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Saving even just a little today can lead to greater savings tomorrow.

If retirement is a long way off for you, and you're thinking of delaying saving, remember that such a decision could prove costly. Between a pandemic and economic uncertainty across the country, it's precisely for times like these that we plan for tomorrow. Saving money for your retirement now—even in small amounts—could lead to greater savings than trying to catch up in later years.

Here's a scenario as an example:

Ashley and Michael are both 22 and earn $35,000 a year. Ashley begins contributing $150 a month right away to her employer's retirement plan and continues for 13 years, until she stops at age 35. On the other hand, Michael puts off making contributions until he turns 35. Then, he contributes $150 monthly until he retires at age 67.

As the chart shows, Michael ends up with $168,871, while Ashley has $226,402. That's $57,531 less in retirement savings for Michael compared to Ashley, even though he contributed for 19 more years. Moreover, if Ashley were to continue contributing under the same 6% annual rate of return assumed for this scenario until age 67, her overall savings would be more than twice as much as Michael's.

Bottom line? The sooner you begin contributing, the more time the power of tax-deferred compounding and contributions to your retirement plan have to help you meet your long-term financial goals. Consider increasing your contribution amount annually until you are taking full advantage of any employer match, if offered. But don't stop there if you don't have to. Also consider going beyond the match, and continue to increase your contribution over time.


This hypothetical example is for illustrative purposes only and does not represent any actual investment performance, price or yield. This illustration assumes a beginning balance of $0 and a monthly retirement plancontribution of $150. The illustration uses an annual rate of return of 6%. Investment returns are not guaranteed, and your actual return may vary significantly from that shown.

You should consider the investment objectives, risks, and charges and expenses of the variable annuity contract and the underlying investment funds carefully before investing. This and other information is contained in the contract prospectus or brochure and underlying funds prospectuses and summary prospectuses, which can be obtained by calling 1-800-468-3785 or visiting Read them carefully before investing.

Mutual of America's group and individual retirement products are variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment options you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should consider a variable annuity contract's other features before making a decision.

The statement made in this article is by a client of Mutual of America and is not a paid testimonial. This testimonial may not be representative of the experience of other clients and is not indicative of future performance or success.

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