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Kiplinger: Time-Tested Tactics to Build Your Wealth

By KIPLINGER/ Financial Juneteenth | 3/16/2017, midnight

Here, we offer advice on how to build, protect and enhance your wealth, time-tested strategies to help you keep your eye on the ball, and our top tips for finding value, so your hard-won wealth doesn't leak out in dribs and drabs. We devote a section to the biggest goal of all -- a secure retirement. And because life isn't all about making money, we include fulfilling ways to give back. Take a look.

Save Early and Often

The sooner you start to save, the easier it will be to amass a comfortable nest egg -- thanks to the power of time and the magic of compounding. A 25-year-old who saves $450 a month in a tax-deferred retirement account and earns an average yearly return of 7% will have about $1.1 million by age 65.

If the same investor waits until age 35 to start saving, she'd have to sock away $950 a month to reach roughly the same balance by age 65. Try to save 15% of your income, including any employer match for your retirement plan. If that's not doable, put away as much as you can and increase the percentage as your income and budget allow.

"Getting started, even if you're saving 3% of your income or $10 a week, is the critical goal," says Molly Balunek, a certified financial planner in Cleveland. "Once you see progress, it becomes easier to save 1% more, or $5 more a week."

Create an Emergency Fund

If you have a dedicated stash of cash at the ready in case of a job loss or an unexpected bill -- say, for a major car repair or hospital visit -- you won't have to resort to racking up credit card debt or, say, tapping retirement savings to cover the tab.

Squirrel away at least three to six months' worth of living expenses in a safe, easy-to-access savings or money market deposit account. (For a more personalized amount to save, use HelloWallet.com's tool.) Look for an account with no monthly fee, a low (or no) minimum balance requirement and a competitive rate, such as the Synchrony Bank High Yield Savings and the GS Bank Online Savings accounts. Both recently yielded 1.05%.

Make the Most of Employer Incentives

For the slow-and-steady way to get rich, take full advantage of your company's 401(k). You can contribute up to $18,000 ($24,000 for people 50 and older) in 2017 to this pretax account; your employer may kick in another 4% to 6% of your pay, or even more. Many companies enroll employees automatically, at a contribution rate of, say, 3% of their salary. But aim for 15% of your income, including the company match, from the beginning of your career until the end. If you have to cut back for a few years -- say, to buy a house or pay college bills -- try to kick in at least enough to get the full company match, and boost your contributions later to get back on track.