Let Uncle Sam help you Save for Retirement!

Looks like GW wants to leave all of us with a going away present! That's right, depending upon your tax filing status, you will be receiving $300 to $1200 in mid 2008 courtesy of the wankers in Washington DC.

The debate upon the recently approved Stimulus Package will likely last for the majority of 2008, but the real question lingering upon economist's minds is still up in the air...

What will America do with it?

Love us or hate us, there is nothing like free money to get Americans out of a spending slump like "free money"! Some will argue with my phrase "free money", but that is essentially what it is, because it is money that you have previously spent (i.e. the government took) and now managed to have it reappear in your mailbox.

So what will you do with your Stimulus Package check? The smart money would be to invest it in yourself! Here are a few ways to do this, and do it wisely:

Invest tax free
Contribute your refund to your Individual Retirement Account (IRA). Depending upon your needs, a Traditional vs. Roth IRA is the best way to invest money you have in the bank. IRAs offer you the ability to gain capital without paying a penny in taxes, so use this to your advantage. Only problem, you must wait untilretirement age to tap into these funds.

Invest in the stock market.
Open a brokerage account and invest in your favorite companies or mutual fund(s). Depending upon your investment knowledge, you can setup your own portfolio or use a mutual fund manager to do this for you. My personal favorite manager is KenHeebner at the CGM Focus Fund, who returned ~80% profits to his investors in 2007. Can you say Cha-Ching?

Invest in fixed income.
Nothing beats fixed returns in an uncertain market! If you are the skittish type, toss your refund into a high yield savings account. Five percent is better than losing the whole thing right? The only problem is that low yield returns means you must save much more of your paycheck to fund yourretirement, so weigh your investment choices wisely.

If any questions arise, please leave a comment and I will point you in the right direction.