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Plan Well, Retire Well

Saving and investing your money

America Saves: Automatically

What does your morning routine look like? Mine goes like this: let the cat out, pick up the morning newspaper, turn out the porch light, start the coffee pot. No thought involved -- it's all automatic!

Research shows that many people who save and invest effectively do so because their money management is also automatic. For example, one relatively painless way to save is to automate your savings plan. To do this, simply have your bank or brokerage company take money directly out of your checking account or paycheck and place it into a savings or investment account. For more savings ideas, check out the advice of the America Saves program's e-wealth coaches:

Once you are saving automatically, the next step is to consider increasing your rate of saving and investing regularly. Can you increase your savings rate by 1% each year? With compound interest, saving just 1% more of your pay ($400 on a $40,000 income) annually can provide tens of thousands of dollars more for retirement. If you're 25, 35, and 45 and earn $40,000, you'd have $164,523; $66,623; and $24,436, respectively, by saving 1% more, assuming an 8% average annual return. The more time you have to save, the more money you'll have. Become an American Saver (it's free and motivational) at, and will help you make your saving automatic.

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