AGES 25 TO 35: START SAVING NOWAGES 25 TO 35: START SAVING NOWYou're in the accumulation phase. What matters most is the amount you can save--and developing good money-management habits that will pay off in the future. Aim to set aside 20% of your income. First, focus on retiring debt, especially high-interest-rate credit cards. Ask your lender to cut rates on your cards to 12%, the industry average. In the current environment, lenders are more willing to listen. Invest in equities, especially now, when prices are low. With your long horizon, you'll benefit from the stock market's long-term performance. If you fear a layoff Layoff 1. When a company eliminates jobs regardless of how good the employees' performance. 2. A risk reduction, made by investment bankers, that minimizes the potential downside associated with a commitment to purchase and sell a stock issue unsubscribed by stockholders holding , build a one-year emergency fund; otherwise, make it a six-month supply of cash. Set up other savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: for retirement and perhaps for a first home and your children's education. If possible, max out in your retirement accounts. The recent financial turmoil, many advisers say, is a once-in-a-lifetime buying opportunity. The most you can contribute to a 401(k) plan and similar retirement accounts in 2009 is $16,500 in pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern dollars. For your IRA Ira, in the Bible Ira (ī`rə), in the Bible. 1 Chief officer of David. 2, 3 Two of David's guard. IRA, abbreviation IRA. , consider a target-date fund, which adjusts your asset mix as your retirement date approaches. And maybe convert a traditional IRA Traditional IRA An IRA that is not a Roth IRA or a SIMPLE IRA. Individual taxpayers are allowed to contribute 100% of compensation (Self-employment income for Sole proprietors and partners) up to a specified maximum dollar amount to their Traditional IRA. to a Roth IRA Roth IRA An individual retirement plan that bears many similarities to the Traditional IRA. Contributions are never deductible, and qualified distributions are tax-free. A qualified distribution is one that is taken at least five years after the taxpayer established his/her first , which will switch you from tax-deferred to tax-free savings. You'll pay less in taxes over the life of the investment. 
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