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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
January/February 2020
Contributing Now Matters!
If you don’t contribute to a 401(k), IRA or other qualified retirement plan you could be missing out on a potentially large benefit – compounding. Simply put, compounding is potential earnings on your interest or gains over time. So, the earlier you begin saving, the earlier interest will add up and compound. The same principle applies to retirement plan contributions. The earlier you begin contributing, the more time you give your retirement portfolio to potentially grow. Following are three hypothetical examples that demonstrate how time and compounding work.*
Great Start
Melissa wants to save for retirement early, so she contributes $200 per month to her company 401(k) plan. That’s $2,400 per year, which she keeps up for 10 years — at which point her money has grown to about $32,881. She never contributes another dime to the retirement plan, but after another 30 years, her balance has grown to $198,889.Plan Interrupted
Jake is a Millennial like Melissa and starts off contributing the same amount for five years to build a $13,993 balance. He gets married, has a family and stops retirement plan contributions for the next 30 years. Even so, his balance grows to $84,640. He then restarts contributions for another five years before retiring, when his account will have grown to $128,242.Late Start
Anthony is 57 and, unfortunately, never contributed to a retirement plan. Better late than never, so he begins making $200 per month contributions to his plan. At his retirement age of 67, his balance will only amount to $32,881. If he doubles his contributions, he will still only have $65,762 after 10 years. As these three examples show, compounding works best with time. Even if Anthony quadruples his contribution, he will barely accumulate more than Jake does and much less than Melissa will.The moral of this story? Time matters. Talk to your financial professional to learn more.
*Each example, courtesy of investor.gov, is based on hypothetical earnings of 6% compounded daily. It is not representative of any specific investment strategy or combination of investment strategies. Actual results will vary.
GE-2756113 (10/19) (Exp. 10/21)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
GE-6572038.1 (4/24)(Exp. 4/26)
CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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