Start Investing for Retirement
More and more people see retirement as both a challenge and an opportunity. The
challenge is to maintain the lifestyle to which you've grown accustomed. The opportunity
is to enjoy life to its fullest, travel to places you've only dreamed of before, and
indulge in the little luxuries you've earned after a lifetime of hard work.
To help ensure a comfortable lifestyle during retirement, it is absolutely necessary
to establish and maintain an investment plan that will help bridge the gap between the
income needed to retire comfortably and the income Social Security and pensions provide.
You need to save and invest enough to stay on track with your retirement income needs. These simple strategies below can help you get started.
Investing for retirement is a great idea. But you have several opportunities to take
advantage of an even greater idea: investing for retirement with tax advantages. For
example, you can enjoy tax-deferred investing (you pay no federal taxes on your earnings
until withdrawal) through IRAs and company-sponsored retirement plans. A Traditional IRA
combines the possibility of a tax deduction for contributions (depending on your income
level) with deferral of taxes on deductible contributions and earnings until withdrawal.
With a Roth IRA, your contributions are not tax deductible but you have the opportunity
for tax-free withdrawals. These tax advantages can add up over time.
When you invest regularly and reinvest your earnings, you are taking advantage of compounding-one
of the most simple, yet powerful, strategies in the financial industry. When you compound, you continue
to earn money on your earnings. All you need is the discipline to invest regularly every month and the
patience to pursue growth over time. You can never make up for lost time, so start investing as early
as you can in mutual funds that fit your investment goals, risk tolerance, and time horizon.
 |
 |
| |
Return at 8% |
Return at 10% |
| (at age 65) |
Principal Value |
Total Value |
Pricipal Value |
Total Value |
| Begin at age 25 |
$96,200 |
$711,268 |
$96,200 |
$1,119,122 |
| Begin at age 35 |
$72,200 |
$302,716 |
$72,200 |
$416,059 |
| Begin at age 55 |
$24,200 |
$37,116 |
$24,200 |
$40,492 |
|
|
|
|
Compounding is a simple strategy that can help magnify results by reinvesting investment earnings. Just look
at how an initial one-time investment of $10,000 can grow to $46,661 in 20 years through compounding.
Asset allocation is the time-tested process of spreading investments across a mix of “asset classes,”
or financial markets-such as stocks, bonds and money market securities–that reflects your unique
situation and goals.
Studies have shown that asset allocation has been by far the most critical factor in
investment performance. These studies indicate that more than 90% of investment returns
result from how assets are allocated among different financial markets. Only 4.6% of
investment performance has come from selecting the right individual securities.*
Making the right decision about how to allocate your assets can help your portfolio
pursue a competitive rate of return consistent with your acceptable level of risk.
If you’re interested in a one-decision approach to asset allocation, the MTB Managed Allocation
Portfolios give you access to a conservative, moderate or aggressive investment mix.
Many people rely on the help of an experienced financial adviser to clarify their goals and
develop an appropriate asset allocation strategy.
