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The Price of Procrastination – Saving for Retirement


You may give up thousands of future dollars for every year you delay starting a tax-deferred retirement plan. Here’s why: Every year that you wait you are paying more in income taxes. And, every dollar lost to taxes is a dollar that cannot be used to help increase your future financial security.

More importantly, every year that you postpone establishing a plan represents a lost annual contribution—and every year of delay costs you a year’s worth of tax-deferred growth. The combination of lost contributions and lost tax-deferred earnings can be enormous.

A Case in Point
Suppose the following facts are true:

Your present age: 43
Assumed annual contribution: $15,000
Annual return: 9%
Your retirement age: 65
Number of years for payout: 20
Years you delay your plan: 2

Results With a Delay Without a Delay The Cost of Delay
Total Plan Contributions: $300,000 $330,000 $30,000
Earnings on Plan Assets: $536,468 $697,979 $161,511
Accumulation in 22 Yrs.: $836,468 $1,027,979 $191,511
Annual Retirement Income: $91,632 $112,611 $20,979
Total 20-Year Payout: $1,832,642 $2,252,230 $419,587

This is a hypothetical example for illustrative purposes only and does not represent the return of any specific product.

 

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. BNRDANGR-04

The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-156229
 


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