Page 3 - SGH Profit Sharing & 401(k) Plan and Trust

Start Early. It’s Important. The Power of Compounding. Although it is never too late to start saving for retirement, starting early is one of the best ways to help build savings over time through potential compounding of investment earnings. TIME IS MONEY Jennifer and Brian are the same age. Suppose Jennifer started saving $2,000 a year from age 25 through 35, and then stopped saving. Her friend Brian started saving $2,000 a year at age 35 and continued until he was age 65. If both accounts earn 8% annually, at age 65, Jennifer might have $321,000 in her account, but she would have contributed only $20,000. Brian, who started saving at age 35 and contributed $60,000, might only have $239,000. Brian Jennifer Pre-Tax Contributions Potential Earnings $0 $100,000 $200,000 $300,000 $400,000 Hypothetical examples are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing involves risk including loss of principal. The balances shown represent the amount contributed and the interest compounded annually. The examples assume a hypothetical average rate of return of 8%, reinvestment of dividends and capital gains, and no current taxes paid on earnings in a retirement plan account. Schwab Retirement Plan Services, Inc. does not provide tax or legal advice. Through the power of potential compounding of investment earnings over time, your contributions and any earnings are reinvested and may continue to grow. The longer you invest, the more you may earn through compounding. YOUR OPPORTUNITY IS NOW. THE EARLIER YOU START, THE LONGER YOUR MONEY MAY HAVE TO WORK FOR YOU.