Basics of Enrolling in a
Retirement Plan

Starting your career? Here are answers to some questions you may have about saving for retirement.

A woman working outside on her laptop

Finding your professional and financial footing once you begin your career is a process with many moving parts. Whether you’ve just finished college or graduate school, you may be wondering how it’s possible to save for the future when there are so many more immediate concerns—from rent to groceries and healthcare—that require spending money. Here are answers to some questions that can help as you look to the future.

Should I wait until I’m financially ready to contribute to a retirement plan?
Assuming your employer offers a retirement plan, and you’re eligible to enroll and contribute, then you probably are financially ready. The earlier you start saving, the more time your savings have to grow. For example, a 25-year-old with no prior retirement savings who earns a salary of $35,000 and contributes 6% annually to their workplace retirement plan ($2,100 a year, or less than $100 per paycheck) could have $335,469 at age 65, assuming a 6% annual rate of return. But if that 25-year-old waited until age 30 to begin contributing, they would have $241,551—almost $100,000 less in retirement savings—at age 65.

A graphic is used to illustrate the value of saving earlier rather than later. It shows the value of a 6% annual savings contribution starting at age 25 to be $335,469 at age 65 versus just $241,551 starting at age 30. The illustration assumes an annual salary of $35,000, a beginning balance of $0, an annual retirement plan contribution of 6% ($2,100) and no increase in earnings; 2) What are some retirement plan benefits? Answer: An employee-sponsored retirement plan is a great way to build future savings, and the quicker you start the better because of the power of compounding interest; 3) How much should you contribute to a retirement plan? Answer: Contribute as much as you’re able up to the annual limits and take advantage of any employer match. To learn more about your retirement plan, contacting your local Mutual of America representative is encouraged.

This hypothetical example is for illustrative purposes only and does not represent any actual investment performance, price or yield. 
This illustration assumes an annual salary of $35,000, a beginning balance of $0, an annual retirement plan contribution of 6% ($2,100) and no increase in earnings. 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. All investments involve risks, including possible loss of principal.

What are some benefits of a retirement plan?
An employer-sponsored retirement plan is a great way to build savings for your future. Not only can you make contributions through automatic payroll deduction, some employers will even match their employees’ contributions up to a certain amount (see below), and earnings on your contributions are not immediately taxed.* Plus, the quicker you get started, the better. Through the power of compounding, regularly contributing to your retirement savings for as long as you can gives you the best chance to meet your retirement objectives.

How much should I contribute to a retirement plan?
Once you enroll in a retirement plan, contribute as much as you’re able up to the annual limits. If your retirement plan offers an employer match, take advantage of it. This means your employer will match a certain percentage of whatever you contribute, up to a specific level. If you need to start off with smaller contributions, you can always gradually increase the percentage you contribute. Even a 1% annual increase can make a difference over time.

To learn more about your retirement plan, contact your local Mutual of America representative today.

*If contributions are made on a pretax basis, withdrawals are subject to income tax at your ordinary income tax rate at the time of withdrawal and, if made prior to age 59½, may be subject to a 10% federal tax penalty. If contributions are made on an after-tax basis to a designated Roth account, qualified distributions are tax-free. 

Better your tomorrow.

Contact your Mutual of America representative today.

You should consider the investment objectives, risks, and charges and expenses of the investment funds and, if applicable, the variable annuity contract, carefully before investing. This and other information is contained in the funds’ prospectuses and summary prospectuses and the contract prospectus or brochure, if applicable, which can be obtained by calling 800.468.3785 or visiting Read them carefully before investing.


The articles and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual. Consult your attorney, accountant or financial or tax adviser with regard to your individual situation.