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When it comes to planning for retirement, the more you save today, the better prepared you’ll be tomorrow. That’s why we are sharing five easy steps to take right now that could make all the difference in reaching your goals.

  1. Maximize your annual IRA contributions. For 2013, the maximum amount you can contribute to a Traditional IRA or a Roth IRA is $5,500. Individuals ages 50 and older can make an additional catch-up contribution of $1,000—for a total contribution of $6,500.
  2. Invest on a regular basis. Making regular monthly contributions to a brokerage account or a 401(k) can add up over time. A $250 monthly contribution could potentially grow to $127,6011 after 20 years, assuming an average annual rate of return of 7 percent.
  3. Set up automatic investments. Establishing a periodic investment plan1 is easy to do and helps put your retirement savings on autopilot. Set up direct deposit to put a portion of your paycheck into your IRA.
  4. Consolidate IRAs. If you have multiple IRAs at several financial institutions, consider transferring them into a single account. You’ll have a more complete look at your financial picture, and it will be easier to manage those assets. You’ll also reduce the number of statements and tax forms you receive, and potentially reduce fees.
  5. Roll over 401(k) accounts from former employers. If you’ve changed jobs or plan to retire, why leave your 401(k) plan behind? Although there may be good reasons for keeping an old 401(k) plan intact, moving it to a Rollover IRA has its advantages. For one, you’ll have better control over the management of those assets and more flexibility to access those dollars.

1 Periodic investment plans and dollar cost averaging do not assure a profit or protect against losses in declining markets. Such plans involve continuous investment regardless of market conditions. Markets will fluctuate, and clients must consider their ability to continue investing during periods of low price levels. The above hypothetical example illustrates the potential value of regular monthly investments and assumes an average annual rate of return of 7 percent. The end value doesn’t reflect taxes or fees. Earnings and pretax contributions from Traditional IRAs are subject to taxes when withdrawn. IRA distributions taken before age 59½ may also be subject to a 10-percent penalty. Earnings distributed from Roth IRAs are free from income tax, provided certain requirements are met.

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