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By participating in your plan you:
The power of tax-deferred savingsOver the long term, the difference between investing through a tax-deferred saving’s plan and investing with after-tax dollars is significant. The chart below assumes monthly investments of $100 and an annual return of 8% compounded monthly. The money you invest in a 401k plan goes to work right away, generating earnings that compound tax deferred.
Why Invest in Mutual Funds?A mutual fund pools the money of its shareholders and invests in many stocks, bonds and other securities. Each fund has an investment objective shared by its investors---to provide current income, for example, or long-term growth. Each mutual fund holds many securities and is thus diversified and less likely to respond to the fluctuations of the market as a single stock or bond would. Four investment strategies:Growth Designed to maximize the value of your investment over time, growth funds invest in stocks that have a strong potential for providing above-average growth. Growth and Income Designed to provide both regular income and long-term growth in the value of your investments, growth and income funds invest in stocks, bonds or a combination of both. Income Designed to provide a regular stream of income, income funds invest in interest-paying bonds, stocks that pay regular dividends, or a combination of both. Capital Preservation Designed to maintain a stable price share while providing current income, capital preservation funds include money and market funds. Life-Stage Financial PlanningThe charts below illustrate how investment objectives at four different stages of life might be met using mutual funds.
The Foundation Years 20s-MID 30s
Many years of earning power ahead Plans to buy a home and/or start a family Willing to accept some fluctuations in investment results in the pursuit of long-term financial goals
The Acquisition Years Late 30s-MID 40s
Income still climbing Establishes college fund for children Willing to accept some fluctuations in investment results in the pursuit of long-term financial goals
The Accumulation Years Late 40s-MID 50s
Family responsibilities winding down Begins to think about retirement Seeks less volatility in investment results by emphasizing more income and capital preservation and less long-term growth
The Reaping-the-Rewards Years Late 50s-Retirement
Retired or about to retire Years of earning high income may be over Plan activities during retirement; assesses ability to set up trust funds for grandchildren Seeks lower volatility in investment results
Discover the potential fortune hidden in your salary
Most financial planning experts agree that you will need between 60% to 80% of your pre-retirement income to maintain your present lifestyle when you stop working. Your life circumstances may change, and it’s important to remain flexible within any investment program. With these factors in mind, you should begin to plan for retirement by first determining how much money you will need at retirement.
For example: If you are 40 years old, making $40,000 a year, and plan to retire at age 65, you’ll need over $500,000 at retirement to maintain your current standard of living.
Although this may seem like an unattainable goal today, by investing just $25 a week, you could have $529,447 nest egg set aside when you retire.*
* Calculated at an 8% return. This 8% return is used for illustrative purposes only.
Pay yourself first each month by investing in your plan. Develop a positive investment discipline that helps you cope with other expenses. By investing in mutual funds, you are giving your money the potential to unlock the fortune and plan for the future.
Don’t delay. Start your retirement savings plan today.
Contact a financial advisor in Massachusetts for more Information
Why Use an Investment Advisor?
IRA Accounts and top 10 ways to Beat the Retirement Clock
Premier Client Services
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