Whether you're just getting started saving for retirement or you're nearing your target, we name the best tools and recommendations to help you reach your financial goals.
BEST ALL-AROUND RETIREMENT ACCOUNT
Roth IRA
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There's no up-front tax break, but decades of tax-free growth, plus tax-free income in retirement, make the Roth IRA a winner. And it offers plenty of escape hatches for other financial goals, such as buying a first home or paying for college.
In 2007 you can contribute up to $4,000 ($5,000 if you are 50 or older) as long as your income doesn't exceed $114,000 if you're single or $166,000 if you're married. Learn more about why you need a Roth IRA.
BEST 401(K) OPTION
Roth 401(k)
Earn too much to contribute to a Roth IRA? Many employers are offering Roth 401(k)s. As with Roth IRAs, there's no up-front tax deduction, but withdrawals are tax-free in retirement. And there are no income-eligibility limits (although workers earning more than $100,000 may not be eligible to contribute the full amount).
As with traditional 401(k)s, employees can kick in up to $15,500 this year, plus an extra $5,000 if they're 50 or older. Find out if a Roth 401(k) is the right choice for you.
BEST TARGET-DATE RETIREMENT FUNDS
T. Rowe Price
It seems everyone is offering these autopilot funds, which invest in a diversified mix of assets that become more conservative as you near retirement. But target funds are not all created equal. Ideally, you want a fund with low fees -- less than 1% per year -- and a substantial allocation to stocks. We continue to favor funds from T. Rowe Price, which invest a bigger chunk in the stock market than their competitors do.
To get started saving for retirement, see our 30-Minute Investing Start-Up Kit.
BEST ONLINE RETIREMENT PLANNING SOURCE
Fidelity Retirement Quick Check
Click on MyPlan Snapshot at Fidelity.com and answer just five questions -- age, income, monthly savings, current balance and investment style -- for an instant look at how you're doing, plus suggestions on how to improve. Fill out the more detailed Quick Check questionnaire (it takes about 30 minutes) to get a better idea of where you stand. The service is free to anyone who registers.
BEST IRA FOR KIDS
Scottrade
Not only can you establish an IRA for a minor, but at Scottrade you also enjoy one of the lowest minimum investments in the industry: $500. As long as your child has earned income, he or she can contribute up to $4,000 a year to an IRA, or up to his or her total earnings, whichever is less. We suggest a Roth IRA. Learn the rules for opening a Roth IRA for kids.
BEST IRA FOR NEW INVESTORS
Fidelity
Open a SimpleStart IRA and you can avoid the usual $2,500 minimum investment by setting up an automatic contribution of $200 per month. There's no annual fee. You can invest in a Fidelity Freedom target-date fund or choose any of Fidelity's other funds.
BEST ROLLOVER IRA
T. Rowe Price
Changing jobs or retiring? Roll over your 401(k) or IRA to T. Rowe Price and you'll get comprehensive investment advice plus annual reviews for a one-time fee of $250. If you transfer $100,000 or more, the fee is waived.
BEST LONG-TERM-CARE INSURANCE
John Hancock
Metlife
Neither of these major companies has ever raised premiums for existing policyholders. Genworth is seeking rate hikes for the first time since 1974, but it offers the most flexibility in home-care services.
Learn the ins and outs of long-term-care insurance.
BEST HAVEN FOR EMPTY-NESTERS
Seattle
Downtown Seattle, which bubbles with the energy of trendy restaurants, intimate theaters and funky nightclubs, is attracting the 50-plus crowd to its close-in neighborhoods. And there are plenty of outdoor activities, such as biking on the 27-mile Burke-Gilman trail, hiking in the Cascade foothills and boating on Lake Union. Bonus: Washington has no state income tax.
See our Best Cities package for great places to live in every stage of life.
BEST INSPIRATIONAL RETIREMENT GUIDE
Encore: Finding Work That Matters in the Second Half of Life, by Marc Freedman
This book challenges baby-boomers to build a better world through a second career and provides concrete steps to help them find their next job.
See "I Flunked Retirement. Twice." for more info on working after retirement.
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SEP IRA Contribution Limits for 2024 and 2025SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 in 2024 and $70,000 in 2025..
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Roth IRA Contribution Limits for 2024 and 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
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SIMPLE IRA Contribution Limits for 2024 and 2025simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
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retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
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Roth 401(k) Contribution Limits for 2025retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
