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Saving EarlyThe Road to a Secure Retirement

April 2012

Saving Early: The Road to a Secure Retirement, March 2012 1

The one vital component of retirement savings you can control is

when you start saving

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Letter of Introduction

The one vital component of retirement savings you can control is whenyou start saving.

American families give themselves the best chance at a secure retirement

by saving early. Even small monthly amounts of money deposited into a

401(k) or IRA early in life can make a real difference in an individuals

ability to retire comfortably. In fact, small contributions today often matter

even more than big contributions down the road.

This is not to say that saving early guarantees a perfect retirement. Thereare a lot of factors about retirement we cannot control - including the state

of the stock market, real estate prices, and health care costs. We saw

these fluctuations during the 2008 economic crisis.

But when individuals embrace saving early for retirement and make it a

priority throughout their earning years, they put the power of compound

interest to work in their favor. For example, saving just $50 more a month

could mean hundreds of thousands of dollars of additional retirement

savings.

The one vital component of

retirement savings you can control is

WHEN you start saving.The financial services industry manages over $17 trillion of retirement

savings and is actively helping people understand and secure their

retirement futures. Many financial services companies provide life savingsplans, retirement calculators, online consultations, plans designed just for

women, audio podcasts, retirement readiness tests, and more. You will

read about what twenty companies are doing in this paper alone.

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If you have one takeaway from this report, let it be this: Save early. Its

not a gimmick or a throw-away line. Its the truth.

Please feel free to contact any of us if you have questions or comments.

Best regards,

Mr. Steve Bartlett Mr. Ronald OHanley

President and CEO President

The Financial Services Roundtable Asset Management and Corporate

Services

Fidelity Investments

Chair, The Retirement Security Coalition

Mr. Dale Brown Ms. Anna Cabral

President and CEO Former Treasurer of the United States

The Financial Services Institute Chair, The Retirement Security Coalition

Advisory Board

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Table of Contents

Growth of Private Retirement Accounts..5

Benefits of Starting Early...6

Resources for Starting Early....12

Sources16

About the Sponsoring Organizations..17

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Growth of Private Retirement Savings Accounts

Our nation has witnessed a dramatic shift in how people plan andsave for retirement. In years past, Americans relied primarily on

defined benefit plans such as Social Security or pensions. Now,

more and more Americans are relying on 401(k)s and Individual

Retirement Accounts (IRAs) products that were not in existence

even 30 years ago.

In 2011,

401(k)

balances

reached

record highs

as a result of

contributions

and earnings.

The trend towards private retirement savings accounts is especially clear

among non-retirees. Nearly two-thirds of non-retirees (64%) look to

private retirement accounts like 401(k)s or IRAs as major funding sourceswhen they retire. Only 26% plan to rely on Social Security, according to

Gallup polling. (Of current retirees, the majority still depend on Social

Security).

.

Confidence in private retirement savings accounts is matched by financial

commitment. As of 2011, nearly three-fourths (73%) of non-retiree

investors were invested in a 401(k) and nearly two-thirds (62%) had an

Saving Early: The Road to a Secure Retirement, March 2012 5

http://www.gallup.com/poll/150215/Investors-Feel-Affected-Social-Security-Medicare-Changes.aspxhttp://www.gallup.com/poll/150215/Investors-Feel-Affected-Social-Security-Medicare-Changes.aspxhttp://www.gallup.com/poll/150215/Investors-Feel-Affected-Social-Security-Medicare-Changes.aspxhttp://www.gallup.com/poll/146807/Investors-Look-Beyond-Social-Security-Fund-Retirement.aspxhttp://www.gallup.com/poll/146807/Investors-Look-Beyond-Social-Security-Fund-Retirement.aspxhttp://www.gallup.com/poll/150215/Investors-Feel-Affected-Social-Security-Medicare-Changes.aspxhttp://www.gallup.com/poll/150215/Investors-Feel-Affected-Social-Security-Medicare-Changes.aspxhttp://www.gallup.com/poll/150215/Investors-Feel-Affected-Social-Security-Medicare-Changes.aspx

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IRA. Additionally, a vast majority of non-retirees were putting in more

money (31%) or the same amount (42%) than they did the previous year.

As a result, 401(k) balances reached record highs at the end of 2011,according to Fidelity Investments.

Benefits of Saving Early

One key feature of private retirement savings accounts is the ability to

grow savings over time.

The number one way

consumers can increase theirretirement security is by

starting to save early. This is

worth repeating: the number

one way consumers can

increase their retirement

security is by starting to save

early.

