This graph shows how an early start can give your money more time for principal growth. It assumes monthly investments of $100 and a hypothetical 6 percent average annual total return. Notice how the money compounds and works harder with time.

Graph and figures are hypothetical and for illustrative purposes only and do not represent any actual investment performance or yield

Some young people think that saving for retirement is something to put off until middle age. And some middle-aged people who don't have as much set aside for retirement as they had hoped by now think that there is not much that they can do about it. These are both common misconceptions.

The truth is, the earlier you begin a regular retirement savings program, the better. And, if you are older and have some catching up to do, you may still be able to bring your retirement goal within your grasp.

Tips for younger individuals
Compounding is the "magic" word for individuals who get an early start at building retirement assets. Compounding makes your money work harder for you. You invest principal, and as earnings accumulate, your principal can grow. The more time your money has in which to compound, the greater your growth potential. And, if you invest regularly, you can enhance that growth potential even more.

As the accompanying graph illustrates, an early start at investing may make investing less costly to you in terms of how much you need to contribute toward retirement and other financial goals.

Ideas for individuals who need to catch up
Maybe you got a late start at preparing for retirement, or you want to retire sooner than you originally had intended. Or, perhaps you had to stop setting aside retirement dollars for a while, or needed to use some of your nest egg for another financial need. Whatever the reason, you may want to consider some of these strategies to help you get back on track toward your retirement goal:

• Increase the amount you invest. Make the maximum annual contributions to your retirement plan and other retirement accounts. Once you've done that, consider adding more money to other investments and earmark those additional funds for retirement. The more you contribute, the more you may potentially accumulate by the time you retire.
  
  
• Trim current expenses. Squeeze your budget to "find" more money to put toward retirement. Simple changes such as dining out less often and cutting back on magazine subscriptions can make a difference. Consider that $40 per month ($10 per week) invested at a hypothetical 6 percent average annual total return can grow to $18,231 in 20 years.*
  
  
• Revise your investment strategy. You may want to consider investing more aggressively for growth potential, provided that doing so would suit your objectives and feelings about risk. Consider that if the hypothetical rate of return in the above example were 7 percent instead of 6 percent, the outcome at 20 years would be $20,423.*

*Example is hypothetical and for illustrative purposes only. Figures do not represent any actual investment's performance or yield.

The above article is for general information only and is not intended to provide specific advice or recommendations for any individual. Consult your attorney, accountant, or financial or tax advisor with regard to your individual situation.

Mutual of America Life Insurance Company is a Registered Broker-Dealer.