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Living with credit

Roundup: Ready for retirement?

Emily Crone

There’s no denying it: We’re living in scary times. The unemployment rate keeps climbing, major automakers are going bankrupt and many Americans are putting retirement plans on hold. Recent college graduates are shaking in their boots as they search for jobs that just aren’t there (sorry guys, this is a pretty crummy time to be entering the real world).

Ready for retirement?

Despite all the gloom and doom, a recent article on CNN Money suggests that it is still possible to retire rich. For those in their 50s and beyond, yes, you will likely need to work longer. But you can take advantage of tax codes that allow you to contribute more to your retirement accounts than your younger counterparts. You can also take advantage of the fact that right now, homes, cars and travel are cheaper than they have been in a long time. Now is also a good time to consider refinancing your debt.

While you likely will need to delay your retirement by a few years, the CNN article reminds readers that longevity in America has increased greatly over time, and being retired for 20 or 30 years isn’t as peachy as it sounds. It’s expensive, and studies have found that the majority of retirees feel depressed, unproductive and less connected to the world. Those who are happiest are working in some capacity. If you’re perfectly competent and healthy at age 60, why not work a few more years and save more money?

The article also says that those of us who are younger actually may be in luck with the economic downtown. With stock prices so low, it is a wonderful time to invest. Once the economy recovers and share prices rise, we will be glad we did. And the more we save, the younger, the better, due to the magic of compounding interest (the article cites this stat: “someone who invests $400 a month from age 25 through 34, and then doesn’t save another penny, will end up with more money than someone who invests the same amount monthly from age 35 through 65.”

I have been hearing this “if you snooze, you lose” sentiment a lot lately, so I recently bumped up my 401(k) contribution from 6 percent to 10 percent. I’m only 24 and that eats up a pretty decent chunk out of my measly income, but I am determined to live a comfortable life when I’m older, and I know that cutting corners now will absolutely pay off later. I don’t want to be a Wal-Mart greeter when I’m 70.

If you’re in debt, remember that the sooner you can pay it off, the sooner you can begin investing in your retirement. Or you can contribute to paying down debt and put money toward retirement at the same time, and just pay off the debt more slowly. Just remember that the time to start considering retirement is NOW, regardless of whether you are 24 or 54.

Before I leave you to contemplate your retirement plan, here are some of the best credit card and debt-related posts in the personal finance blogosphere from this week:

1)    The Digerati Life outlines a six-step plan for improving your credit score.

2)   Gen X Finance explains how to do a midyear financial checkup and provides readers with a list of different aspects of personal finance to think about, such as beginning to save for Christmas when it’s still warm out.

3)    Frugal Dad advises a reader on the ideal order in which to pay back her various debts.

4)    My Dollar Plan provides 10 personal finance tips for recent college graduates. One biggie? Be wise with credit cards!

5)    Bargaineering discusses how the Fair Debt Collection Practices Act protects debtors.

6)    The Simple Dollar shares insights he learned from an article about savings practices in foreign countries and explains how you can use these unique ideas to think about credit cards and savings in a new light.

7)    MSN Smart Spending argues that while there may be a difference between various types of debt, the idea of “good debt” is a myth.

8)    Living Almost Large writes a post in reaction to Smart Spending’s point of view, and says there is such a thing as “good debt.”

9)    The Consumerist reminds readers that a crummy credit score can scare off a potential employer.

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