Take Advantage of Your Savings

Have you ever heard the Latin phrase “carpe diem”? Translated, it means “seize the day” or make the most out of life. This philosophy also applies to saving for retirement. Your employer’s retirement savings plan provides you with the opportunity to set aside money for your future in a tax-deferred account.

Take Hold of Your Plan Your employer’s plan provides you with a number of benefits that can help you build up your retirement savings. Your contributions are automatically deducted from your paycheck so you aren’t tempted to spend that money elsewhere. You can choose from a variety of professionally managed investments. And your pretax contributions and account earnings are tax deferred until withdrawal.

Grab an Investment Strategy That Works The returns your investments earn will affect the amount of money you’ll have for your retirement. So select your investments carefully. Your investment strategy should reflect the number of years you will be investing and the level of risk you can handle. Some investment choices present more risk, but also more opportunity for gain, than others. Stocks are volatile, but typically provide a higher potential for growth than less volatile investment types, such as bonds and cash equivalents. You may decide to include stock investments in your portfolio to help achieve your long-term goals. As you get closer to retirement, you may want to shift more of your money into less volatile asset classes to help preserve any gains you have earned over the years.

Boost Your Contribution Level Increasing the amount you contribute to your plan can make a positive difference in the amount of money you’ll have available at retirement. When you first joined your plan, you may have decided to contribute only a small amount. As time goes by, try to increase your contribution each year. It probably won’t be easy to save more when you have so many other demands on your money. A little bit more now, however, could have a significant impact on your retirement lifestyle.

Make the Most of Your Plan …by saving more each year. See how much more you could accumulate in your plan by increasing the amount you contribute each week.

This is a hypothetical example used for illustrative purposes only. It is not representative of any investment vehicle. It assumes an average annual total return of 7%, monthly contributions, and monthly compounding. Contribution amounts are rounded to the nearest dollar. Your investment results will be different.       

The content of this material is for informational purposes only and intends solely to serve as a guide and/or an additional tool in helping you plan for retirement. An investment in a retirement plan is not a bank deposit or a savings account; is not an obligation of, nor guaranteed by Banco Popular de Puerto Rico or its subsidiaries and/or affiliates; is not insured by the FDIC or any other government agency; and may lose all or part of its value. Banco Popular de Puerto Rico and/or its subsidiaries and affiliates are not engaged in rendering legal, accounting or tax advice. If legal, accounting, or tax assistance is required, the services of a competent professional should be sought. Consult your accountant, attorney or tax advisor before investing.  

Source: DST