And the sooner you start, the better off you'll be. This worksheet simplifies several retirement planning issues such as projected Social Security benefits and earnings assumptions on savings. You may want to consider doing further analysis, either by yourself using a more detailed worksheet or computer software or with the assistance of a financial professional. Access to your money in a savings account is easy. One disadvantage is that, over the long term, the interest paid on a savings account usually doesn't keep up with inflation.
CDs usually pay a higher interest rate.
They require a larger initial investment, however, and money must be kept in the account for a specified period, usually six months or longer. Money market mutual funds These mutual funds invest in money market instruments such as treasury bills, bank certificates of deposit and commercial paper. The interest rate may vary as the economy changes. Private corporations or financial institutions manage the funds and charge a small annual fee for their services. Often you can make relatively small deposits in money market mutual funds.