as Associate Advisor and Marketing Manager in April. She has written for outlets such as Forbes, Business Insider, and US News, as well brands like TurboTax, Mint, and Prudential. She is also launching a speaking and workshop business focusing on financial literacy – ranging from high school students to adults.
SUPPORT LOCAL JOURNALISM
Like the cool friend who always knows where to go. That’s our newsletter. Sign up for weekly recs, member perks, and early access to events—plus, get our ultra-exclusive Hidden Gems in Indy guide the second you join. 5,500+ local legends already have it. Don’t get left out. Sign up now.
