We watch our money come and go, but when we can, we should try to put aside some of those dollars for our retirement.
What is the best vehicle to "grow" that money? "If we had unlimited amount of funds, we probably should invest in both a 401k and an IRA. But if we have a limited amount of funds like most of us do, and they're both retirement vehicles so definitely you should invest in one or both," said Diane Chong, of Central Pacific Bank. Chong says not all companies offer 401k's and even if they do, you may have limited investment options. "Well, first of all, if you work for a company that offers a 401k, consider yourself fortunate because in these times, not everybody offers an employer sponsored retirement plan. Then, if they offer a match, that's an additional bonus."
If your company does not offer a 401k plan, it's probably a good idea to look into an individual retirement account - or IRA. "There's several types of IRA's. You have a traditional IRA, you have a Roth IRA, you have SEP IRA'S for those that are self-employed. So with an IRA you actually have much more control. And the investment options are pretty much unlimited," Chong said. And unlimited is a positive word in the world of investment, you have the choice of stocks or bonds, or cash. Even real estate. Let's suppose you do have a 401k with your company. "And then they decide to roll it over into an IRA. Rather than investing in stocks or bonds, they might choose real property because something they feel comfortable with, especially in Hawaii where the property prices seem to be really going up all the time," Chong adds.
