1. Save More to Improve Your Retirement Outlook.
[Note to financial professional: Please refer to slide.]
Save More to Improve Your Retirement Outlook.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
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2. Show the outline of the United States
Show the outline of the United States. Label New York City and Los Angeles on map. Show a dotted line representing the flight pattern between NY and LA.
How many of you have recently taken a flight somewhere?
Today, you can board an airplane in New York and be in Los Angeles in less than six hours. And while it’s become commonplace for us, it’s incredible to think that in those few short hours you’re traveling over 2,000 miles.
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3. Show the same map. Show a second dotted line that is one degree off course that arrives 40 miles from LA.
We may take this convenience for granted, but a great deal of precision is actually required for us to arrive at the Los Angeles airport.
Did you know that if the pilot is off-course by just a single degree, the plane would miss its original destination by more than 40 miles?
A single degree! An almost imperceptible shift in the near term could cause a big difference in the eventual outcome.
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4. Small Changes Matter
(Insert visual representation of 1 degree on a compass icon or pie or something.)
The fact is, in many areas of life, slight course adjustments made early on can have a big impact on where you end up.
Saving for retirement is no different. Making small changes in the amount you’re saving for retirement today can have a big impact on where you end up down the road.
[Note to financial professional: Refer to infographic on slide.]
Look at the difference between saving $200 and $300 per month, when it is done consistently for years, and earnings are compounding.
Assumes an 8% average annual return compounded monthly and a 4% annual withdrawal rate after the accumulation period. For illustrative purposes only. Actual results may vary. Additional information about hypothetical examples disclosed later in presentation.
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5. Bridge the Gap What we know
<Insert icon of a man in motion, something signifying action>
<Insert icon of a brain>
Most financial experts recommend saving 10% to 15% of your annual pay for retirement.
But understanding the long-term benefits of saving more today does little for us unless we actually do it! Bridging the “action gap,” or the gap between what we know and what we do is essential to our success.
What do we know about saving for retirement?
On the last slide, you saw how saving more each month could pay off over the long term. You may have also heard many financial experts recommend that we save about 10% to 15% of our pay for retirement.
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6. Bridge the Gap What we know What we do
Most financial experts recommend saving 10% to 15% of your annual pay for retirement.
The average U.S. employee is saving 6.8% of their annual income for retirement.
* PSCA’s 59th Annual Survey of Profit Sharing and 401(k) Plans, 2016
But how much are most people setting aside? A recent study conducted by PSCA, an association of employer-sponsored retirement plans, found that the average U.S. employee is saving 6.8% of their annual income for retirement.
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7. Bridge the Gap What we know What we do
Most financial experts recommend saving 10% to 15% of your annual pay for retirement.
The average U.S. employee is saving 6.8% of their annual income for retirement.
* PSCA’s 59th Annual Survey of Profit Sharing and 401(k) Plans, 2016
And this is happening despite the fact that many of don't feel confident about retirement.
In fact, one study conducted in 2015 found that 80% of respondents who don't feel confident about retirement say the top reason is that they haven’t saved enough.
Why aren’t we saving as much as we know we should? It could be because, as author Jason Zweig points out in his book Your Money and the Brain, “The pleasure of getting something good today is much greater than the pleasure of getting something good years in the future.”
We need to overcome this “action gap” to prepare ourselves for the future. So, how do we find ways to make saving for retirement a priority?
Yet 80% of respondents to a recent survey who don't feel confident about retirement say they haven't saved enough.
* State Street Global Advisors Retirement Survey, 2015
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8. Bridge the Gap Future self Current self Future self
Many of the actions we take today are influenced by the way we think of our future selves.
Here’s an interesting study: Researchers have found that some people think about their future self much differently than they do their current self — even viewing their future self like an entirely different person. Those who view their future self in this way are less likely to do things like floss, eat healthy or save for retirement.
