Quick Guide to Retirement Planning: Growing Your Retirement Savings

Don't let the feeling that you've started too late or fallen behind keep you from saving. Whether it’s increasing your employer-sponsored 401(k) contribution rate or adding an extra thousand each year to your IRA contribution, every little bit will make a difference.

4 tips for jump-starting your retirement savings

  • Immediately put away your windfalls — use those one-time cash infusions like bonuses, tax refunds and inheritances as an opportunity to shore up your retirement account rather than spending them.
  • Automate your savings — just like with your 401(k) contributions, it’s far easier to be a diligent saver when you put investing on auto-pilot. Even an extra $100/month can make a difference.
  • Don’t get too conservative — while you may choose to tilt your retirement portfolio more conservatively the closer retirement looms on the horizon, don’t make the mistake of putting too much of your savings in low return CDs and bonds that may not keep pace with inflation.
  • Save as a team — studies show that married couples tend to have far greater success when both partners seriously commit to boosting their retirement savings.

The power of tax-deferred growth

Because most retirement accounts allow you to invest with pre-tax dollars, your savings have an opportunity for substantially more growth. And since taxes aren’t paid until you begin to withdraw your savings in retirement, you’ll likely be in a lower tax bracket.

The following example compares the growth of a $3,000 annual investment over a 30-year period in a taxable account to the same investment in a tax-deferred account like an IRA or 401(k), assuming an 8% average annual compounded investment return and a 27% marginal tax bracket.

The power of tax-deferred growth

Hypothetical illustration, not representative of the performance of any investment. Investing involves risks, including fluctuating returns and potential loss of principal

Set yourself up for retirement success

Your retirement goals will inevitably shift over time. What you envisioned at age 25 might be a world apart from the retirement you imagine at age 50. So make sure your retirement savings strategy changes as your goals change. Find out how our SummitView financial planning approach online planning solution can help track your progress towards your goals and notify you when changes are required.

How much will you have at retirement?

This calculator will help you quickly estimate how much you’ll have saved when you retire, based on your current assets and annual saving rate.

 

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