Investing for retirement

If you want to be ready for retirement, you need to know a little about investing or, at a minimum, how to find the right knowledge and advice.

The content in this section is intended for educational purposes only. Our goal is to outline some of the most important things for you to consider when investing for retirement, but you should contact a retirement planning professional if you need more guidance.

When you first get started with investing, a great exercise is to create an investment strategy. You can do this on your own, or you can get help from a professional.

Before you get started, there are a few key concepts you need to understand. This checklist will help you get started:

1. Build a financial plan. Start with a comprehensive financial plan that outlines your goals and milestones. These objectives can range from buying a home, funding your children's education, building an emergency fund, supporting a business venture, to ensuring a comfortable retirement.
   Start planning
2. Make saving a priority. Set aside a portion of your paycheck. Utilize employer-sponsored savings plans like a 401(k) and consider other automatic saving options. Budget wisely and track expenses.
   Explore saving strategies
3. Understand the power of compounding. Harness the power of compounding by saving and investing regularly, starting as early as possible. Even in a low-interest environment, compounding remains crucial for wealth building.
   See the benefits of compounding
4. Keep costs low. You cannot control the future returns on your investments, but you can control the costs. You should consider fees along with other factors in making your investment selections.
   Learn about costs
5. Understand risk. Determine your risk tolerance as a crucial step in your planning process. Assess how much potential loss you can handle and how comfortable you are with ongoing price fluctuations in your investments.
   Learn about risk
6. Know when to seek expert advice. The stock market can be unpredictable and, for some, it can seem daunting. Vanguard provides resources to help you learn more about saving for retirement and investing. FedEx and Vanguard provide periodic live webinars, or you can learn at your own pace on the Vanguard website. To access Vanguard’s online education center, log in to your account at vanguard.com/retirementplans.
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The 401(k) plan is just another way FedEx helps you create the retirement picture of your dreams. You have a wide range of investment options, and investment changes can be made easily at vanguard.com/retirementplans.

Pay attention to investment option costs. All plan investment options have fees. You can get a sense of how much a mutual fund costs to own by looking up its expense ratio in a fund’s prospectus or fact sheet. You can also compare the expenses of all of the investment options in the plan’s lineup by reviewing the plan’s annual fee disclosure or viewing the investment options online at vanguard.com/retirementplans.

Here’s an example. Let’s say there are two funds that invest in the same stocks. The only difference is that Fund A has an expense ratio of 1.19% and Fund B has an expense ratio of 0.23%. For every $1,000 you invest in Fund B, you’ll save $9.60 due to that fund’s lower expense ratio.

Keep in mind that cost isn’t the only consideration you should make when choosing investment options. You also should review an option’s investment objectives and risks to ensure the fund aligns with your own investment goals, time horizon and tolerance for risk.