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Retirement Planning and Funding
Will you be able to afford to retire?
It requires careful planning to ensure your "nest egg" provides a steady stream of income throughout your retirement. In order to maintain their chosen lifestyles, retirees will need a variety of resources to help meet their income needs and outpace inflation after they stop working.
 The following chart illustrates the power of compounding and how beneficial it can be to start saving early. At age 25, Mary began contributing $2,000 each year for retirement and then stopped after contributing $20,000 over ten years. John began contributing for retirement at age 35 and continued to invest every year for the next 30 years. Both investors' tax-deferred accounts earned 7% annually.
The Cost of Delaying1
(Alternate plain text view of table)
| Mary | John |
|---|
| Age | Years | Contributions | Year-End
Value | Age | Years | Contributions | Year-End
Value |
| 25 | 1 | $2,000 | $2,145 | 25 | 1 | $0 | $0 |
| 26 | 2 | $2,000 | $4,444 | 26 | 2 | $0 | $0 |
| 27 | 3 | $2,000 | $6,910 | 27 | 3 | $0 | $0 |
| 28 | 4 | $2,000 | $9,554 | 28 | 4 | $0 | $0 |
| 29 | 5 | $2,000 | $12,389 | 29 | 5 | $0 | $0 |
| 30 | 6 | $2,000 | $15,430 | 30 | 6 | $0 | $0 |
| 31 | 7 | $2,000 | $18,690 | 31 | 7 | $0 | $0 |
| 32 | 8 | $2,000 | $22,185 | 32 | 8 | $0 | $0 |
| 33 | 9 | $2,000 | $25,934 | 33 | 9 | $0 | $0 |
| 34 | 10 | $2,000 | $29,953 | 34 | 10 | $0 | $0 |
| 35 | 11 | $0 | $32,118 | 35 | 11 | $2,000 | $2,145 |
| 36 | 12 | $0 | $34,440 | 36 | 12 | $2,000 | $4,444 |
| 37 | 13 | $0 | $36,930 | 37 | 13 | $2,000 | $6,910 |
| 38 | 14 | $0 | $39,599 | 38 | 14 | $2,000 | $9,554 |
| 39 | 15 | $0 | $42,462 | 39 | 15 | $2,000 | $12,389 |
| 40 | 16 | $0 | $45,532 | 40 | 16 | $2,000 | $15,430 |
| 41 | 17 | $0 | $48,823 | 41 | 17 | $2,000 | $18,690 |
| 42 | 18 | $0 | $52,353 | 42 | 18 | $2,000 | $22,185 |
| 43 | 19 | $0 | $56,137 | 43 | 19 | $2,000 | $25,934 |
| 44 | 20 | $0 | $60,195 | 44 | 20 | $2,000 | $29,953 |
| 45 | 21 | $0 | $64,547 | 45 | 21 | $2,000 | $34,263 |
| 46 | 22 | $0 | $69,213 | 46 | 22 | $2,000 | $38,884 |
| 47 | 23 | $0 | $74,216 | 47 | 23 | $2,000 | $43,840 |
| 48 | 24 | $0 | $79,581 | 48 | 24 | $2,000 | $49,154 |
| 49 | 25 | $0 | $85,334 | 49 | 25 | $2,000 | $54,851 |
| 50 | 26 | $0 | $91,503 | 50 | 26 | $2,000 | $60,961 |
| 51 | 27 | $0 | $98,118 | 51 | 27 | $2,000 | $67,513 |
| 52 | 28 | $0 | $105,211 | 52 | 28 | $2,000 | $74,538 |
| 53 | 29 | $0 | $112,817 | 53 | 29 | $2,000 | $82,071 |
| 54 | 30 | $0 | $120,972 | 54 | 30 | $2,000 | $90,148 |
| 55 | 31 | $0 | $129,717 | 55 | 31 | $2,000 | $98,810 |
| 56 | 32 | $0 | $139,094 | 56 | 32 | $2,000 | $108,097 |
| 57 | 33 | $0 | $149,150 | 57 | 33 | $2,000 | $118,056 |
| 58 | 34 | $0 | $159,932 | 58 | 34 | $2,000 | $128,735 |
| 59 | 35 | $0 | $171,493 | 59 | 35 | $2,000 | $140,186 |
| 60 | 36 | $0 | $183,890 | 60 | 36 | $2,000 | $152,464 |
| 61 | 37 | $0 | $197,184 | 61 | 37 | $2,000 | $165,631 |
| 62 | 38 | $0 | $211,438 | 62 | 38 | $2,000 | $179,749 |
| 63 | 39 | $0 | $226,723 | 63 | 39 | $2,000 | $194,887 |
| 64 | 40 | $0 | $243,113 | 64 | 40 | $2,000 | $211,120 |
| 65 | 41 | $0 | $260,688 | 65 | 41 | $2,000 | $228,527 |
Despite the fact that John contributed three times more than Mary, at age 65 Mary had earned almost twice as much as John.
| Mary | John |
|---|
| Value at Retirement: | $260,688 | $228,527 |
| Less Total Contributions: | $20,000 | $62,000 |
| Net Earnings:1 | $240,688 | $166,527 |
It is never too early to start planning for your financial future. We can help you.
Step 1 -- Determine Retirement Income Needs
Step 2 -- Select the Right Plan
Step 3 -- Choose Suitable Investments for Your Plan
Notes:
- This return is hypothetical and for illustration only and is not indicative of the return of any particular investment. Your investment returns will vary based on economic conditions. Return
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Diversified Securities Inc. 1000 Lakes Dr #420, West Covina, California 91790
Telephone (626) 919-3456 / (909) 949-3300 / (800) 365-7749 Fax (626) 919-6127
E-Mail joerubins@divsecs.com
California Insurance License Number: 0A68771
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Last update: 14 January, 2008
Copyright © 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011 by Joe Rubinstein/Diversified Securities, Inc. and CitiVU. All rights reserved.
Securities and Investment Advisory Services offered through H. Beck Inc. H. Beck, Inc. and Diversified Securities are not
affiliated. H. Beck, Inc. Member FINRA, SIPC, MFA
Joseph Rubinstein is securities registered in the following states: AZ, CA, CO, FL, GA, HI, ID, IL, ME, MT, NE, NH, NJ, NM, NV, NY, OK, OR, PA, TN, TX, VA, WA.
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