Start Saving Now

Your savings will be key to your retirement. Start now to harness the power of time.

Point: If I don’t save for retirement myself, I can always live off Social Security.
Counterpoint: Social Security benefits may be less than you anticipate.

Keep in mind that Social Security was designed to be a supplemental source of income. In fact, it replaces only about 42% of an average worker’s income after retiring.† Providing the rest is up to you. To estimate how much you’ll have in retirement income including Social Security payments, use the Retirement Planning Calculator at americanfundsretirement.com. You can also see how changes in your savings plan might affect your income.

Wondering where to begin?

Taking the first step toward retirement has never been more important. Contributing to your employer’s retirement plan is an easy way to start.

When it comes to saving for retirement, time can be one of your greatest allies. The sooner you begin, the longer your investments have to work for you.
Getting started sometimes involves jumping over some mental hurdles. Let’s take a look at a few:

Point: Getting started in a retirement plan sounds like a difficult and complex process.
Counterpoint: Actually, it’s never been easier to begin.

You can enroll in your retirement plan in just two steps. Simply designate an amount to be automatically withheld from your paycheck, and select from the plan’s investment options. That’s it!

Point: I can’t afford to save for retirement — at least, not enough to make a difference.
Counterpoint: Contributing to your employer’s retirement plan is one way to save for retirement. Even small amounts invested regularly can add up.

People often have a tendency to spend what they make and not know where their money goes. You may have received a pay raise, only to increase your spending by the same amount soon afterward. If you look closely at your monthly spending habits, you can determine what level of contributions makes sense for you.

Point: I’m thinking of putting off my retirement saving for now, but I’ll catch up later.
Counterpoint: Waiting to begin saving could cost you.

Small amounts can add up over time

Monthly contributions of $100, $200, and $300 over 40 years can lead to monthly withdrawals at retirement worth $1,171, $2,343, and $3,514.

The earlier you start, the better

Saving $200/month for 40 years = $2,343/month in retirement withdrawals
Saving $400/month for 30 years = $2,000/month in retirement withdrawals.
Start now: more time in the market gives your savings longer to compound.
Catch up later: by waiting just 10 years to start, even twice the monthly contribution is not enough to catch up.

The most important decision you can make about saving for retirement is just that — to save!

To learn more about personalized retirement saving options, schedule an appointment with one of our financial professionals.

† Source: Social Security Administration, Actuarial Note, June 2022.