Family finance

Retirement Fund: How to create a family retirement fund

Retirement fund for your familyretirement fund

Should you bother about creating family retirement fund when there are so many demands for your hard earned money? Or you may have a great family now.

Well as much as we hate it, we will grow old. It’s a natural fact of life. When you grow old you will not be able to generate income in the same way that you do right now. You will not be physically able to work, your mentally capacity may be impaired and many companies will see you as a liability.

You need some way to have an income to support you without having to work for it. This is where family retirement fund comes in.

In some countries you will automatically get a pension. Some companies also give a pension. If you have none of these you may have to rely on friend and families or your retirement fund. If you do have an pension it may not be able to totally support you, so you may need some way to supplement it – plan for your retirement from now. Start your family retirement investment fund.

This is why you should start a retirement investment fund.

Dave Ramsey recommends that you start doing this after you finish paying off your debts and have built a family emergency fund of 3-6 times the amount you spend on family expenses for a month. That is 3-6 times the amount of money you spend each month should be in your emergency fund to be used only in emergency situations.

He then recommends that you start to save 15% of your income in your family investment fund. How should you invest this money?

Invest your money in growth stock – mutual funds with a long track history.

He says you should invest in 4 different areas

  1. Growth and income – 25% of the investment fund
  2. Aggressive growth – 25%
  3. International growth – 25%
  4. Regular growth – 25%

“In the house of the wise are stores of choice food and oil” Proverbs

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