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Saving for Retirement with a 401(k) Is the Marathon You Can Win

By Stuart Robertson

Running a marathon can seem daunting. And it’s something that so many of us may believe we could never do—or even want to do. Investing for the long term (building enough for retirement saving) can actually feel the same way. They both take time, require regular, ongoing commitment, and over time, they both can enable you to cover a long distance to achieve something special. The great news is that building for retirement with a 401(k) can be a heck of lot easier than training for a marathon—you can do it!

Congrats to Richard—A Newly Minted Marathoner
Richard, one of our ShareBuilder 401k teammates, recently trained and completed the Seattle Marathon. It was his first one, he hadn’t been a “runner” and decided he needed a challenge to up his fitness.Richard running a Marathon He started with focusing on doing a half marathon—a full marathon wasn’t something he was even considering. Richard began like a lot of other non-runners who take on this challenge—he did a little research and jumped right in to training. He discovered that once he could run 3 or 4 miles, he could follow the recommended 10-week training program. The program required some speed work, short tempo runs of 3-6 miles, and a long run on the weekend that starts at 6 miles and builds to 12 miles. And in June, he completed his first half marathon, which then inspired him to take on a whole marathon. On December 1st, all that training paid off for Richard when he crossed the marathon finish line.

Building a Nest Egg for the Long-Term Can Be a Whole Lot Easier
In some ways, saving a meaningful nest egg for retirement with a 401(k) can be a lot easier than the hard physical and mental toll of preparing for a 26.2 mile run. The “training” is much simpler:

  1. Contributing to a 401(k) is automatic with each payroll. Just choose the amount to defer and which investment(s) and you’re off and running.
  2. Most experts agree you’ll need to put away 10%-15%* of your earnings over a career to retire at the lifestyle you currently live. Like doing that first, long training run, saving this much at first might be tough. But if saving this much at first doesn’t work with your budget, just start at a lower percent of salary, get your employer match if they offer, and then each pay raise increase the percent you give to your 401(k) until you’re at a good level.
  3. Picking investments (the strength training techniques if you will) may be confusing at first. If you’re not sure which funds to select, choose a model portfolio or target date fund that best describes your appetite for risk and the time horizon until you plan to use the money.
  4. Do a little research on investing and check in once or twice a year on the investments you’ve selected to see if these continue to match where you are in life now.
  5. Enjoy the immediate personal tax benefits by contributing to your 401(k) each paycheck, and the confidence you are building your financial health automatically and keep at it!

You Can Do It!
As Richard will tell you, your first goal is to finish the marathon, and then the second goal is the time it takes you to actually finish the race. Retirement saving is similar. The first goal is contributing regularly so you have a nest egg that matters, and the second is getting on track to save the amount you hope to reach at retirement.

Remember, saving for retirement truly is a marathon, but it is not a race. Save smart, steady and know that you can do it!

*Industry experts generally agree that, depending on when you begin contributing, a minimum contribution of 10-15% over a 30- to 40-year career, will be necessary to reach a goal of 8 to 10 times your ending annual salary prior to retirement. You may want to review your current contribution level to determine whether you believe it is sufficient to meet your retirement goals. There is no guarantee that contributions at this level will result in sufficient funds to meet those goals.


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