Why Regular Contributions Matter

Skipping a year could cost you

Little things have a way of adding up. Putting away small amounts today could add up to a sizeable retirement savings tomorrow.
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Power of compound earnings

By getting a jump on saving, you may accumulate more over time.
Chart showing the hypothetical ending account value before taxes based on $5,000 annual contributions. Start age: 25, end age: 70; total contributions: $230,000; ending account value before taxes: $1,641,122. Start age: 30, end age: 70; total contributions: $205,000; ending account value before taxes: $1,148,161. Start age: 35, end age: 70; total contributions: $180,000; ending account value before taxes: $796,687. Start age: 40, end age: 70; total contributions: $155,000; ending account value before taxes: $546,091.

This hypothetical example assumes the following (1) $5,000 annual IRA contributions on 1/1 of each year for the age ranges shown, (2) an annual rate of return of 7% and (3) no taxes on any earnings within the IRA. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Earnings and pre-tax (deductible) contributions from Traditional IRAs are subject to taxes when withdrawn. Earnings distributed from Roth IRAs are income tax free provided certain requirements are met. IRA distributions before age 59½ may also be subject to a 10% penalty. Systematic investing does not ensure a profit and does not protect against loss in a declining market. This example is for illustrative purposes only and does not represent the performance of any security.


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