- When Should I Save?
Most people have good intentions about saving for retirement. But few know when they should start and how much they should save.
Sometimes it might seem that the because of the commercial industry and low expenses of today, it seems difficult to start saving for the
future. It’s easy to think that you will begin to save for retirement when you reach a more comfortable income level, but the longer you put
if off, the harder it will be to accumulate the amount you need for a future purchase, emergencies or retirement.
The rewards of starting to save early for retirement are far more important than the cost of waiting. By setting aside small amounts each
month, you may be able to accumulate a great deal over the long term. One method is to put aside a exact dollar amount or percentage
of your salary every month and to pay yourself as though saving for retirement were a mandatory cost.
Example of the cost of waiting. Two friends, Rick and Mary, want to start saving for retirement. Rick starts saving $275 a month right
away and continues to do so for 10 years, after which he stops but lets his funds continue to accumulate. Mary waits 10 years before
starting to save, then starts saving the same amount on a monthly basis. Both their accounts earn a consistent 8% rate of return. After 20
years, each would have contributed a total of $33,000 for retirement. However, Mary, who delayed, would have accumulated a total of
$50,646, less than half of what Rick, the early starter, would have accumulated ($112,415).*
This example makes a strong case for an early start so that you can take advantage of the power of compounding. Your contributions
have the potential to earn interest, and so does your reinvested interest. This is a good example of letting your money work for you.
If you have trouble saving money on a regular basis, you might try savings strategies that take money directly from your paycheck on a
pre-tax or after-tax basis, such as employer-sponsored retirement plans and other direct-payroll deductions.
Regardless of the method you choose, it is extremely important to start saving now, rather than later. Even small amounts can help you
greatly in the future. You could also try to increase your contribution level by 1% or more each year as your salary grows.
Distributions from tax-deferred retirement plans, such as 401(k) plans and traditional IRAs, are taxed as ordinary income and may be
subject to an additional 10% federal income tax penalty if withdrawn prior to age 59½.
*This hypothetical example of mathematical compounding is used for illustrative purposes only and does not represent the performance
of any specific investment. Rates of return will vary over time, particularly for long-term investments. Investments offering the potential for
higher rates of return involve a higher degree of investment risk. Taxes, inflation, and fees were not considered. Actual results will vary.
 | |  | |  | |  | |  | |  |
Note: The information provided here is to assist you in financial planning and understanding types of life insurance. The
information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any
federal tax penalties. You are encouraged to seek tax or legal advice from a professional and licensed tax or legal advisor.
As with most financial decisions, there are associated expenses with the purchase of life insurance. Policies commonly have
contract limitations, fees, and charges, which can include mortality and expense charges. Most have surrender charges that
are assessed during the early years of the contract if the contract owner surrenders the policy; plus, there could be income
tax implications. Any guarantees are contingent on the claims-paying ability of the issuing company. Life insurance is not
guaranteed by the FDIC or any other government agency; they are not deposits of, nor are they guaranteed or endorsed
by, any bank or savings association.
information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any
federal tax penalties. You are encouraged to seek tax or legal advice from a professional and licensed tax or legal advisor.
As with most financial decisions, there are associated expenses with the purchase of life insurance. Policies commonly have
contract limitations, fees, and charges, which can include mortality and expense charges. Most have surrender charges that
are assessed during the early years of the contract if the contract owner surrenders the policy; plus, there could be income
tax implications. Any guarantees are contingent on the claims-paying ability of the issuing company. Life insurance is not
guaranteed by the FDIC or any other government agency; they are not deposits of, nor are they guaranteed or endorsed
by, any bank or savings association.
| The Life Insurance Group Affordable Life and Health Insurance |
TheLifeInsuranceGroup.com- All Rights Reserved.
| Life insurance in your state. Look up Alabama (AL), Alaska (AK), Arizona (AZ), Arkansas (AR), California (CA), Colorado (CO), Connecticut (CT), Delaware (DE), Florida (FL), Georgia (GA), Hawaii (HI), Idaho (ID), Illinois (IL), Indiana (IN), Iowa (IA), Kansas (KS), Kentucky (KY), Louisiana (LA), Maine (ME), Maryland (MD), Massachusetts (MA), Michigan (MI), Minnesota (MN), Mississippi (MS), Missouri (MO), Montana (MT), Nebraska (NE), Nevada (NV), New Hampshire (NH), New Jersey (NJ), New Mexico (NM), North Carolina (NC), North Dakota (ND), Ohio (OH), Oklahoma (OK), Oregon (OR), Pennsylvania (PA), Rhode Island (RI), South Carolina (SC), South Dakota (SD), Tennessee (TN), Texas (TX), Utah (UT), Vermont (VT), Virginia (VA), Washington (WA), West Virginia (WV), Wisconsin (WI), Wyoming (WY). Get free rate quotes for life insurance. |
 | |  | |  |
| Your Tools, Tips, and Guide to Affordable Life Insurance |