"My budget is tight. Saving for retirement can wait until I'm older, or at least until the market improves."
Courtney
Getting up to speed
Courtney has finished school and started a new career. The new paychecks are great, but expenses and temptations compete for her salary: rent, utilities, student loans, a car payment, clothes and dining out. She is also reluctant to invest now because the markets are so volatile.
Why should Courtney save now for a retirement that is decades away?
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Get on the road early. Starting early means benefiting from compounding. The longer you delay, the more you will need to contribute later in life to build a sustainable nest egg. |
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Compouding into overdrive. Investments typically grow through interest, dividends or capital gains. When reinvested, this compounding "snowball effect" can potentially turn small savings into great sums if left to grow. |
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Automatic transmission. Shifting money directly from your paycheck into a retirement account means regularly contributing to your future. It's deposited for retirement before you're tempted to spend it. |
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Top off the tank. Contribute as much as you can. If your employer offers matching contributions, put in enough to get the full match. The most important factor is to start contributing -- even if it's tiny. Then increase it as you can. |
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Cruise control. A consistent monthly contribution to a retirement plan may help you benefit from fluctuating markets. Known as dollar-cost averaging, you buy fewer shares as stock prices rise and more as they drop. Dollar-cost averaging does not assure a profit and does not protect against market loss. This type of strategy involves continuous investment in securities regardless of fluctuating price levels, so investors should consider their financial ability to continue purchasing through periods of both high and low price levels. |
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Dealer discount. The best time to shop for clothing, or anything may be during a big clearance sale. The same logic applies to stocks and stock mutual funds. After a market drop, stocks become significantly cheaper than they had been a year or two before. That means your dollar buys you more shares when the market is down. |
Recommended maintenance
Online calculators: Click here to use VALIC's array of online calculators to: see if your retirement savings plan is on track; map out a savings goal; see the real cost of procrastination; see the effects of retirement savings on your paycheck and more.
Topical Reports including:
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Cash Flow and Debt Analysis Report |
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Financial Overview Report |
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Retirement Report |
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Education Funding Report |
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Estate Planning Report |
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Life Insurance Report |
The Comprehensive Financial Plan is for working individuals or families who are saving toward one or more financial goals. The plan covers:
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Cash Management/Cash Flow Analysis |
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Retirement Planning |
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Education Planning |
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Risk Management |
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Estate Planning |
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Investment Strategies |