Playing Catch-Up With Your Retirement Savings

The last year may have left you feeling like Lasse Viren. Who’s that, you ask? Lasse Viren may be the greatest comeback story in sports history. Viren, a 23-year old small-town, Finnish police officer, made his Olympic debut in the 1972 Munich Olympics. In his final heat, he stumbled and fell just before the halfway mark. Victory seemed out of the question; in fact, another runner who fell with Viren quit the race with no hopes of placing.

You may be feeling like the Lasse Viren of investing, especially if you’re getting closer to retirement. In the past year, we’ve experienced the worst market conditions since the Great Depression, and you’re wondering if retiring on your terms is even possible. You’re not alone. The good news is that there’s still hope of finishing with a decent retirement account, but it may take some work and some sacrifice.

If you need to play “catch-up,” here are some suggestions on what steps to take:

1. Save more now. It may seem obvious, but sacrificing now can help you recover at least some of your losses. Did you know that at age 55, if you put aside an additional $250 each pay period, you’ll have nearly $100,000 more when you’re 65? For many of us, that’s giving up a vacation a year. If you’re 40 and you put aside an additional $50 each pay period, you’ll have nearly $100,000 more when you’re 65. That’s the equivalent of giving up a gourmet coffee or a fast food meal each day.

2. Max out with the tools that are available. If you’re playing catch-up, consider using a Roth IRA as part of the strategy. Like the Traditional IRA, a Roth IRA is a great supplement to an individual's retirement income. Unlike the Traditional IRA, where earnings accrue on a tax-deferred basis, the Roth IRA accrues earnings on a tax-free basis. That means you won’t pay taxes on your earnings when you start using it for retirement income.2

3. Use catch-up provisions. The old adage, "better late than never," applies to saving. In fact, there are special provisions for individuals who have reached a certain age to play "catch-up" by contributing amounts in excess of the limit that applies to others. For your 403(b) account you’re permitted to defer $16,500 per year, but if you’re at least age 50 by the end of the year, you may defer an additional $5,500 annually.

4. Get a good financial “coach.” Retirement planning is so important to our future well-being, but very few of us feel confident going it alone. The good news is there are excellent financial coaches out there. As an NEA member, you have access to NEA Valuebuilder representatives. These highly trained professionals will help you craft or fine-tune a plan that addresses your savings challenge, including how much you need to save and which investments are best for you.

The last year has not been kind to many of our retirement accounts, and making up lost ground may feel like a daunting task. It may not be easy, but keep saving according to your plan.

We need finish our Finnish runner story. After he fell, Viren calmly got to his feet and chased his way back into contention, overtaking Britain's David Bedford, the long-time leader, to not only win the gold medal, but set a world record of 27minutes, 38.4 sec. Ten days later, he also won the 5,000m in an Olympic record time.

Like Viren, don’t give up.

For more information on how to catch up or to contact an NEA Valuebuilder representative, call 1-800-NEA-VALU (632-8258). Start saving today!

You should carefully consider the investment objectives, risks, and charges and expenses of the mutual funds and variable annuities available under the NEA Valuebuilder Program before investing. You may obtain prospectuses that contain this and other information about the mutual funds and variable annuities by calling our National Service Center at 1-800-888-2461. You should read the prospectus carefully before investing. Investing in variable annuities and mutual funds involves risk and there is no guarantee of investment results.

The National Education Association of the United States (“NEA”) established the NEA Valuebuilder Program to encourage its members to save for retirement. Security Distributors, Inc. and certain of its affiliates (collectively referred to herein as “Security Benefit”) make available retirement plan products under the NEA Valuebuilder Program pursuant to an agreement with NEA’s wholly-owned subsidiary, NEA’s Member Benefits Corporation (“MBC”). Security Benefit pays an annual fee for services to MBC under the agreement. NEA and MBC are not affiliated with Security Benefit. Neither NEA nor MBC is a registered broker/dealer. All securities brokerage services are performed exclusively by your sales representative’s broker/dealer and not by NEA or MBC.

The NEA Valuebuilder Variable Annuity TSA, Contract Form No. V6029, also includes a Fixed Account. The NEA Valuebuilder Variable Annuity TSA is distributed by Security Distributors, Inc. and is issued by Security Benefit Life Insurance Company. The NEA Valuebuilder 403(b)(7) is a Custodial Account under §403(b)(7) of the Internal Revenue Code. The NEA Valuebuilder Mutual Fund 457 is a Trust Account under §457 of the Internal Revenue Code. The NEA Valuebuilder IRA is an IRA Custodial Account under §408(a) of the Internal Revenue Code.

Securities are distributed by Security Distributors, Inc., a subsidiary of Security Benefit Corporation (“Security Benefit”).

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