DID YOU

KNOW?

The number

one way

consumers

can increase

theirretirement

security is by

saving

early.

The power of saving early isdue to the power of

compound interest.

Compound interest means

that interest accrues not only

on the base payments but

also on the interest earned.

As a result, a steady stream

of payments can createexponential growth.

Saving Early: The Road to a Secure Retirement, March 2012 6

http://www.gallup.com/poll/146807/Investors-Look-Beyond-Social-Security-Fund-Retirement.aspxhttp://www.gallup.com/poll/146807/Investors-Look-Beyond-Social-Security-Fund-Retirement.aspx

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For example, if you put $5,000 into a retirement account today, and did

nothing with that investment for 35 years, it would grow into $53,383 fromcompound interest alone, assuming a 6% growth rate.

Why Every Year CountsHypothetical Pre-tax Growth of one Annual IRA Contribution

$5,000

$53,383

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Today At Retirement (35 Years Later)

Source: Fidelity Investments

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Small contributions made early can add up to even more moneythan

large contributions made later. Consider the following example:

When is $10,000 Greater than $30,000? Jane, a 25-year old,

contributes $1,000 to her IRA for 10 years (for a total of $10,000 of

contributions). Lance, another 25-year old, makes no contributions

during those first 10 years, but then contributes $1,000 each year

for the next 30 years (for a total of $30,000 in contributions). Who

has more money when they are 65 years old, Jane or Lance? Jane

(who contributes less money, but started saving earlier) winds up

with more retirement savings, assuming a 7% annual growth rate.

When is $10,000 Greater than $30,000?

$10,000$30,000

$107,749 $72,254

$0

$20,000

$40,000$60,000

$80,000

$100,000

$120,000

$140,000

Jane contributes

$10k over the first

10 years and stops.

Lance does not

contribute over the

first 10 years but

contributes $30k

over the next 30

years.

Savingsup

onRetirement

Investment Earnings

Contributions

Source: The Financial Services Roundtable

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The cost of waiting to save can be tens of thousands even if you wait

only a few years. Consider another example:

Cost of Waiting Only 5 Years: $84,099: Based on a $30,000

salary and 6% annual contribution with an assumed 8% average

rate of return, one starting to save today will have earned over

$331,000 after 30 years. One starting in 5 years from now will have

earned an estimated $247,000. The cost of waiting just 5 years to

save is dramatic an $84,000 difference.

$331,416.00

$247,317

$0.00

$50,000.00

$100,000.00

$150,000.00

$200,000.00

$250,000.00

$300,000.00

$350,000.00

Account after 30 years if

you start saving today

Account after 30 years if

you wait 5 years to begin

saving

Cost of Waiting: $84,099

Source: America Funds

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Thats a lot of scenarios pointing to the same conclusion - the greatest

bang-for-your-buck is to put away whatever money now. Of course, thisimpact can be compounded by how much money you put away early.

Take the example of contributing just $50 more a month. The results

show even this small amount monthly can add up to hundreds of

thousands of dollars if it is invested over a long period of time.

Contributing just $50 more per month can make a big difference

$110,400

$653,430

$138,000

$816,788$763,830

$954,788

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$200/mo

Total Contributions + Earnings = Balance at age 70

$250/mo

This hy onthly $250 nd $200 IRA con e first f each month e 70, (2)

annual r e of return of 7%, compounded monthly, and (3) no taxes on any earnings within the IRA. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be

lower. Earnings and pre-tax (deductible) contributions from Traditional IRAs are subject to taxes when withdrawn. Earnings distributed from Roth IRAs are income tax free provided certain

requirements are met. IRA distributions before age 59 1/2 may also be subject to a 10% penalty. Systematic investing does not ensure a

declining market. This example is for illustrative purposes only and does not represent the performance of any security.

Fidelity Brokerage Services, Member NYSE/SIPC900 Salem Street

Smithfield, RI 02917

Hypothetical pre-tax account values after monthly contributions from age 25 to 70

pot

at

hetical example assumes the following: (1) m a tributions made on th o beginning at age 25 and continuing through ag

profit and does not protect against loss in a

Total Contributions + Earnings = Balance at age 70

Source: Fidelity Investment

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It is important to note that when you start saving is only onefactor

impacting retirement savings. There are numerous other factors toconsider, including deferral amounts, asset allocation, and determining

how long you plan on working. Additionally, there are other factors

outside of a savers control, such as real estate prices, health care costs,

costs of living, or the market. Historically, the upside of the market has

been substantially larger than the downside, but there are still inherent

risks in stocks and bonds.

