Keep Investing Simple

Building your best retirement can be simpler than you think. In fact, there are straightforward ways to streamline your planning that can help reduce stress and grow your retirement savings. Start with these moves for more effective retirement planning:

Make Your Savings Automatic

Saving through a workplace retirement account, such as a 457(b), 403(b), or 401(a) plan, allows you to contribute directly from your paycheck, before you have a chance to spend the money. It can also lower your tax bill for that year. You don’t pay taxes on the money you contributed that year. Instead, you pay taxes when you begin withdrawing the money as a retiree. For 2026, you can contribute as much as $24,500. It jumps to $32,500 if you’re age 50 or over, and $35,750 if you’re ages 60 to 63. If eligible, you may be able to use the preretirement catch-up and contribute double the normal amount for a total of $49,000. If these numbers seem unrealistic, start by saving enough to get your full employer match, if offered through the plan. Eventually, try to work up to saving 10% to 15% of your salary each year.

Simplify Your Savings Every Year

Many employers offer an automatic increase feature so that your savings rate increases by 1% or more every year on the same date. Or you can choose to save a specific dollar amount, say $25 every paycheck, and boost your contribution by that amount once a year, perhaps on your work anniversary date or during the open enrollment period when you are making other benefits-related choices. The idea is to make it easier to save more. You may not notice the 1% or $25 contribution from your paycheck, but through the years, the annual increase in savings can help grow your account significantly, adding to your retirement nest egg. For instance, imagine an employee who contributes $100 to their 457(b) plan every two weeks starting at age 30. If they make it a habit each year to increase their contributions by $25 per paycheck, it could increase the value of their account by more than $300,000 by the time they reach age 65, assuming investments return 5% a year.^¹ Calculate how small increases can grow over time.

Consider Target-Date Funds²

Another way to simplify your investment strategy is to invest in a target-date fund. These funds are built with your future retirement date in mind and become more conservative as the retirement date nears. They also help reduce risk by spreading your money across different types of investments. These funds are not risk-free; however, they generally include a mix of investments primarily in stocks and bonds chosen based on your distance to retirement.

Understanding Target-Date Funds

These funds are designed to help lower your exposure to risk the closer you get to retirement.

Simplify Your Bill Payments

Help keep your finances in order by setting up autopay for your recurring bills. This helps ensure that your bills are paid on time, which can have a positive impact on your credit score and help you avoid unnecessary late fees. Americans spend more than $14 billion a year on late fees.^³ Automating bill payments can help you avoid those costs, reducing stress and allowing you to keep your focus on boosting your long-term financial future.

Disclosures

^{¹ This illustration regarding compounding or the likelihood of various investment outcomes is hypothetical, does not reflect actual investment results, and does not guarantee future results. Results may vary with use and over time, reflecting any changed circumstances, assumptions, or variables upon which the information is based. Projections involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially and substantially from any future results or performance expressed or implied by the projections for any reason. Projections do not guarantee that a particular result will be produced or achieved. The projections do not represent actual securities or client performance and cannot determine which securities to buy or sell or if your investment strategy is appropriate.}

^{² The Fund is not a complete solution for all of your retirement savings needs. An investment in the Fund includes the risk of loss, including near, at, or after the target date of the Fund. There also is no guarantee that the Fund will provide adequate income at and through an investor’s retirement.}

^{³ “CFPB Bans Excessive Credit Card Late Fees, Lowers Typical Fee From $32 to $8,” Consumer Financial Protection Bureau, March 5, 2024.}

^{* Fee-based financial planning services are offered through MissionSquare. Please read all disclosure documents carefully prior to initiating any plan.​}

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