Save & Invest • 储蓄与投资

The good news is, odds are, you’ll probably live longer than past generations. The bad news is, living longer means you’ll need more money for retirement – possibly up to 30 years’ worth. Whatever your retirement dream is – whether it’s traveling the world, playing golf or just relaxing and enjoying the grandkids – the last thing you want to worry about is outliving your money.

A good rule of thumb is to save enough money to make sure you live the way you've always lived. You can’t expect to spend less on living expenses in your Golden Years than you do today. Most financial advisors agree that you'll need 70-80 percent or more of your pre-retirement income to maintain your lifestyle in retirement.

Also keep in mind that the cost of retirement living continues to increase as the cost of healthcare, housing, energy and other costs increase. And don't underestimate the power of inflation, as even low inflation can damage the purchasing power of your retirement dollars. For example, if you project a 3% inflation rate over the next 25 years, a gallon of milk purchased today for $4.29 will cost you $8.37 in 2031.

So, while your expenses may at best remain the same, or even increase, you can’t expect the same for your income. That’s why every day that goes by in which you don’t save is another dollar you likely won’t have in retirement.

When you invest, you earn interest on your money. And then that interest earns interest. That’s called compound interest, and it’s how your account grows over time. The sooner you start, the more you can save.

Liz and Jenna, both 24, started work for the same employer on the same day. After a year, when she was eligible to participate in her employer’s plan, Liz began making an annual contribution of $1,000. Jenna chose to wait another 10 years before joining the plan. Liz stops investing after 15 years, while Jenna continues to invest $1,000 a year until she retires at age 65.

Beware of severe "wait" loss 

This illustration assumes a $200 monthly contribution that earns interest at 8%. It does not reflect the performance of any specific investment. The returns are hypothetical and do not reflect the past or future performance of any specific investment option. Payment of income taxes is not reflected. Systematic investing does not ensure a profit or protect against loss. You should consider your ability to invest consistently in up and down-markets.