70
Lecture 10: Saving for Retirement
% :KDW¶V EDG DERXW N V LV KRZ SHRSOH XVH WKHP 7KH ¿UVW
SUREOHPLVWKDWPRVWZRUNHUVGRQ¶WVDYHHQRXJK$PD]LQJO\PDQ\
$PHULFDQ¶VGRQ¶WWDNHDGYDQWDJHRIDQHPSOR\HUPDWFK:LWKD
match, the company will chip in the same amount of money that
\RXSXWLQWRDNXSWRDSHUFHQWDJHRI\RXULQFRPH,W¶VIUHH
PRQH\²QRVWULQJVDWWDFKHG
% ,I\RX¶UHOLNHPRVW$PHULFDQV\RXQHHGWRLQFUHDVHWKHDPRXQW
WKDWJRHVLQWR\RXUN <RXQJRUORZLQFRPHZRUNHUVPLJKW
RQO\ QHHG WR VDYH ¿YH RU VL[ SHUFHQW EXW PRVW PLGGOHDJHG
workers should be saving twice that amount or more once kids
EHFRPHLQGHSHQGHQWDQGKRXVLQJH[SHQVHVIDOO,QJHQHUDO\RXU
FRQWULEXWLRQUDWHVKRXOGULVHRYHUWLPH
% :KHQ\RXGRGHFLGHWRFRQWULEXWHWRDN \RX¶OOQHHGWRFKRRVH
KRZ WR LQYHVW 7KH GHIDXOW LQYHVWPHQW LV JHQHUDOO\ VRPHWKLQJ
NQRZQDVDWDUJHWGDWHIXQG,W¶VFDOOHGWKLVEHFDXVHLWKDVDWDUJHW
UHWLUHPHQWGDWH7KLVW\SHRILQYHVWPHQWLVDGLYHUVL¿HGPL[RI
stocks and bonds, it rebalances automatically when stocks go up or
down in value, and it gradually moves toward a higher percentage
RIERQGVDV\RXJHWROGVR\RX¶UHQRWDVYXOQHUDEOHWRDPDUNHW
FUDVKULJKWEHIRUHUHWLUHPHQW
% &KRRVHWKHORZHVWH[SHQVHUDWLRWDUJHWGDWHIXQG$QGLI\RX¶UHWKH
kind of person who will worry when your portfolio loses money,
FKRRVHDWDUJHWGDWHWKDWLVQ¶WVRIDUDZD\)RUH[DPSOHD
WDUJHWGDWHIXQGZLOOKDYHPRUHERQGVDQGIHZHUVWRFNVWKDQD
WDUJHWGDWHIXQG$VUHWLUHPHQWDSSURDFKHVUHGXFH\RXUSHUFHQWDJH
RIVWRFNVDQGLQFUHDVH\RXUSHUFHQWDJHRIERQGV7DUJHWGDWHIXQGV
PDNH FKRRVLQJ D UHWLUHPHQW SRUWIROLR HDV\ MXVW PDNH VXUH \RX
FKRRVHRQHZLWKWKHORZHVWIHHV