3. Invest For Retirement
The power of tax-deferred compounding
Participating in a taxable savings plan
Participating in a tax-deferred retirement plan
Assumes a 25% federal tax bracket, a constant 8% annual return, a $1,200 annual investment in a tax-deferred retirement plan (before taxes) and a $1,200 annual investment in a comparable taxable savings plan. This illustration is hypothetical and does not represent the performance of any particular investment. Investing entails risks, including the possible loss of your principal. Actual returns cannot be predicted and will fluctuate in response to changing market conditions. Your results may be more or less. Retirement assets will be taxed eventually (upon withdrawal), and there may be a 10% federal tax penalty for withdrawals made prior to age 59½. This example assumes federal income tax only.