| |
|
Retirement |
|
Planning for Retirement
|
Retirement may seem far away, but early planning is crucial. It's true that some of your expenses may decrease when you retire, but others, like health care, travel, and leisure activities, may rise. And with life expectancies increasing and the power of inflation, you want to make sure you don't outlive your assets.
According to the 2007 Retirement Confidence Survey, retirees said that only 40% of their income came from Social Security. A traditional employer-provided pension accounted for 21% and personal savings for 24%.1 With the future of Social Security in jeopardy, it's extremely important to save and invest on your own. The earlier you start, the more money you can accumulate and the greater chance you'll have of reaching your goals.
By starting early and saving moderate,
even small amounts each year, you'll be better prepared to live
comfortably in retirement.
If you wait, you'll have to save much higher amounts each year in order to save the same amount and you run a greater risk of not having enough money to retire at the age you'd like. It's never too late, though. Even if retirement is in your near future, you can still take steps now to save and invest.
| The Power of Starting Early |
|
|
| This chart is for illustrative
purposes only and assumes a $3,000 contribution made each year
and an 8% annual compounded return (with dividends reinvested).
Returns do not reflect fees and expenses of acutal investments. Actual returns will vary
and may be greater or less than any assumed rate. There can
be no guarantee that any particular return will be achieved. Regular investing does not guarantee a profit or protect against loss in declining markets.
Withdrawals and distributions from a Traditional IRA (other
than nondeductible contributions) will generally be subject
to taxation at then current federal and state income tax rates,
which will reduce accumulated amounts. Withdrawals made from
a Traditional IRA prior to age 59½ may be subject
to an additional 10% penalty tax if not made for qualified purposes and to a 20% withholding.
Withdrawals from a Roth IRA may also be subject to an additional penalty. Please see the IRA section for more details. |
Learn more about the various retirement planning vehicles available to help you work toward your
financial goals.
1 Source: 2007 Retirement Confidence Survey, Employee Benefit Research Institute.
|
