How to Start Investing and Saving for Retirement

Article: How to overcome the fear of investing & start saving now

Clark Howard provides a lot of useful advice, especially financial advice. His website is a good place to start when looking for financial information.

If your employer offers a 401k, it's the easiest way to start saving for retirement. When I retired, my employer offered pre-tax savings into a 401k, or post-tax savings into a Roth 401k. They also matched a percentage of my contribution.

When 401k's were first offered, the thought was that you would contribute pre-tax to reduce your taxable income now. Some recommended 15% as a target contribution rate. You might need to start lower, but increase the percentage over time.

Another strategy appears to be contributing post-tax, rolling over your contributions to a Roth IRA once a year, and rolling over your 401k gains to a traditional IRA (these would be your own brokerage accounts.) It's worth noting there are special rules around when you can access your 401k funds. You might be able to access them as early as age 55 if you qualify for retirement, but only if you've left your 401k in your current employer's account. Once you start moving money out to your own brokerage account, you'll need to wait till age 59-1/2 to have penalty free access.