SETTING SAIL SHIFTING DIRECTION: DEBRA’S STORY “I WANT Like many “Gen Xers”, Debra, TO SAVE a 45-year-old aviation journeyman, has been steadily striving to achieve MORE FOR A 昀椀nancial security. While Debra has remained COMFORTABLE gainfully employed over the years, the burst of RETIREMENT.” the dot.com bubble and the Great Recession in the early 2000s resulted in periods of lagging salary increases and limited opportunities for as paying your future self, 昀椀rst! Making pre-tax promotion. A participant in the IAM National contributions to the 401(k) Fund could lower Pension Fund, Debra is looking forward to col- Debra’s taxable income and allow her to take lecting a retirement bene昀椀t after 25 years of advantage of compounding interest. Generally, service but knows that her monthly bene昀椀t will “compound interest” allows your retirement not be enough for her to maintain her current savings to grow faster because, for each year standard of living in retirement. With mount- that your contributions are invested in the ing student loans and credit card debt, plus 401(k) Fund, you can earn additional interest saving for a daughter off to college in a year, on any interest earned in the previous year. As Debra is searching for a way to continue to meet a result, the interest continues to compound her current living expenses without sacri昀椀cing each year. If Debra elects to have a percentage her retirement savings goals. With 20 years or of her pay automatically deducted and deferred more to go, now is the perfect time for Debra to into the 401(k) Fund today and continues to make slight adjustments to her retirement sav- make small percentage increases annually, her * ings plan to ensure her personal savings goals investment elections plus compounding inter- keep pace throughout her retirement journey. est, subject to earnings and losses, over the next 20 years could allow Debra to comfortably save The IAM National 401(k) Fund is a valuable per- tens of thousands of dollars more toward her The savings goal for a sonal savings tool that can be used as a primary retirement savings goals without signi昀椀cantly comfortable retirement retirement savings vehicle or as a supplement impacting her current quality of life. increased by 10% in 2021 to a retirement bene昀椀t under the Pension Fund. to $1.04 million. https://www.annuity.org/ Debra may elect to have a percentage of her compensation automatically deducted from In 2021, only 45% of non-retirees her paycheck and contributed to the 401(k) between the ages of 45-59 Fund before federal income taxes are with- believed their retirement savings were on track. held. We think of these automatic deductions *Past performance is no guarantee of future results. https://www.federalreserve.gov/ 04 JOURNEY TO RETIREMENT OCTOBER 2022