90% of

people have

more money

in their 401(k)

now than

they did atthe market

top of 2007.

Retirement investors must

recognize the importanceof investing for the long

term when it comes to

retirement savings. We all

witnessed the dramatic

market volatility of the past

few years. However,

since the financial crisis, it

is important to note that

the vast majority of private

retirement accounts have

recovered lost balances.

In fact, over 90 percent of

people with 401(k)

retirement accounts have

more money in their

accounts than they did at

the 2007 market top due to

increased contributions

and market growth,according to the

Employment Benefit

Research Institute.

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Resources for Starting Early

Financial services companies are offering innovative tools and services tohelpconsumers understand how long (and how much) they should be

saving for their desired retirements. A selection of resources is as

follows:

Allstate provides easy to follow Life Tracksavings plans to guide your

savings throughout each life stage and event.

Allstate

offers Life

Track

Savings

Plans go

guide your

savings

throughout

each life

stage

AXA Equitable offers virtual retirement savings consultations that guide

you through a step-by-step process to estimate how long your retirementsavings may last.

Bank of America created Retirement Contact Centers to help simplify the

retirement process and handle customer inquiries.

BB&T provides retirement tips and solutions called, "Learn & Plan," which

is complete with audio podcasts on a host of issues, ranging from estate

planning to calculators for budgeting and saving for retirement.

BBVA Compassoffers a retirement calculator to help determine yourprojected shortfall or surplus at retirement age.

Diversified provides participants with their Retirement Outlook, an

intuitive measure of retirement readiness that is provided online and via a

short and straightforward report. Diversified also provides a number of

easy to use calculators to help participants save and invest wisely.

Fidelity Investments helps you determine your retirement readiness in

five easy steps.

HSBCs The Future of Retirement program is a world-leading independent

study into global retirement trends, surveying 110,000 people worldwide

since its inception in 2005. The latest report is Why Family Matters.

Additionally, HSBCs YourMoneyCounts.com offers a valuable resource

Saving Early: The Road to a Secure Retirement, March 2012 12

http://www.myallstatefinancial.com/life-tracks/planning-retirement.aspxhttp://ourfinancialfuture.com/news-center/article/resolving-to-save-more-for-retirement?utm_source=On+Balance+Newsletter&utm_campaign=866e7db544-On_Balance_51_31_2012&utm_medium=email#savingshttp://ourfinancialfuture.com/news-center/article/resolving-to-save-more-for-retirement?utm_source=On+Balance+Newsletter&utm_campaign=866e7db544-On_Balance_51_31_2012&utm_medium=email#savingshttp://www.axa-equitable.com/learning-center/tools-and-calculators/virtual-calculators.htmlhttp://learn.bankofamerica.com/articles/money-management/how-much-do-you-need-for-retirement.htmlhttp://bbt.com/bbt/Financial-Education/default.htmlhttp://www.bbvacompass.com/wealth/http://www.bbvacompass.com/wealth/http://multimedia.divinvest.com/calc/savingEnough/http://multimedia.divinvest.com/calc/savingEnoughhttps://www.fidelity.com/retirement/calculators/retirement-calculatorshttps://www.fidelity.com/retirement/calculators/retirement-calculators.http://www.hsbc.com/1/2/retirement/for-family-mattershttp://yourmoneycounts.com/http://yourmoneycounts.com/http://yourmoneycounts.com/http://yourmoneycounts.com/http://www.hsbc.com/1/2/retirement/for-family-mattershttps://www.fidelity.com/retirement/calculators/retirement-calculators.https://www.fidelity.com/retirement/calculators/retirement-calculatorshttp://multimedia.divinvest.com/calc/savingEnoughhttp://multimedia.divinvest.com/calc/savingEnough/http://www.bbvacompass.com/wealth/http://bbt.com/bbt/Financial-Education/default.htmlhttp://learn.bankofamerica.com/articles/money-management/how-much-do-you-need-for-retirement.htmlhttp://www.axa-equitable.com/learning-center/tools-and-calculators/virtual-calculators.htmlhttp://ourfinancialfuture.com/news-center/article/resolving-to-save-more-for-retirement?utm_source=On+Balance+Newsletter&utm_campaign=866e7db544-On_Balance_51_31_2012&utm_medium=email#savingshttp://ourfinancialfuture.com/news-center/article/resolving-to-save-more-for-retirement?utm_source=On+Balance+Newsletter&utm_campaign=866e7db544-On_Balance_51_31_2012&utm_medium=email#savingshttp://www.myallstatefinancial.com/life-tracks/planning-retirement.aspx

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for those searching for answers to specific questions or simply looking to

improve their general level of financial education.

