Alert
Close

Watch the NASCAR race on Sunday at Martinsville Speedway. Join the Drive to End Hunger!

Highlights

Close

You and Your Town Contest-You could win an AARP RealPad

AARP Auto Buying Program

Contests and
Sweeps

$10,000 Winter Escapes Sweepstakes

Beat the cold and cozy up to a chance of winning $10,000! See official rules.

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

Have You Saved Less Than $50,000 for Retirement?

It's never too late to build your nest egg

Of course, all of this is a moot point if you're not making smart decisions with your investment portfolio before and after you retire. Here are a few investment principles you can apply to your 401(k):

• Diversify. Don't put all of your money into one class of investments. If you spread the money around, when one investment is down, there's at least a chance another one will be doing well.

• Take a little risk. Is all your money in the "safe" option? If the return is less than the inflation rate, you're losing money.

• Consider automatic options. Life-cycle or target-date retirement funds are "set-it-and-forget-it" programs that automatically select a diverse set of investments based on the appropriate level of risk for someone your age. They also automatically rebalance each year to ensure that market gains and losses have not left you with too much exposure to any particular class of investment.

• Beware of fees. Management fees are subtracted from your account. Even a one percentage point difference in fees can cost you tens of thousands of dollars over time. Your employer — or the free AARP 401(k) Fee Calculator (registration required) — can tell you how high your funds' fees are.

• Pay attention. Be sure to read your account statements and if you're concerned that an investment is not doing well, consider making a change. Your 401(k) provider — as well as other financial news and investment providers — should have tools that can help you choose the fund that's right for you.

• Plan for a long life. The Treasury Department has proposed new rules that would make it easier to use a portion of your 401(k) savings to buy annuities, which provide a guaranteed monthly income for life — regardless of what the market does.

If you're in your 50s and you're just starting to get serious about saving for retirement, you might be feeling a bit like Don Quixote reaching for that unreachable star. But by working a little longer, postponing your Social Security claim (thereby supersizing your monthly benefit for the rest of your life) and supplementing Social Security with another stream of guaranteed income (like an annuity), your heart, at least, may lie peaceful and calm.

Jean Setzfand is vice president of financial security at AARP.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Related Video

Money Makeover winner Judy Gallagher gets expert advice on increasing her savings so she can live comfortably when she retires.

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Life insurance: you are covered rain or shine

Exclusive annuities for members from AARP Lifetime Income Program from New York Life.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Homeowners Insurance
Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points