Hoots, Baker & Wiley, P.C.

Certified Public Accountants

 

P.O. Box 7356 Salem, OR 97303

 

Phone: 503-585-1782

Fax:     503-585-1818

 

 

March 2019

Turbo-Charge Retirement Savings

If you aren’t saving enough for the future, the simplest way to increase your retirement plan balance is to increase contributions by 1%. If you’re considering deferring 3% of a $50,000 salary, you would contribute $1,500 annually. Over 20 years at 6% compounded daily, your 3% contribution, which is $125 monthly, would have grown from zero to $57,994.74.


THE 1% DIFFERENCE
Now increase your savings from 3% to 4% of $50,000, about $167 per month. A $42 dollar monthly increase will grow your balance to $77,481 — an almost $20,000 increase. Add another 1% or increase your timeframe and you’ll see similarly significant results.


For example, 4% over 30 years using the same criteria would grow your account to $168,628.


Try it yourself by clicking on the compound interest calculator at www.investor.gov or, better yet, talk to a financial professional to learn more.


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