4 TIPS FOR RETIREMENT PLANNING UNDER 40

In your twenties and thirties, planning for retirement is about laying a strong foundation. Consider the following tips as you plan for your future:

1. Put time on your side

The sooner you begin saving for retirement, the more time your money has the potential to grow.  When you are younger, you can make time your best friend because of compounding – when you receive earnings on your earnings. Compounding can be a powerful wealth-building tool you’ll want to take advantage of.

Saving consistently over time can pay off later:

  • Aim to save 10% to 15% of your pre-tax income in your retirement plan in the ABA Retirement Funds Program (“Program”).
  • Even if you start small, think about increasing your contributions every year (even increasing by 1% can help).
  • If your employer offers matching contributions, contribute enough of your plan-eligible pay each year to take advantage of the full match.
  • Log in to your account to use myOrangeMoney®1, an interactive tool, that allows you to see how increasing your retirement savings by just a little can help fund your retirement income for the long term.

2. Build an emergency fund

Life is full of surprises. Work to shield yourself from unexpected expenses (like car or house repairs) and needing to dip into your retirement savings, by saving three to nine months of living expenses in an emergency fund.

You can do this gradually over time, so it feels less like a burden. Consider putting the money into a separate, readily accessible, insured, bank account that earns some interest. Use your emergency fund only for true emergencies, such as a prolonged illness, a car accident, or a critical home repair.

3. Check in on your investment strategy

The further you are from retirement, the more long-term your savings goals likely are, and that can affect which investment strategy is right for you. For example, you might consider a growth-oriented mix of high-risk investments to be a better fit than a low-risk investment mix designed to preserve your savings because you have more time and you can ride out volatility relating to short-term fluctuations in the value of your investments.

Since everyone’s situation is unique, it’s essential to identify your own personal comfort level with investment risk. Explore the following resources for help assessing how much risk is right for you:

After determining your risk preference, you can review the investment options available in your retirement plan in the Program here or by logging in to your online account. If you’d like to make a change to your investment strategy, you can do so within your online account or by calling the Customer Contact Center at 800.348.2272.

It’s a good idea to revisit your investment strategy as you get closer to retirement to ensure your investments continue to match your goals.

4. Ask for help

Even if you’re pretty confident about picking investments and making other retirement savings decisions, it can be helpful to have some professional guidance. A professional can help review your current situation, explore your options, and create a plan that fits your personal circumstances. Financial advice is available through your plan in the Program, including personalized one-on-one sessions for no additional cost. Visit our Financial Advice page to learn more.

IMPORTANT: The illustrations or other information generated by the calculators are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. This information does not serve, either directly or indirectly, as legal, financial or tax advice and you should always consult a qualified professional legal, financial and/or tax advisor when making decisions related to your individual tax situation.

Advisory Services provided by Voya Retirement Advisors, LLC (VRA). VRA is a member of the Voya Financial (“Voya”) family of companies. For more information, please read the Voya Retirement Advisors Disclosure Statement, Advisory Services Agreement and the ABA Retirement Funds Program’s (“Program’s”) Fact Sheet. These documents may be viewed online by accessing the advisory services link(s) through the Program’s web site at abaretirement.com after logging in. You may also request these from a VRA Investment Advisor Representative by calling the Program’s information line at 800.348.2272. Financial Engines Advisors L.L.C. (FEA) acts as a sub advisor for VRA. FEA  is a federally registered investment advisor. Neither VRA nor FEA provides tax or legal advice. If you need tax advice, consult your accountant or if you need legal advice consult your lawyer. Future results are not guaranteed by VRA, FEA or any other party and past performance is no guarantee of future results. Edelman Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All other marks are the exclusive property of their respective owners. FEA and Edelman Financial Engines, LLC are not members of the Voya family of companies. © 2024 Edelman Financial Engines, LLC. Used with permission.

Financial Professionals are investment advisor representatives and/or registered representatives of, and securities and investment advisory services are offered through Voya Financial Advisors, Inc. (VFA) (member SIPC). Investment advisory services are only offered through investment advisor representatives of Voya Financial Advisors.

Please note that while VFA Financial Professionals do not make money on individual conversations, the products and programs they offer have fees and costs associated with them. Please refer to the disclosures/prospectuses of the individual products for additional pricing information.

Neither VFA nor its registered representatives offer legal or tax advice. For tax or legal advice please consult with your attorney or tax advisor.

Please read the Program Annual Disclosure Document (April 2024) carefully before investing. This Disclosure Document contains important information about the Program and investment options. Contact us at: [email protected]

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