Smart Retirement

I'm sure a lot of these younger people don't have enough education about saving, have no game plans and no coaches.  No one taught me about it in school or college/university.  I learned from a good friend (who is a multi-millionaire) a few important concepts that has help us out a ton!  One of them being the Rule of 72...

Rule of 72: Take 72divide it by your ROR%, and than = # years it takes for your $$ to double(x2)

Example:

$10,000 -

@3% (72/3=24) = in 24 years, $10,000 doubles to $20,000

@6% (72/6=12) = in 12 years, doubles to $20k, in 24 total, it doubles again to $40k.

@12% (72/12=6) = in 6 yrs $20k, in 12 yrs $40k, in 18 yrs $80k, in 24 yrs $160k.

This is also known as the "banker's rule", because the bank might give 3%, loan it out at 12%, make $160k, pay back $20, and keep $140k!

I'm 28 and I have a 401(k) at work (maxed out the match), and both my wife and I each have a Roth IRA.  We currently save right around $500/month and have just over $40,000 in our retirement accounts.  We have no debt (probably will end up with a mortgage soon though when we purchase a home, but no credit cards, no car loans, no student loans, etc.).

In our accounts, we have funds such as Fidelity Growth Fund, Invesco Van Kampen Equity & Income, American Funds Growth Fund of America, etc.  All these funds since inception have 10%+ rates of return per year.  All of these funds are great for me! 

(This is not a solicitation and I am not suggesting these funds to anyone, I'm simply stating what I have personally.  Please reach out to a licensed investment professional for a prospectus for all the information needed to make an educated decision)