I'm 29 and am waking up to the need to start saving for retirement (no dogpiling please, I can't go back and change that, but I can take steps in the right direction now).
Better late than never and you're still ahead of many.
For the IRA (probably a Roth), I'm looking at a choice between a brokerage like ShareBuilder and investing in a mix of index ETFs versus opening an account with Vanguard and putting all my money into their Year 2050 Target Retirement Fund. I'm not sure what would be the better choice. This fund does have pretty low expenses, which is a plus. I looked at Fidelity's 2050 fund as well, but it has significantly higher expenses.
IMO, Sharebuilder is not a great option. Here's a post I wrote on the topic: http://www.personalfinance101.org/Articles/2007/03/why-i-hate-sharebuilder.html
. What it comes down to is that for the small amount of money you are going to be contributing, even with the small fees, sharebuilder will still significantly eat into your investment. If you MUST do sharebuilder, only do one ETF. Personally, until you get to the point where you can make larger transactions I'd stick with the fund. Also, Fidelity's expenses tend to be higher in general and on that fund they're much higher because Vanguard takes the average of the expenses in the underlying fund and Fidelity adds them together somehow.
One other question. When I open the Roth, should I go ahead and max out my 2007 contribution, or would it be better to only put in $2k or $3k to start and dollar-cost-average my way in over the rest of the year?
If you have the money, put it in now. And start saving for 2008. There's significant research to show that DCAing doesn't do much to help performance so it's better to just get it in there and working for you ASAP.
Since I need to play some catch-up ball here, I plan to be putting approximately 18% of my pre-tax income into my 401(k) and Roth. For a while, I'm also going to throw some extra cash into a high-yield savings account to build up an emergency fund. My goal is to get about six months worth of living expenses in there, plus I'll use it to save for other things.
Any thoughts? The company is bringing in a financial planner this week that we can talk to, but I always like to get a variety of opinions.
Sounds like you have a good plan. Don't sign anything with the planner that your company is bringing in. American Funds are ok, but they are loaded funds and if you buy them outside of your 401k they're going to be really expensive. Not to mention the premium that the FP will charge you. Talk to the guy, pump him for info but don't sign up for anything.