Post-Graduate Assignment: Start Saving
June 6, 2004
Time is on your side. Don't let it slip away.
Another batch of graduates is rolling into the work force, no doubt anxious to pocket their first paycheck.
My advice: Give some thought not only to how you'll spend the money, but also to how much you might save.
Sure, saving might not seem like a priority right now. But trust me: This is the time to start. If you can immediately get into the habit of socking away a little money every paycheck, you could save yourself from a lifetime of financial grief.
Giving at the Office
A year after graduating from college, I joined Forbes magazine in New York. With a wife pursuing a doctorate and a kid on the way, I didn't feel I had a dime to spare. But Forbes's treasurer phoned me up and badgered me into contributing to the company's 401(k). I'm grateful he did.
Today, it's my turn to badger. With any luck, your new employer will have a 401(k) or 403(b) retirement-savings plan. No matter how strapped you are for cash, sign up to contribute part of your paycheck, even if it is just 3% or 4%.
In return, you will get a fistful of financial benefits, including an immediate tax deduction, tax-deferred growth and possibly a matching contribution from your employer. Throw in 40 years of investment earnings, and the results can be truly extraordinary.
Maybe more critically, you will buy yourself some peace of mind. As you watch your account balance grow, you will have a comforting sense of financial progress. You will also give yourself room for maneuver later in life. Want to retire in your 50s? Unless you start saving regularly in your 20s, that's an awfully tough goal to achieve.
Your Friend IRA
If you're maxing out on your employer's retirement plan and you have additional money to save, consider funding an individual retirement account. But don't go for a regular IRA.
YOUR FINANCIAL FUTURE STARTS HERE
Looking for a low-budget way to get started in mutual funds? Consider these four no-load fund companies.
COMPANY TELEPHONE WEB SITE
T. Rowe Price 800-638-5660
www.troweprice.com TIAA-CREF 800-223-1200
www.tiaa-cref.org USAA Investment Management 800-382-8722
www.usaa.com Vanguard Group 877-662-7447
www.vanguard.com Instead, open a Roth. With a Roth IRA, there's no initial tax deduction. But everything withdrawn in retirement is tax-free.
"Even if the kids don't have the money, maybe the parents can give them the money to contribute to the Roth," says Ed Slott, an accountant in Rockville Centre, N.Y. "The point is to get the money in there and get it growing tax-free."
The Roth also offers an intriguing loophole: You can withdraw your annual $3,000 contributions at any time, without triggering taxes or penalties. Those taxes and penalties only kick in if you withdraw the account's investment earnings.
"When I first started contributing to my IRA, my big worry was that I couldn't touch this money until I was 59?," Mr. Slott recalls. "But with the Roth, there's no problem with that."
Thanks to the Roth's loose rules on withdrawals, it can do double duty, letting you save for retirement while also offering a handy source of cash, in case you get hit with a financial emergency or you suddenly need a chunk of change for a house down payment.
Making It Monthly
It doesn't take much money to get that IRA opened. Today, mutual-fund companies such as Baltimore's T. Rowe Price Associates, San Antonio's USAA Investment Management and Vanguard Group of Malvern, Pa., typically expect investors to pony up $2,500 or $3,000 to start an investment account. But if you set up an IRA, you can often get in for less. At T. Rowe Price and Vanguard, the IRA minimum is usually just $1,000, while at USAA you can open an IRA for a mere $250.
Still too steep? Some fund companies will waive their investment minimum entirely if you commit to investing a small sum every month through an automatic investment plan. With these plans, money is pulled out of your bank account and invested directly in the funds you choose.
For instance, T. Rowe Price won't insist on its usual minimum, provided you invest at least $50 a month. Similarly, New York's TIAA-CREF will waive its $2,500 minimum if you commit to regularly investing $50 or more, while USAA will let you open an account with an automatic monthly investment plan of $20 or $50, depending on the fund.
One warning: TIAA-CREF has said it may slap a $25 annual low-balance fee on accounts worth less than $1,500. The policy, however, has never been put into effect.
Anchor Your Portfolio
Which funds should you buy? If you are starting out as an investor, you probably don't have enough money to build a globally diversified portfolio using separate funds for large stocks, small companies, foreign shares and bonds.
But you still want to be diversified. To that end, try to find a low-cost fund that effectively gives you one-stop investment shopping by combining a host of stock and bond-market sectors in a single fund.
On that score, your best bet at T. Rowe Price may be its Spectrum Growth Fund or one of the firm's nine Retirement funds. At TIAA-CREF, a good choice would be its Managed Allocation Fund, which holds a mix of 60% stocks and 40% bonds. USAA investors might consider its Balanced Strategy Fund or its Cornerstone Strategy Fund. Meanwhile, at Vanguard, check out the firm's six Target Retirement funds and its four LifeStrategy funds.
Any of these funds would be a good core portfolio holding. As your account balance grows, you may eventually decide to ditch this core fund and build a portfolio using more specialized mutual funds. But you don't necessarily have to go that route.
Instead, you could keep your core fund and then gradually add other offerings to customize your portfolio. Want to tilt your portfolio toward bonds, or emerging markets, or real-estate investment trusts? You could combine a big position in your core fund with smaller fund investments in each of these sectors.
