This Business Week article on Money Central,
Build a nest egg without a 401(k),
dishes out some advice for young people (dubbed rather unceremoniously as Generation Debt) who don’t have the luxury of contributing to an employer-matched, tax-deferred retirement account.
Here’s the advice, with a little commentary:
- Open an IRA. This is good advice even if you also have a 401(k).
- Explore other savings options, like Simple IRAs if you’re self employed. Taxable accounts still work as well.
- Make saving and investment automatic, a la David Bach. Just be sure that you monitor the investments as well.
- Investigate indexes. Very carefully. Diversifying in an overbought sector just means that you have a lot of similar stocks going down.
- Follow the 10% rule. This is a bare minimum for what you should be saving. If you’re pulling in $50k-$200k, 15% is more like it, according to Michael Masterson’s Automatic Wealth.
- The time is now, to play and to save. Better yet: Get your toys to pay for themselves in some way. Use a hobby or a talent to bring in a little extra money.
So…I have no 401(k) available and an IRA only allows for $4,000/year. I have no pension. No I don't work at some rinky dink job, I'm an engineer that supervises 15 people. I appear to be a part of an emerging disposable workforce. No benefits, no pension, no nothing except cash.
Does this mean I need to move out of the country or be forced to to steal food and medicine when I retire?