Enrolling in your workplace retirement plan is one of the easiest ways to start planning for your financial future. As you begin your retirement savings journey, you may have questions about your plan’s key features and benefits.
Lincoln is here to help. We offer information, tools, and resources designed to help you get started and create a retirement savings strategy that works for you.
Don’t wait to save
When it comes to saving for retirement, sooner is always better. The longer your money is saved, the more opportunity it has to grow — and even modest contributions can add up over time.
The choices you make today can impact your future, and especially your retirement readiness. You’ll need to account for inflation when considering your future lifestyle and expenses. Also, it’s important to remember that people are living longer today. This is great news, but it means you have to plan for a longer retirement.
Starting early to save and regularly increasing contributions can help you make the most of your workplace plan and get on track for the future you envision.
Don’t wait to participate!
Use the Cost of Delay Calculator to see the potential impact of waiting to save.
Benefits of your workplace retirement plan
Saving in your workplace retirement plan is an important investment in your financial future. Make sure you understand the key benefits of your workplace retirement plan so you can maximize your savings and prepare for a confident retirement.
Take a look at the following benefits your plan may offer:
The amount or percentage you choose to contribute will be deducted automatically from your paycheck each month—no bills to pay or paperwork to fill out.
You’re more likely to save on a steady basis when you don’t have to take action with each paycheck. Automatic deductions can help you save consistently over time without even thinking about it.
Pretax contributions reduce your total taxable income and allow your savings to grow tax-deferred. You won’t have to pay taxes until you withdraw money from the plan, and taxes may be lower on withdrawals you make during retirement.
Some employers also allow after-tax retirement contributions. If you make after-tax contributions to your plan, qualified withdrawals made during retirement aren’t taxed.
Your employer may offer matching contributions. If so, your employer will contribute a specified amount to your account for every dollar you contribute, up to the stated limit. For example, your employer may add 25 cents for every dollar you contribute, up to a certain amount. Make sure you contribute enough to receive the full match your employer offers—otherwise, you’re leaving free money on the table!
Pretax or Roth contributions?
Your retirement plan may allow both types of contributions – both offer tax advantages, but they differ in several key ways. Learn more about pretax and Roth contributions.
How to enroll
Participating in your workplace retirement plan begins with two important decisions— how much to save and how to invest your money. This decision is unique for every person and may depend on factors like your age and current savings habits.
Step 1: Decide how much to save
In general, a good rule of thumb is to contribute 10% to 15% of your pay to your retirement plan. This may seem like a lot if you’re new to saving — and that’s okay. Try starting with a smaller contribution of 6% and gradually increasing the amount over time until you reach 15%.
If you already feel confident in your savings habits, consider contributing the maximum amount now. If you’re age 50 or older, you also may want to consider catch-up contributions.
Step 2: Decide how to invest
Once you’ve decided how much to contribute, choose how you’ll invest your money. You can start by learning what type of investor you are.
If you want one diversified portfolio that's managed for you, consider making an all-in-one choice. Target-date portfolios invest according to the year you expect to retire — your target date. Target-risk portfolios base their investment mixes on your sensitivity to the ups and downs of the market.
If you’re interested in investments and want to build your own portfolio, consider selecting your own investments from your plan’s lineup. Options will vary in terms of risk and earnings potential.
If you’d prefer to let someone else manage your investments entirely, consider using a managed account service that puts your portfolio in the hands of a professional. This option may require you to pay a fee for using a professional account management service.
Save for retirement now or later?
Starting off on the right foot can have a major impact on your retirement savings journey. Watch this video to see the importance of a strong start.
Ready to get started?
It’s time to start saving for your future! Enroll today and register for online account access. Just a few minutes today can make a lifetime of difference.