Retirement

Recent grads do not normally worry too much about retirement. It is the nature of the beast when you are under 30 to think about something that is at least 30 years in the future. But we all know that Social Security is probably in significant jeopardy and even if it is still in place when you retire it will probably provide less then 15% of your need.

So what to do? The answer today is to participate as soon as possible in your 401K. Max out and never draw on it. You get the power of dollar cost averaging and the power of compounding growth. The concept of dollar cost averaging is that if you invest the same amount every month, then when stocks are up you buy less and when it is down you buy more. This is a great way to build wealth. The second the power of compounding growth means you will be doubling your money every few years. I can still remember the month that my growth in my 401 K exceeded the amount I was putting in. A 401K participation is what allowed me to retire (kind of) at 50 with enough money to live on the interest the money makes.

So my advice is when you are young and healthy, the 401 K is probably the benefit to look for.