A novice here. Desperately needs advice for savings/investing vehicle for retirement.

[jeanettehere]

I'm almost 40 yrs old, & I want to put a aside some extra $ for retirement. I'm a novice when it comes to investing, & could sure use some advice. For my retirement, I presently have
26K in an traditional IRA,
6K in a Roth IRA,
5K in a Universal Life Ins policy (that I'm in the process of canceling), 26K in a SEP IRA (that my employer is not longer contributing to), & 15K in a YMCA Retirement Fund.
78K total.

I max out contributing to my Roth IRA. My SEP/IRA & YMCA Retirem't Funds are employer contribution only. Last year I was talked into the opening the above mentioned "Flexible Premium Universal Life Insurance w/ Indexed Feature." Much to my surprise, at the 1 yr mark of that account, I had 30% less than I contributed due to "expense charges." I'd like to put aside about $500/mth, in a relatively safe savings/investing vehicle. Any guidance would be truly appreciated, & is much needed. Thank you

[jIM_Ohio]

Most advice will center around a percentage of gross income. My advice is save 20% of gross income.

15% of gross income into retirement accounts (401k/IRA) and 5% into a taxable account for mid term purchases (new car, vacations, house repairs).

Once you set up the savings plan ($500/month is 6k per year; if you make 30k per year, that is 20%), you want to allocate it properly.

In the retirement accounts, go for growth. Age 40 now, you will probably retire in 25 years (age 65) and need the money for 50 (money lasts to age 90), so you need growth, growth and more growth. The most common thing to invest in for growth is stocks.

Stocks will generally return 8-12% over 15 year periods. No guarantees on this though.

Invest in many types of stocks:
domestic large cap
domestic mid cap
domestic small cap
foreign large cap
foreign small cap
foreign emerging markets

for example.

Identify percentages of each type (like 80% stocks-20% cash and bonds).

20% domestic large cap
10% domestic mid cap
10% domestic small cap
20% foreign large cap
10% foreign small cap
10% foreign emerging markets

(make up whatever percentages you are comfortable with)
The 5% investment to a taxable account can be the cash and bonds, or you could add a bond fund to a retirement account. There are many types of bonds (government, corporate, domestic, foreign, and real estate are 5 examples). I would probably hold a mix of these bonds as well (come up with percentages).

As you go through this, also think about your tax return, as investing can get you an extra 3-5-10% raise if you invest with intelligence.

[glock35ipsc]

Last year I was talked into the opening the above mentioned "Flexible Premium Universal Life Insurance w/ Indexed Feature."

Hmmm, this wouldn't happen to be through Life Investors or Transamerica IDEX would it?

[jeanettehere]

I'm not even sure what it's called anymore. I thought I signed up under Amerus, the monthly bank withdrawals are under Bankers Life Insurance, & annual report is under Aviva.

I should've known something was fishy when I discovered I wasn't able to view my account online, & had to wait for the annual report to find out my account value.

Thank you Jim Ohio for your response.

[maat55]

I'm not even sure what it's called anymore. I thought I signed up under Amerus, the monthly bank withdrawals are under Bankers Life Insurance, & annual report is under Aviva.

I should've known something was fishy when I discovered I wasn't able to view my account online, & had to wait for the annual report to find out my account value.

Thank you Jim Ohio for your response.

I would cash in that life policy and invest it elsewhere. Replace it with term insurance.