Future self
Current self
Future self
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9. Bridge the Gap
On each side of slide, have an icon of a person above the corresponding label.
If you have more of a connection with your future self, you’ll probably be more likely to take action today to benefit yourself in the future.
What if you challenged yourself to think a little more about your future needs? Visualize yourself years from now, entering into your golden years. Think of the lifestyle you’d like to have and what steps you can take now to make it a reality.
Current self
Future self
Current self
Future self
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10. “The ability to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite for success.” – Brian Tracy, Motivational speaker
Caring for the needs of our future self almost always requires us to delay gratification.
[Note to financial professional: Read quote on slide.]
When it comes to your retirement savings, are you willing to “delay gratification” by spending less and saving a little more now to provide a better retirement for yourself? What current expense could you eliminate to improve life for your “future self”?
This one principle is going to be fundamental to your success.
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11. Find Ways to Save More for Retirement
Pay yourself first.
Most of us might admit that we could probably save a little more. When managing your personal finances, let’s talk about a few ways that you can free up more cash for saving:
The first thing that you can do is “pay yourself first.” Consider your retirement saving needs as an essential part of your monthly budget along with your other primary living expenses. There are always going to be a lot of competing demands on your budget. Make saving for retirement a priority so it isn’t overlooked.
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12. Find Ways to Save More for Retirement
Give yourself a raise.
How many of you have experienced getting a pay raise, only to adjust to your new pay level shortly thereafter – spending all that comes in, and not knowing where the extra money went?
Next time you get a pay increase, give a portion of it to yourself in the form of a larger contribution to your retirement account.
If you used some or all of this additional income to increase your rate of saving, it could pay off in the long term.
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13. Find Ways to Save More for Retirement
Eliminate unnecessary expenses.
Belong to a gym you never go to? Pay for premium cable channels you don’t watch? Eliminating these expenses may not change your life that much. But doing so could free up some cash and help you save more.
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14. Find Ways to Save More for Retirement
Get out of debt.
Insert image of a proud person with their arms folded or something like that in a home environment (Something like Thinkstock # ).
Debt. It sure can eat up a lot of your salary, can’t it? It doesn’t have to.
Paying off credit cards or car loans can reduce your monthly payments and free up more money to save.
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15. Find Ways to Save More for Retirement
Create a budget.
Insert image of a proud person with their arms folded or something like that in a home environment (Something like Thinkstock # ).
One of the most basic and time-tested methods of succeeding financially is through budgeting. If you develop a plan for how to allocate your income and then follow it, you’ll be more effective at planning for the future.
Auditing your bills can help you see if you’re paying too much, too. Talk to your wireless provider, cable company and others to see if you’re on the best plan. Bundling services can also net a discount of up to several hundred dollars a year.
Online tools can simplify budgeting and help you see areas where you can cut costs and then save that same amount instead.
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16. Save More Through Your Plan’s Tax Benefits.
Saving $200/Mo
Saving $300/Mo
Gross Pay
Contribution
Taxable Income
Taxes*
Take-Home Pay
$3,000/mo
200
2,800
700
2,100
$3,000/mo
300
2,700
675
2,025
If you’re worried that saving more will greatly impact your take-home pay, you may be in for a pleasant surprise, thanks to the benefit of tax-deferred savings. Let’s take a look at an example.
[Note to financial professional: Refer to table in slide.] In this example, a $100 increase in monthly contributions would reduce your take-home pay by only $75. This is because when you contribute on a pre-tax basis, your contributions are taken out before taxes are calculated. Of course, taxes will be owed when you withdraw your savings, but you benefit today from a reduction in your current taxable income.
[Note to financial professional: Read the following point if the retirement plan offers Roth elective deferrals.] Additionally, your plan offers the option of making Roth after-tax contributions. When you contribute to your plan on a Roth after-tax basis, your current taxable income is not reduced, but you’re able to take generally tax-free withdrawals from your account at retirement. Everyone’s situation is different, so you’ll want to consider your own personal circumstances before determining which contribution method is most appropriate for you.
