Enrolling in your workplace retirement plan is one of the smartest moves you can make—and you only need to make a few decisions to get started. Follow these three steps to begin saving for your future.
Step 1: Decide how much to save
Even modest contributions, such as 6% of your income, can add up over time. The important thing is to save. Use our Cost of Delay Calculator to see how much more you may have for retirement if you start saving today rather than waiting. A good rule of thumb is to contribute 10% to 15% of your pay to your retirement plan. Remember, inflation is going to make your lifestyle more expensive in the future. People are living longer, so your retirement may last 20 to 30 years—or more. You’ll want to make sure your savings will last throughout retirement.
Step 2: Decide how to invest
Investing can seem intimidating, but it doesn’t have to be. Depending on your retirement plan, you may have two ways to create a diversified investment portfolio.
I am considering a target-date or life-cycle fund
You may be considering a professionally managed, all-in-one investment option known as a target-date or life-cycle fund as a way to invest your entire account. These options normally include a mix of stocks and bonds mutual funds in a single investment, managed to your retirement timeline and/or tolerance for risk. All-in-one funds are commonly available in retirement plans. Target date funds have the additional advantage of automatically rebalancing, so the investment mix becomes more conservative as your projected retirement date approaches.
The target date is the approximate date when investors plan to retire or start withdrawing their money. Some target-date funds make no changes in asset allocation after the target date is reached; other target-date funds continue to make asset allocation changes following the target date. (See prospectus for the fund’s allocation strategy.) The principal value is not guaranteed at any time, including at the target date. An asset allocation strategy doesn’t guarantee performance or protect against investment losses. A “fund of funds” has an additional level of expensing.
I am considering doing it myself
If you enjoy learning about investments and want to build your own portfolio from the plan’s lineup, you may prefer to manage investments on your own.
Once you decide on your approach, review the investment options offered in your employer retirement plan. And remember, even experienced investors can use help. A financial professional can help you develop a retirement savings strategy that fits your personal situation.
Step 3: Sign up
It’s time to enroll! Depending on your plan, you may have a paper enrollment packet or an online option. Check with your HR department for more information.
Have a retirement plan with Lincoln Financial? Register now.
Mutual funds and variable annuities are sold by prospectus. Investors are advised to consider carefully the investment objectives, risks, and charges and expenses of a mutual fund and, in the case of a variable annuity, the variable contract and its underlying investment options. To obtain a mutual fund or variable annuity prospectus that contains this and other information, call 800-4LINCOLN. Read the prospectus carefully before investing or sending money.