大学毕业生的作业：开始存钱
时间在你这一边，别让它悄悄溜走。
又一届大学毕业生加入了就业浪潮，毫无疑问，他们急于将人生的第一笔工资装入口袋。
我的建议：想一下你的花钱计划，同时也想一下你会存多少钱。
当然，存钱似乎不是当前的首要问题。但请相信我：现在正是开始的时候。如果你能立即养成从每月薪酬中存一部分钱的习惯，你可能一生都不会遇到财务麻烦。
401(k)
大学毕业1年之后，我加入了纽约的福布斯(Forbes)杂志。当时我的妻子正在攻读博士学位并且已有身孕，我觉得自己没有一分钱可存。但是福布斯的司库给我打了个电话，极力怂恿我加入公司的401(k)。我很感激当时他那么做。
今天，轮到我对你“说教”了。你的新雇主肯定会有一个401(K)或403(b)退休金储蓄计划。不论你多么拮据，你都应该申请加入该计划，即使存入的薪水比例只有3%或4%。
作为回报，你将获得许多财务上的好处，包括当即的纳税减免、延迟纳税的收益增长、以及你的雇主还有可能为该计划支付同样费用等等。假设你投资40年，收益将是非常惊人的。
也许更挑剔一点，你将会给自己买得些许心灵上的宁静。当你看著自己的帐户增长时，欣慰的感觉油然而生。你的后半生也将会拥有更大的空间。想在50多岁时退休吗？除非你在20多岁时开始定期储蓄，否则这将是一个非常难达到的目标。
你的朋友IRA
如果你在雇主的退休金计划中存入的钱已达到了上限，而你仍有余钱可存，那么你可以考虑开设一个个人退休帐户。但不是常规的IRA。
相反，你开设一个Roth个人退休金账户。这个帐户最初没有纳税减免，但是退休时从此帐户进行任何提取都是免税的。
Rockville Centre的会计师Ed Slott说，“即使年轻人没有钱，也许父母会给他们钱存入Roth存款。关键在于帐户中有钱并且让之实现免税增长。”
Roth帐户还存在一个有意思的漏洞：你可以随时提取每年3,000美元的支付金，而不必纳税或交罚金。只有当你提取该帐户的投资收益时，你才会纳税或交罚金。
Slott回忆道，“当我第一次开始向我的IRA帐户存钱时，我最大的担忧是我在59岁之前都不能动用这笔钱？但是Roth帐户就没有这个问题。”
由于Roth帐户在提取方面宽松的规定，这个帐户起到两个作用，一是让你为退休存钱，二是在你紧急用钱或房屋供款突然需要大幅变动时，它可以为你随时提供现金。
每月投资
开设一个IRA帐户不会花很多钱。现在，一些共同基金公司如巴尔的摩的T. Rowe Price Associates、圣安东尼奥的USAA Investment Managemen和Vanguard Group of Malvern通常需要投资者支付2,500－3,000美元开设一个投资帐户。但是如果你开设一个IRA，门坎则会降低。在T. Rowe Price和Vanguard开设IRA帐户的最低金额通常为1,000美元，而在USAA你可以仅以250美元开设一个帐户。
仍然太高？一些基金公司会完全豁免你的初始最低投资要求，前提是你承诺通过一个自动投资计划每月进行一次小额投资。在加入上述计划之后，你银行帐户中的钱就会直接投资到你选择的基金当中。
比如，如果你每月至少投资50美元，T. Rowe Price就不会坚持最低投资额。纽约的TIAA-CREF与此类似，如果你承诺每月固定投资50美元以上，它将豁免2,500美元的初始最低投资额。而USAA将允许你开设一个可以每月自动投资20美元或50美元的帐户。
警告：TIAA-CREF表示它将向帐户余额低于1,500美元的帐户收取每年25美元的低帐户余额费用。不过这项政策从未生效过。
锁定你的投资组合
你应该购买哪个基金？如果你作为一个投资者开始购买基金，也许你不会有足够的资金建立一个全球多样化投资组合，因为你需要分别购买大型股、小型股、外国股和债券。
但你还是想多样化。如果是这样，试著寻找一个通过将股票和债券组合在一个基金里面、提供一站式投资服务的低成本基金。
这这一领域，在T. Rowe Price你最好可能将宝押在其波谱成长型基金(Spectrum Growth Fund)或9个退休基金之一上面。在TIAA-CREF，管理配置基金(Managed Allocation Fund)是一个不错的选择，这个基金持有60%股票和40%债券。USAA投资者可能会考虑平衡策略基金(Balanced Strategy Fund)或它的基石策略基金(Cornerstone Strategy Fund)。与此同时，在Vanguard可以看一下其6只退休基金以及4个LifeStrategy基金。
这些基金中的任何一个都将是很好的核心投资组合。随著你的帐户余额的增长，你也许最终会决定抛弃这些核心基金，用专业化的共同基金建立一个投资组合。但是你不一定非得走这条路。
相反，你可以保留你的核心基金，然后逐步增加其他投资品种以让你的投资组合更符合你的需要。想让你的投资组合更偏向于债券、或者新兴市场、或者房地产信托投资基金吗？你可以在上面每个领域中进行小额投资，这样你就能在核心基金中建立一个比较大的头寸。
