American Funds Retirement RoadmapSM
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Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money. Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus and/or summary prospectus, which can be obtained from your plan’s financial professional or downloaded and should be read carefully before investing.
Hypothetical growth calculations are not intended to reflect actual results; your results may vary.
This tool assumes the following: a hypothetical annual growth rate before retirement of 8%; a hypothetical annual growth rate in retirement of 6%; a hypothetical annual inflation rate of 4%; an expected annual salary raise of 3%; you’ll need 80% of your final salary each year in retirement; annual Social Security benefits of 40% of your final year of work (current salary adjusted for inflation and raises) up to the 2009 annual maximum of $27,876 per person; Social Security benefits are a constant amount beginning at age 67; and all money (which includes contributions and money already saved for retirement) is tax-deferred. Projected time in retirement is based on the remaining life expectancy after your planned retirement date (rounded to the nearest year). See IRS life expectancy tables.
The tool does not take certain factors into account, including early withdrawal penalties, required minimum distributions, holding periods and post-retirement income taxes (which may apply to certain investment income and withdrawals). The tool compounds earnings annually and assumes that withdrawals are made at the beginning of the year.
Regular investing does not ensure a profit or protect against loss. This tool is for illustrative purposes only and is not intended to provide investment advice or portray actual investment results. Your financial situation and goals may change, so be sure to discuss your results with your financial professional.
Investment allocations and underlying funds in the American Funds Target Date Retirement Series are as of January 1, 2009. Underlying funds and their allocation percentages are subject to the Portfolio Oversight Committee’s discretion and will evolve over time. Underlying funds may be added or removed at any time. For quarterly updates of the underlying fund allocations, go to Share prices and returns and then click on a target date fund name.
Most investments carry some degree of risk. For example, equity investments are subject to market fluctuations. Investing outside the U.S. (especially in developing countries) involves additional risks, such as currency fluctuations, as does investing in smaller companies, as more fully described in the prospectuses. Small-company stocks can fluctuate in price more than larger company stocks. Lower-rated bonds are subject to greater fluctuations in value and risk of loss of income and principal (than higher rated bonds). The return of principal in bond funds and for the bond holdings in New World Fund, Capital Income Builder, The Income Fund of America and American Balanced Fund is not guaranteed. These fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Fund shares of the U.S. Government Securities Fund are not guaranteed by the U.S. government. Diversification does not eliminate the risk of investing; losses are possible in diversified portfolios.