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Retirement: a contribution strategy that works.
While the economy as a whole has been experiencing a significant recovery for nearly two years, many investors are still hesitant to be optimistic. When coupled with the fact that a few organizations haven’t reinstated retirement incentive programs, it’s causing some to even doubt the usefulness of their contributions. However, this doubt is misplaced for one important reason. Outside influences like these won’t change the central fact about retirement plans: Every dollar you contribute will help enhance your financial security more than every dollar you don’t contribute.
To demonstrate this truth, and to help you develop a worthwhile contribution strategy, let’s examine a few facts you may not be aware of:
1. Your retirement plan is still one of your best resources for the future. Why? Three reasons stand out: Your contributions can lower your current taxable income, earnings on contributions grow tax deferred and contributions are taken out of each paycheck automatically so there's no need for you to budget funds and write a check. So when things get shaky, the solution is not to pull away from a retirement plan that can greatly benefit your future. In the long run, it’s just not worth it.
2. Your consistent contributions are key. Throughout history, most investors who have endured recessions and stayed on track to reach their retirement goals have a common story: consistent contributions. Rather than reduce or eliminate contributions during hard times, these investors held to a long-term strategy that involved steady saving habits aimed at reaching their retirement goals. For example, according to a March 2011 report from the Associated Press, 90% of retirement plans have fully recovered from the recession, and many who kept investing throughout the downturn are now ahead.
3. Your allocation forms the path to your goals. When planning a vacation, you don't just hop in the car without a plan. You choose a destination, find the best way to get there and determine how you’ll spend your stay. The same is true when it comes to retirement. You don’t just throw money at a retirement plan.
You consider your goals, calculate income requirements and distance from retirement and then determine an appropriate investment portfolio allocation that meets those needs. Without a carefully prepared allocation strategy, retirement planning can quickly become a series of guesses. And that’s a guessing game you can’t afford to lose.
GuideStone offers three easy-to-understand investment approaches that can help you to prepare an investment portfolio that meets your needs. These funds also remain competitive in the industry. For example, the esteemed fi360 Fiduciary Rankings ranked GuideStone’s funds 8 of 212 among its peers in March 2011. Review our funds today at www.GuideStoneRetirement.org/InvestmentChoices.
How do you determine a contribution strategy that works well? You look at the elements that have worked well throughout the course of history. Invest in a trustworthy retirement plan like that offered by GuideStone, maintain consistency in your contribution schedule and make sure your portfolio is allocated to meet your unique needs. And while that seems simple, it’s certainly not always easy. That’s why GuideStone is here to help you every step of the way. We have an unparalleled commitment to your financial security, and we stand ready to serve your retirement needs.
If you have any questions or would like more information, please contact Lea Hale by phone at 214-720-2100 or via email at lea.hale@guidestone.org.
You should carefully consider the investment objectives, risks, charges and expenses of the GuideStone Funds before investing. A prospectus with this and other information about the Funds may be obtained by calling 1-888-98-GUIDE (1-888-984-8433) or download one at www.GuideStone.org. It should be read carefully before investing.
The Fund Family Fiduciary Rankings™ is a quarterly report on the major fund families. Fi360 leverages the technology used to determine the Fi360 Fiduciary Score™ for mutual funds and exchange-traded funds to establish a ranking for each family. Only shops with five or more funds with at least a three-year track record are considered in the report. Within each fund family, the percentage of funds that have either a “Passed” (Fi360 Fiduciary Score™ 0) or Appropriate” (Fi360 Fiduciary Score™ 1-25) classification is calculated. This percentage is then used to rank order the families. In the instances where two or more fund families tie (share the same percentage), preference is give to the shop with the greater number of funds offered. All fund share classes are considered in the rankings.