The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. By Richard Schmitt NEW YORK ( TheStreet) -- "You can't get there from here." Although not normally the response -- except when driving in New England -- you might hear someone say that when asked for directions for the way to retirement. When you consider that two of the three pillars underlying retirement, income security -- Social Security and employer-sponsored retirement plans -- has fallen into some disrepair; personal savings takes on significantly more importance. For that reason, safe driving tip no. 1 on the road to retirement is:
Save fuelIf fuel (gas or electricity, your choice) is the lifeblood of your car, cash is what drives your retirement savings. Rather than gunning your consumption engine while working your way along the road to retirement, just set your saving on cruise control at a decent speed and avoid braking to further your chances for a smooth ride. Only after dutiful saving (and investing) during your working journey can you consider coasting into retirement.
Savings also builds capital upon which you can increase your take with investment earnings. From another perspective, savings beget investment earnings, reducing your burden for future savings. Of course, you lose any chance of earning a return on your investment if there is no invested savings to begin with. Don't delay in saving for retirement and expect to be able to go full throttle near the finish line to make up the difference. Fast and furious may make driving more fun, but starting early at a slow (or maybe moderate) and steady pace works best for saving. Then you can direct your attention to investing like a road hog in an upcoming Safe Driving Tip No. 2. This article was written by Richard Schmitt, author of "401(k) Day Trading: The Art of Cashing in on a Shaky Market in Minutes a Day." Outside of his appearances on Fox Business News, KCBS, and Business News Talk Radio, he is an Adjunct Professor teaching retirement planning at the Edward S. Ageno School of Business at Golden Gate University.
|Readers Also Like 401(k) Contributions Are Not Always Good|
|The New Retirement Rulebook|