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Saving for Retirement

When Should I Start?

The Power of Saving Early

Every dollar you put away will help increase your retirement security and compound just the same. But money saved actively at a younger age could be worth more than money saved later in life because it will have a chance to compound for much longer.

What Difference Can a Regular Contribution Make?

If you saved just $100 per month for 20 years, you will have deposited $24,000, or $1,200 per year.  With a 6% return on your investment, your account will grow to $46,000, an increase of $22,000 beyond your contributions.


How Can I Save More?

Having Trouble Finding Money to Save for Retirement?

Saving for retirement isn’t always easy. Saving for Retirement offers tips, tactics, tools – and lots of encouragement as you take steps to increase your savings for retirement. We’ll show you how easy it can be to invest your savings and increase your retirement security.

These Strategies Can Help.

Sometimes, money you can save for retirement is right there in front of you — it’s just hard to see. Here are three great ways to contribute more to your Episcopal Church retirement savings plan.

Save Your Tax Refund.

If Uncle Sam pays you back this year, use that tax refund to buy yourself a more comfortable future.

How it adds up:

The average tax refund in America is $2,900.* Saving that much for one year will yield $9,627 in retirement savings after 20 years. Even saving just half adds up to $4,814.**

*2012 End-of-Year Filing Season Statistics, www.irs.gov

** Tax Refund: This hypothetical example assumes an individual contributes $2,900 to a tax-deferred retirement account earning a 6% annual rate of return compounded over 20 years.

This example assumes early withdrawals are not made. Your own investment returns may be greater or less than this example and income taxes will be due when you withdraw amounts from your account. Investing in this manner does not ensure a profit or guarantee against loss in declining markets.

Save Half of Your Pay Increase.

You’ve managed all year without that money. Saving it now instead of spending it can help you manage a lot better in retirement.

How it adds up:

Say you’ve been earning $40,000 a year and you receive a 2% increase. Saving half of that increase ($400 a year) in your retirement savings plan comes to only $5.77 a week out-of-pocket.† But over 20 years, it adds up to $15,597 in retirement savings.*

† Assumes a combined 25% federal, state and FICA tax rate.

* This hypothetical example assumes an individual contributes 1% of their annual salary over a 20 year period to a tax-deferred retirement account earning a 6% annual rate of return compounded over 20 years.

This example assumes early withdrawals are not made. Your own investment returns may be greater or less than this example and income taxes will be due when you withdraw amounts from your account. Investing in this manner does not ensure a profit or guarantee against loss in declining markets.

Make Small Changes in Your Spending Habits.

An expensive coffee, a magazine… buying lunch instead of brown-bagging it… Over time, the cost of these small items can add up to many thousands of dollars you could have for retirement, instead.

How it adds up:

Say you spent $9 for lunch today. Spend that every week over a 20-year career and it would add up to $9,360. Put that money away for retirement instead, and it could be worth $17,766.* So give yourself an extra helping of retirement security.

* This hypothetical example assumes an individual contributes $9 each week for 20 years to a tax-deferred retirement account earning a 6% annual rate of return compounded over 20 years.

This example assumes early withdrawals are not made. Your own investment returns may be greater or less than this example and income taxes will be due when you withdraw amounts from your account. Investing in this manner does not ensure a profit or guarantee against loss in declining markets.


The Power of Compound Interest

Ever Hear of Compound Interest?

It's the financial term for how interest accumulates. Whether you know it for not, at some point you've benefited from it

Here's How It Works

You save money and start to earn interest. Then, you're not only earning interest on your initial savings, but on that interest as well. Evey year thereafter, you're earning interest on a greater amount of money, and consequentially, earning a greater amount of interest.

Here's a Simple Example

If you invest $5,000 and earn 6% interest, after a year you'll have $5,300. That second year, you're no longer earning interest on $5,000, but $5,300. See how much you would have after ten years. Here's a hint. It's a lot!


To Learn More

Call for information about these strategies or to get answers to your questions about saving. Our licensed life and retirement specialists Kevin, Grace, Anna or Larry are available at (888) 735-7114, Monday – Friday, 8:30AM – 8:00PM ET (excluding holidays).

Request a phone discussion

You can also access your account now by visiting www.cpg.org/myaccount.

 

This material is for informational purposes only and is not intended as investment, tax, financial, legal or other advice. Your personal decisions should be based on the recommendations of your own professional advisors. Pursuant to Circular 230 promulgated by the Internal Revenue Service, if this information contains advice concerning any federal or state tax issues or submissions, please be advised that the advice was not intended or written to be used, and that it cannot be used, for the purpose of avoiding federal or state tax penalties unless otherwise expressly indicated.

Unless otherwise noted, websites referenced herein that are outside the www.cpg.org domain are not associated with The Church Pension Fund and its affiliates (collectively, the Church Pension Group) and the Church Pension Group is not responsible for the content of any such websites.

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