Financial planning at 5 stages of life

First real job
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First real job

You're young and you're broke, thanks to student loans or credit card debt. So when a financial planner broaches the topic of retirement, you may wonder if the planner lives on a different planet.

But now is the best time to start saving for that big event. "Time is your biggest ally," says Bruce Stroup, a financial planner with Retirement Solutions in San Antonio. "The earlier you start, the better off you'll be."

At this stage, most financial planners will advise you to participate in your employer's 401(k) plan and help you plan to gradually increase your contributions.

"A critical problem for young people is cash flow," says Dominick Paoloni, founder and president of Investment Protection Service in Lakewood, Colo. "Ask the planner to analyze your cash flow before determining whether to invest in nonliquid investment vehicles like tax-deferred IRAs, where you are penalized if you need to withdraw the money. Also look into Roth IRAs, which are beneficial for those starting out in a career who have low tax rates and may need access to the funds in case of an emergency."




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