Retirement Investing Tips by Age
Investors of different ages have varying needs, concerns and goals. Below are some tips to help meet those needs and stay on
track to achieve long-term goals.
30-somethings: Juggling Competing Savings Goals
Those in their 30s are facing a variety of competing savings priorities, from paying down student loans and meeting everyday
spending needs to saving for longer-term goals such as a first home, a family, or retirement.
Contribute to your workplace savings plan. Save as much as you can through your 401(k) or 403(b) plan. Even
if you can’t afford to contribute the maximum, set aside enough to qualify for your company match.
Make a plan. Use online financial planning calculators and tools, such as Fidelity’s myPlansm Snapshot1 and
myPlan Retirement Quick Check2, to create a retirement savings plan. Through them, you can help identify your
retirement goal and create a retirement savings plan in as little as 30 minutes.
Consider an IRA. Think about opening an IRA to save even more. For many, a Roth IRA, which allows your
contributions to grow tax-free if certain conditions are met, may be a great option. Programs with no fees3, easy
account opening and monthly automatic savings options, like Fidelity’s SimpleStartsm IRA, are designed to help you
easily get started with IRA investing.
Automate. Consider an automatic monthly investing program for your IRA or workplace savings plan to make sure
you stay on track, maximize potential earnings and don’t miss contribution deadlines. Lifecycle funds, like Fidelity
Freedom Funds,®4 base their asset allocation on a target retirement date and can also be a great option for those who
want to “set it, and forget it.”
Consolidate Assets. Consider consolidating any workplace retirement plans or rollover IRAs from previous
employers into one Rollover IRA. This will help you see your complete “financial picture.”
40-somethings: Closing the Gap
Those in their 40s may be balancing multiple financial priorities such as investing for retirement, funding their children’s
college savings and paying off mortgage debt.
Monitor your plan. Now that you have a plan, you should revisit it periodically to ensure that you are on track to meet
your savings goals. Portfolio assessment tools, like Fidelity’s Portfolio Review tool, can help. If your provider offers
alerts, you may also want to sign up for one that will notify you automatically if you get too far off track of your target
Apply tax-advantaged strategies. Investors in their peak savings years should make retirement a priority by
maximizing tax-advantaged savings opportunities. Each year, revisit your asset allocation to ensure you are
appropriately diversified, and consider applying tax sensitive investing strategies.
Max out. Contribute as much as possible to your IRA & workplace savings plan – maxing out if you can. For 2008,
IRA and workplace savings plan limits are $5,000 & $15,500 respectively. Skipping just one year’s IRA contribution could
mean missing out on tens of thousands of dollars in potential earnings at retirement time.
Consolidate. Just as you would in your 30s, consider consolidating any retirement plans from previous employers,
and rollover IRAs, so that you can more easily see and monitor your “big financial picture.”
Leverage professional management. Many employers/providers offer money management services for those who
do not have the time, or inclination, to manage their own portfolio. Consider taking advantage of the opportunity to have
a professional team design a portfolio for your specific retirement savings needs and manage it on your behalf.
50-somethings: The Sandwich Years
Those in their 50s are justifiably concerned about rising healthcare costs and saving enough for a comfortable retirement.
They may also be faced with paying college tuition bills and caring for aging parents at the same time.
Catch up. Your 50s are a prime time to “catch up” on tax-advantaged savings. Both workplace savings plans and
IRAs allow workers aged 50 and over to contribute an extra $5,000 and $1,000 respectively to “catch-up” on savings.
Check in. Revisit your goals for retirement and make sure you’re on track to fund it. As a starting point for your
planning, consider aiming to replace 85 percent of your pre-retirement income in retirement. Over time you may refine
your needs to replace more or less income.
Learn the system. When you start collecting Social Security and how long you live affect how much you receive. For
some, it may be better to start collecting earlier while others may want to wait a few years to maximize benefit payments.
Create your income plan. With year-end statements and tax forms coming in, now is a great time to meet with a
trusted broker or advisor5, or use an online planning tool, such as Fidelity’s Retirement Income Planner6, to create a
detailed retirement income plan to help ensure your retirement income will last.
Adjust your allocation. As retirement comes into view, consider increasing your allocation to fixed income.
Pre-retirees ages 60-64: Preparing for the Transition
Those in their early 60s are nearing retirement and focused on making the transition from saving to living in
retirement. They are beginning to think about when to take Social Security and how they will pay for the rising cost of
health care while in retirement, which Fidelity estimates could be $215,000 for a healthy 65-year-old couple.7
Learn your options. Educate yourself on retirement product and services options that can help you make the
most of your savings. New products, such as the Fidelity Income Replacement Funds8 for discretionary
expenses or specific time frames, and low-cost annuities9 like the Fidelity Growth and Guaranteed Incomesm
annuity10 for a guaranteed income stream in retirement can help you provide a “paycheck” for your retirement.
