Im 20 years old......best way to invest for retirement?

Im 20 years old, saving about $600 a month. I want to have a million dollars when I retire. Preferably more, because inflation. Anyways, whats the best way to invest for retirement? IRA? Mutual Funds? Stocks? Please be as detailed as possible. Thanks guys!

Good for you! Most 20yos are only interested in having fun NOW. I wish I had done that when I was 20 - where I could be now...

Anyway-first and foremost - make sure you have at LEAST three months' (six months, if you are the sole breadwinner for your family) EXPENSES (not salary) in a savings account or low-risk investment for emergencies. Medical emergencies are the number one reason people end up in bankruptcy - don't be a statistic.

Second (after the emergency fund) - if you have ANY debt (except a house), pay off the debt before investing. If you earn 12% on your investment but pay 15% on your debt, you're really losing money (3%) every month. Even if you only pay 8% (say, a car payment), your REAL return each month is only 4%. You're better off getting rid of the anchor (debt) and sailing on the rising tide of higher returns.

Now, for the investments - start by maxing out your company's 401(k) or 403(b) (non-profit), if the company offers one. Most employers offer a "match" of some sort, which is truly free money. I believe max contributions for 2007 (for someone your age) are $15,500.

That alone should take care of the $600/month, but if your company doesn't offer a retirement "fund", open a Roth IRA in an index fund. An index fund tries to replicate the market that it's based on (NYSE, S&P500, NASDAQ), which have historically earned 10% or better for EVERY ten year period. Just remember, you can only contribute a max of $5000 this year (which is just over $400 per month).

After that, you'll need to look into other tax-free and/or tax-deferred options. There are a number of them, so you'd do better paying to talk to a professional who will make suggestions based on your individual circumstances and plans (buying a home, etc.).

Depends on the amount of risk you are willing to take. I have my money in Mutual funds, 401K and Stocks. I have stocks like IBM, Coke, Oracle, Microsoft, etc. Coke is a very stable stock and pays dividends. I roll those right back into the stock.

try going to different financial banks. they can help you invest as much as you want.

First, does the company you work for have a 401K or company match type program? You want to be absolutely sure that you utilize it if its available, or you're wasting an opportunity. A lot of companies match your contributions up to, sayk, 5% of your pay-- so you could DOUBLE what you are investing if you take advantage.

If they have this option, utilize the highest match you can and invest that route.

If not, an IRA grows tax free, which is really a big savings, so look into that.

At $600 flat a month, and a 6% yield, it would take you 37 years to get 1MIL. That puts you at only 57. Plus, I'm sure as you make more you'll invest more.

Starting early pays off!!

You should do a Roth IRA with as much as you can afford per month and I would recommend in mutual funds. Just call Smith Barney or any other similiar company, get a guy, and start. The Roth IRA is tax free when you take it out when you're geezin so it's the best deal around. If the company you work for offers matching funds in some form of 401 K then you should probably split it up and do half with that and half Roth IRA, because you can't beat free money with anything. If you start at 20 you should easily have 1 million, you will probably end up with 3 million.

Look up "The Rule of 72" to learn how much you have to invest in order to retire with the amount you want. The website www.choosetosave.org can also be very helpful. Personally, I'd put the first $4,000 a year into an IRA, diversified ultimately into about 10-12 stocks, and then set aside the rest in a regular stock account that you keep for retirement. The advantage to the Roth is that you can withdraw the money you put in after five years and keep the interest working for you. You're so young right now, you don't need bonds, but you should eventually get into real estate, as the tax deductions are terrific and you need to live somewhere anyway. Mutual funds are okay if you don't want to pay attention, but I prefer stocks if you're willing to learn about them. Also, a million may not go far in 45 years, so you'll want to adjust your expectations based on inflation. You're doing great so far: congratulations for getting on top of this early. Someone who starts at age 35 with the same amount each month will never catch up to you, even if you quit when they start.

Learning to save correctly is just as important as learning to invest.

Try putting back a small amount of the $600.00 every week or month for savings only. This will add up in time.

Next look into foreclosure properties, and other real estate investments.

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Bank Stock, Bank Stock and more Bank Stock! You would be amazed at how fast you could accumulate some serious money here!