The Cost of Waiting

Retirement is a great place to be, but it's a long road to get there. Take the first step today!

Every day is an opportunity to build your savings so you can live your retirement dreams.

If you haven't started saving – or if you aren't saving enough - here are some important things to consider:

• People are living longer – Your earning years may not be much longer than your retirement years.
• The level of income you'll need to afford the lifestyle you desire during retirement may well exceed your current living expenses.
• Time is money – The sooner you start saving, the more time your investments will have to grow.

Investing just $300 per month will grow to $787,444 in forty years, assuming an average annual growth rate of 7%. If you put off saving for retirement for even just five years, that number shrinks to $540,316. So that $300 a month that you didn't save for retirement may have afforded you $18,000 worth of small luxuries over those five years, but it leaves you with $247,128 less when you retire. There is no doubt that the cost of waiting is very high.

These investment returns are not the only missed opportunity if you don't start saving now. If you work for a company that matches a portion of your retirement account contributions, waiting also costs you that company contribution and the investment returns on that amount.

And don't forget about the tax advantage of saving for retirement. When you make retirement account contributions on a pre-tax basis, a smaller percentage of each paycheck goes to the IRS. More importantly, your retirement funds won't be subject to taxes until you begin making withdrawals after your retirement party. Since your tax rate is likely to be lower after your employment years, the more you save now, the less income tax you pay in the long run.

This material is provided for educational purposes only and does not constitute investment advice. The information contained herein is based on current tax laws, which may change in the future. BlackRock cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided does not constitute any legal, tax or accounting advice. Please consult with a qualified professional for this type of advice.

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Prepared by BlackRock Investments, LLC, member FINRA.

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