ING U.S. offers a comprehensive resource,www.RetireWithING.com, that provides free retirement saving

information and education, along with access to a financialprofessional. ING also offers a number of online planning andsavings tools to the public, including www.INGCompareMe.comwhich lets an individual compare themselves financially to theirpeers.

PNC helps

consumers

build apersonalized

checklist of

action steps

to help them

achieve their

retirement

goals.

LPL Financial Retirement Partners has a Retirement Partners tool suite

for advisors, which tracks plan successes and quickly compares plan fees

and design.

PNC Financial Services Group offers the Next Step Guide to

Retirement. The Next Step Guide assists consumers in building a

personalized checklist of action steps to help them achieve their

retirement goals. It also offers quick and easy access to robust

retirement-related tools including a Retirement Savings Calculator and a

Debt & Retirement Analyzer.

Saving Early: The Road to a Secure Retirement, March 2012 13

http://www.retirewithing.com/http://www.ingcompareme.com/http://investor.lpl.com/releasedetail.cfm?ReleaseID=613638http://investor.lpl.com/releasedetail.cfm?ReleaseID=613638http://www.pncsites.com/retirementcenter/retirement_savings_calculator.htmlhttp://www.pncsites.com/retirementcenter/retirement_savings_calculator.htmlhttp://www.pncsites.com/retirementcenter/retirement_savings_calculator.htmlhttp://www.pncsites.com/retirementcenter/retirement_savings_calculator.htmlhttp://www.pncsites.com/retirementcenter/retirement_savings_calculator.htmlhttp://www.pncsites.com/retirementcenter/retirement_savings_calculator.htmlhttp://investor.lpl.com/releasedetail.cfm?ReleaseID=613638http://investor.lpl.com/releasedetail.cfm?ReleaseID=613638http://www.ingcompareme.com/http://www.retirewithing.com/

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Putnam Investments provides

a state-by-state tax rate map

and retirement-income toolcalculator.

Raymond James offers a free

online guide for making the best

retirement decisions for your

individual situation.

State Farm publishes easy-to-

understand retirement advice in

its Retirement Learning Centerand also provides its own

savings calculators to help

answer many individuals

retirement questions. In

addition, State Farm agents

offer a robust platform of

financial literacy and retirement seminars in the communities they serve.

SunTrust publishes a monthly Retirement e-newsletter, integrated withLiveSolid.com, which includes helpful articles about retirement, videos,

tips and more.

Wells Fargooffers a

retirement

site just for

women

The Principal Financial Group offers My Principal Edge Milestones.

Participants whove used Milestones save an average of 39% more for

retirement than those who havent used the tool. That could mean an

additional $150,000 at retirement.

Transamerica Retirement Services offers brief videos that are designed

to educate individuals on retirement planning. In addition, you are also

able to access investment calculators to help you determine how much

you will need to save in order to reach your retirement goal.

Wells Fargo offers retirement planning byage groupsand offersBeyond

Today, a retirement site for women with tools by ages and stages,

checklists and blogs from nationally-recognized authors.