Increasing contributions by $100 reduces today’s take-home pay by $75
Assumes a cumulative tax rate of 25% and that contributions are made on a pretax basis.
Withdrawals of pretax contributions are taxable, and may include a 10% penalty if taken
before age 59½.
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17. Insert infographic from Page 4 of brochure.
Regularly Increase Your Contributions
Insert infographic from Page 4 of brochure.
Once you’ve applied some of the tips we’ve discussed today, chances are you’ll find ways to increase your current savings level — but that’s not the end. As you advance in your career, you should continue to look for ways to increase your level of savings regularly.
[Note to financial professional: Refer to slide.]
A 1% increase in your savings probably won’t feel like a dramatic change — in fact, you may not even notice it. What if you committed to increase your savings by 1% per year until you reached 10% to 15% of your pay? These subtle changes – like the airplane changing course by a single degree — can have a big impact on where you end up in retirement. Just look at the difference it made in this example.
These two individuals started saving the same exact amount, and they earned the same salary throughout their careers. The only difference is that the person on the right increased the percentage she saved by 1% each year until she reached 12%, whereas the other person contributed the same percentage of pay all the way to retirement. The end result: the woman who regularly increased her contributions ended up with more than twice the amount per month in retirement.
Set it and forget it
Start: 4% of pay
Strategy: Save the same percentage of pay until retirement.
Set it and increase it
Start: 4% of pay
Strategy: Increase your contribution percentage by 1% each year until it reaches 12%.
Retirement withdrawals
$5,234/mo
Retirement withdrawals
$2,097/mo
Assumes a starting salary of $43,000, an annual pay increase of 2%, an 8% average annual return compounded monthly and an annual withdrawal rate of 4% after a 40 year accumulation period. Additional information about hypothetical examples disclosed later in presentation.
© 2017 American Funds Distributors, Inc.

18. Calculate Success
Trying to calculate the amount that you should save is a lot better than just guessing.
If you want help planning for retirement, there are some great resources online. For example, you can access this retirement planning calculator through your plan’s participant website, which will help you assess whether or not you’re on track to meet your retirement goals.
Feel free to contact me for additional help or if you’d like assistance reviewing your overall financial picture.
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19. “You cannot change your destination overnight, but you can change your direction overnight.”
– Jim Rohn, Business author/speaker
[Note to financial professional: Read quote.]
Resolve now to improve your retirement outlook. Find ways to save more — even if it doesn’t seem like much. The choices you make today will affect your long-term outcome!
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20. American Funds Is a Key Provider for Your Retirement Plan.
Since 1931, American Funds has invested with a long-
term focus and attention to risk.
Nearly half of the 55 million investor accounts
in the American Funds are retirement accounts.
Your employer has selected a key provider for your retirement plan — American Funds from Capital Group.
There are 55 million investor accounts in the American Funds, and nearly half of those are retirement accounts.
Since 1931, American Funds has invested with a long-term focus and attention to risk — both are key to effective retirement planning.
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21. Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
All hypothetical examples assume an 8% average annual return compounded monthly and a 4% annual withdrawal rate after the accumulation period. These are point-in-time views and as such do not take into account any growth or loss during retirement. Without investment growth/loss during retirement, a 4% annual withdrawal rate would deplete retirement savings in 25 years. Examples are for illustrative purposes only and do not reflect the results of any particular investment, which may differ, or taxes that may be owed on tax-deferred contributions, including the 10% penalty for withdrawals taken before age 59½. Regular investing does not ensure a profit or protect against loss in a declining market.
[Note to financial professional: Refer to slide. Give your audience time to read important disclosure.]
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22. For financial professionals only. Not for use with the public.
[Note to financial professional: Thank audience for attending and let them know how to get in touch with you if they need further assistance.]
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For financial professionals only. Not for use with the public.