Getting started: There’s no time like the present

When you’re just starting out, you may feel as if saving for retirement is the last thing on your

priority list. After all, you have plenty of time to accumulate the money you’ll need to create

a retirement paycheck once you stop working, right? However, saving now is especially

important, when any contributions you make to a retirement account have time to grow

and compound.

Of course, it isn’t always easy to set aside money for retirement when retirement is decades away and you have other demands on your paycheck, like rent and student loans. The good news is, your retirement plan makes it easy to use your paycheck today to fund your retirement paycheck in the future. Here’s how to get started.

• Put your saving on autopilot. When you contribute to your retirement plan, contributions

are automatically deducted from your paycheck before you have the chance to spend the

money first. And, if your plan has an auto-escalation feature, your contribution amount will

grow without you having to remember to take action.

• Say yes to the match. Your plan may provide money toward your retirement. Be sure you

understand what this contribution is and how to maximize the benefit. For example, let’s

say your plan matches 50 cents on the dollar for up to 6 percent of your salary and you

earn $35,000 a year. If you contribute enough to qualify for the full match ($2,100 per

year), your retirement savings would get a boost of $1,050 from the plan, bringing your

total contribution to $3,150. Start at age 25 and you’d have more than half a million dollars

($525,380) by age 65, assuming your account earns an average annual return of 6 percent.

• Don’t let stock market volatility dictate your investment strategy. Recent market ups

and downs have been unsettling, but don’t let that keep you on the sideline. Remember,

markets fluctuate. Your investments are for the long term and your investment strategy

should reflect that. Our Asset Allocation Planner can help you see if your mix of

investments is right for your age, feelings about risk and personal investment style.

So how much should you sock away? Many advisors say that workers should contribute 10

percent to 15 percent of their income to their retirement plan. The more you save today, the

easier it may be to create a retirement paycheck to support your lifestyle come retirement.

You work hard to earn the income that pays your everyday living expenses. Have you given any thought to how you

will pay these expenses in retirement? Where will your retirement paycheck come from? You may not realize that the

money you contribute to your retirement plan today will provide the retirement paycheck you’ll need when you retire.

As you’ll learn in this issue of Educated Investor, retirement income planning is as critical to your future as growing your

savings. That’s why we’ve provided specific tools and tips to help you understand how to determine your income needs

in retirement and map out a strategy for turning your savings into a retirement paycheck.

Educated

Wherever you are. Wherever you are going.