Rebalance your portfolio. American workers near retirement who are still investing in a workplace savings
plan or IRA should consider maintaining a portfolio that includes a significant portion of equities (often 50% to
70% but will vary depending on personal preference and risk tolerance) to promote potential future growth as
they make the transition to retirement.
Learn the laws. Make sure you are aware of the Federal tax and distribution guidelines, such as minimum
required distributions, that apply to your retirement accounts. If you need help, consider contacting a financial
representative or working with an advisor.
Make the transition. You’re ready to officially make the transition into retirement. You’ve identified your
goals, saved, familiarized yourself with the steps to take to move from saving, into paying yourself in retirement --
and you have your detailed income plan. Now you just have to implement it. Your employer, your financial
representative and/or advisor are all excellent resources as you enter this exciting next step in your life.
Before investing, consider the investment objectives, risks, charges, and expenses of the fund and/or annuity and its
investment options. Call or write to Fidelity or visit Fidelity.com for a free prospectus containing this information.
Read it carefully.
1myPlansm Snapshot is an educational calculator offered to use by Fidelity Brokerage Services, LLC, Member NYSE, SIPC, a broker
dealer offering retail brokerage and insurance products and services or Fidelity Investments Institutional Services Company,
Inc., a broker dealer offering institutional products and services.
myPlansm Retirement Quick Check and Portfolio Review are educational tools developed by Strategic Advisers, Inc., a registered
investment adviser and a Fidelity Investments company, and offered for use by Fidelity Brokerage Services LLC, member
3There is no brokerage account fee on Fidelity's Traditional, Roth, SEP, and Rollover IRAs. Fund expenses and brokerage
commissions still apply. Depending on your situation, fees may include low-balance fees, short-term trading fees and
account closing fees.
4Performance of the Freedom Funds depends on that of their underlying Fidelity funds. These funds are subject to the volatility of
the financial markets in the U.S. and abroad and may be subject to the additional risks associated with investing in high
yield, small cap and foreign securities. Fidelity Freedom Funds are managed by Strategic Advisers, Inc., a subsidiary of
5The term "advisor" includes, but is not necessarily limited to, financial professionals including brokers, financial
representatives, etc. and does not infer or imply any specific certification, licensing or registration in connection
with the usage of this term.
6Retirement Income Planner is an educational tool developed and offered for use by Strategic Advisers, Inc., a registered
investment adviser and Fidelity Investments company.
7Fidelity Consulting, 2007. Assumes 65-year-old couple retired in 2007 with no employer-provided retiree health care coverage and
life expectancies of 17 years for a male and 20 years for a female.
8Performance of the Fidelity Income Replacement Funds depends on that of their underlying Fidelity funds. These funds are subject
to the volatility of the financial markets in the U.S. and abroad and may be subject to the additional risks associated with
investing in high yield, small cap and foreign securities. Please note, the Fidelity Income Replacement Funds and the Smart
Payment Program may not be appropriate for all investors. Investors who own a Fidelity Income Replacement Fund within a
tax-advantaged retirement account and who elect to participate in the Smart Payment Program should consult with their tax
advisers to discuss tax consequences that could result if payments are distributed from their core account prior to age 59 1/2
or they plan to use the Smart Payment Program, in whole or in part, to meet their annual minimum required distribution. You
should consult a financial adviser or Fidelity representative to determine whether a Fidelity Income Replacement Fund is
right for you.
According to Morningstar, Inc., Fidelity Growth and Guaranteed Income's (FGGI's) annual annuity charge of 1.25% for joint lives is
approximately 40% lower than the industry average annual annuity charge of 2.05% for deferred variable annuities offering
guaranteed withdrawal benefits for life as of 5/31/07. FGGI does not have a guaranteed minimum death benefit whereas the
industry average annuity may.
In New York, Growth and Guaranteed Incomesm
Principal value and investment returns of a variable annuity will fluctuate and you may have a gain or loss when
money is withdrawn.
Guaranteed lifetime income is subject to the claims-paying ability of the issuing insurance company.
Fidelity Growth and Guaranteed Income (Policy Form No. DVA-GWB-2007, et al.) is issued by Fidelity
Investments Life Insurance Company. Growth and Guaranteed Income (Policy Form No. EDVA-GWB-2007, et
al.) is issued by Empire Fidelity Investments Life Insurance Company,® New York, NY. Fidelity Brokerage
Services, Member NYSE, SIPC, and Fidelity Insurance Agency, Inc., are the distributors.
Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of $3.4 trillion, including
managed assets of $1.6 trillion as of December 31, 2007. Fidelity offers investment management, retirement planning,
brokerage, and human resources and benefits outsourcing services to 24 million individuals and institutions as well as
through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1
provider of workplace retirement savings plans, the largest mutual fund supermarket and a leading online brokerage firm. For
more information about Fidelity Investments, visit http://www.fidelity.com
Fidelity Brokerage Services, Member NYSE/SIPC, 100 Summer Street, Boston, MA 02110
National Financial Services, Member NYSE/SIPC, 200 Liberty Street, NY4F, New York, NY 10281