Saving Early: The Road to a Secure Retirement, March 2012 14

https://www.putnam.com/retirement-matters/https://www.putnam.com/retirement-income-funds/https://www.putnam.com/retirement-income-funds/http://www.raymondjames.com/making_right_distribution.htmhttp://www.raymondjames.com/making_right_distribution.htmhttp://learningcenter.statefarm.com/http://ourfinancialfuture.com/news-center/article/resolving-to-save-more-for-retirement?utm_source=On+Balance+Newsletter&utm_campaign=866e7db544-On_Balance_51_31_2012&utm_medium=email#savingshttp://www.livesolid.com/en-US/index.jspxhttp://www.livesolid.com/en-US/index.jspxhttp://www.livesolid.com/en-US/index.jspxhttp://www.livesolid.com/en-US/category/my-retirement.jspxhttp://www.principal.com/yourmilestoneshttps://www.ta-retirement.com/Employer/ps_content_viewer.aspx?UserType=S&id=980https://www.ta-retirement.com/Portal/po_content_viewer.aspx?UserType=R&id=549http://www.wellsfargo.com/retirementplan/http://www.wellsfargo.com/retirementplan/http://www.wellsfargo.com/retirementplan/https://www.wellsfargo.com/beyondtoday/https://www.wellsfargo.com/beyondtoday/https://www.wellsfargo.com/beyondtoday/https://www.wellsfargo.com/beyondtoday/http://www.wellsfargo.com/retirementplan/https://www.ta-retirement.com/Portal/po_content_viewer.aspx?UserType=R&id=549https://www.ta-retirement.com/Employer/ps_content_viewer.aspx?UserType=S&id=980http://www.principal.com/yourmilestoneshttp://www.livesolid.com/en-US/category/my-retirement.jspxhttp://www.livesolid.com/en-US/index.jspxhttp://ourfinancialfuture.com/news-center/article/resolving-to-save-more-for-retirement?utm_source=On+Balance+Newsletter&utm_campaign=866e7db544-On_Balance_51_31_2012&utm_medium=email#savingshttp://learningcenter.statefarm.com/http://www.raymondjames.com/making_right_distribution.htmhttp://www.raymondjames.com/making_right_distribution.htmhttps://www.putnam.com/retirement-income-funds/https://www.putnam.com/retirement-income-funds/https://www.putnam.com/retirement-matters/

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This is just a selection of the resources available to consumers for helping

to increase retirement savings. Ultimately, it is up to the consumer to take

the right step and start putting money away early.

Saving Early: The Road to a Secure Retirement, March 2012 15

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Sources

Bloomberg. Retirement Calculator. http://www.bloomberg.com/personal-finance/calculators/retirement/

Correia, Margarida. "Cerulli Predicts U.S. Retirement Market Will Exceed

$22 Trillion by 2016 . Bank Investment Consultant. January 30, 2010.

Employee Benefit Research Institute, "Retirement Research." August

2011.

Holden, Sarah, and Daniel Schrass. "ICI Research Perspective." ICI.November, 2011.

Jacobe, Dennis. Investors Look Beyond Social Security to Fund

Retirement, Gallup, March 25, 2011

Mercado, Darla. Expectations-Retirement-Funding. January 30, 2012.

Reuters, Fidelity Releases Quarterly Snapshot on 401(k)s Showing

Average Savings Inched Higher in 2011, February 9, 2012.

Washington Post, Fidelity: Average 401(k) balances end 2011 largely

unchanged, despite higher contributions. February 9, 2012.

Saving Early: The Road to a Secure Retirement, March 2012 16

http://www.bloomberg.com/personal-finance/calculators/retirement/http://www.bloomberg.com/personal-finance/calculators/retirement/http://www.bloomberg.com/personal-finance/calculators/retirement/http://www.bloomberg.com/personal-finance/calculators/retirement/http://www.bloomberg.com/personal-finance/calculators/retirement/

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Saving Early: The Road to a Secure Retirement, March 2012 17

About the Sponsoring Organizations

The Financial Services Roundtable represents 100 of the largestintegrated financial services companies providing banking,

insurance, and investment products and services to the American

consumer. The mission of The Financial Services Roundtable is to

protect and promote the economic vitality and integrity of its

members and the United States financial system. Roundtable

member companies provide fuel for America's economic engine,

accounting directly for $92.7 trillion in managed assets, $1.2 trillion

in revenue, and 2.3 million jobs. More information about the

Roundtable and its research can be accessed at www.fsround.org.

The Financial Services Institute (FSI) is an advocacy organization for

independent financial services firms and independent financial advisors.

Established in January 2004, we have well over 100 broker-dealer

members and over 35,000 financial advisor members. Our member firms

have upwards of 180,000 financial advisors affiliated with them. Our

mission is to create a more responsible regulatory environment for

independent broker- dealers and their affiliated independent financial

advisors through effective advocacy, education and public awareness.And our strategy includes involvement in FINRA governance, constructive

engagement in the regulatory process and effective influence on the

legislative process. For more information, please visit

www.financialservices.org.

The Retirement Security Coalition (RSC) is a project of the Financial

Services Roundtable that is concerned with improving Americas

retirement readiness. Guided by an Advisory Board made up of the

nations leading financial literacy and retirement security nonprofits, theRSC is dedicated to increasing the totality of the nations retirement

security by empowering individuals to take responsibility for their own

retirement security. For more information, please visit

http://retirementsecuritycoalition.wordpress.com/.

http://www.fsround.org/http://www.financialservices.org/http://retirementsecuritycoalition.wordpress.com/http://retirementsecuritycoalition.wordpress.com/http://www.financialservices.org/http://www.fsround.org/