When should you start saving for retirement? As soon as you can. Start saving today and discover the benefits of contributing to your workplace savings plan.
Take your first step. Confidently.
Starting down the path to saving for your retirement may be easier than you think: Begin by enrolling in your 401(k), 403(b), or other available workplace savings plan. That's it. You don't have to be a financial guru. It won't take long at all to set up.
Taking that first step to enroll is important for a number of reasons. The earlier you start saving, the more time your money has to grow. That's called compounding, and it can really help you reach your retirement savings goals. See the illustration on the right.
You'll also gain a sense of achievement and maybe even some momentum to take the next step, whether it's getting back on track after an event in your life has slowed your savings, or creating a plan for living out your dreams in retirement.
No matter where you are in life, know that you can take steps toward retirement confidently with the knowledge and tools you'll find from Fidelity.
What is a 401(k), anyway?
Simply put, a 401(k) is a type of retirement plan offered through your workplace. If your employer offers a 401(k) plan it makes a lot of sense to participate in it as soon as possible. Here are a few reasons why:
- Beyond providing a way to invest for retirement, 401(k)s may offer huge tax advantages. For example, in some plans your contribution comes out of your paycheck before income taxes are deducted, which means your tax bill will be lower. You could also save on taxes when you withdraw the money because you may be in a lower tax bracket in retirement.
- Another huge advantage: the chance to get "free" money from your employer in the form of matching contributions.
- Your retirement plan isn't just a generic or glorified savings plan for your day-to-day expenses. It's a long-term personal plan for growing your savings by investing in a mix of mutual funds, stocks, and bonds.