Are your retirement savings invested appropriately for your age?

April 27, 2022

Saving for retirement is an important goal at any stage of your working life, but your investment strategy should age with you.

Whether you are just getting started in your career, or nearing retirement, it’s important to review your retirement savings investments at least once a year and adjust the allocation (the distribution of your savings across different types of investments) based on your tolerance for risk, your financial situation, and how much time you have before you plan to start using your money.

Each of the major investment categories, or classes — stocks (or equities), bonds (fixed-income securities), and cash/cash equivalents — have a different level of risk and reward. Stocks are usually more volatile than bonds but offer the potential for higher returns, while cash is the least volatile but offers the lowest returns.*

Age-based allocation

Early in your career, when savings are low and time is on your side, you may be willing to tolerate a higher level of risk. If so, consider investing a larger percentage of your portfolio in stocks and less in bonds and cash. As you near retirement and have more money to invest but less time to recover from losses, a more conservative approach is advisable.

Strive for peace of mind, too

Age, however, is not the only factor in choosing an investment strategy. Because you also need to sleep at night, your investment choices should provide peace of mind — regardless of how old you are.

Help is available

Consider speaking with a financial advisor to help determine whether your current allocations are the right investment strategy for your unique circumstances. Call 866-715-2059 to speak with a Fidelity workplace financial consultant (at no charge), or schedule a complimentary, virtual 1:1 consultation (enter The Board of Pensions as the employer, select Virtual as the appointment type, and choose a date and time, then provide the requested information and click Schedule Appointment). Phone and virtual consultations are available regardless of whether you participate in the Retirement Savings Plan of the Presbyterian Church (U.S.A.), and are worth 25 Call to Health points.

If you don't have the time, expertise, or inclination to research, select, and monitor your investments, Fidelity Freedom Index Funds (also called target date funds) offer an easy and convenient investment strategy that take the guesswork out of saving for retirement, automatically adjusting and rebalancing throughout your lifetime, becoming more conservative as the target retirement date approaches.

Making investment changes

At any time, you can change how your Retirement Savings Plan account is invested by logging into your Fidelity account (select Change Investments from the Quick Links menu on the homepage), or by calling Fidelity Investments at 800-343-0860, Monday through Friday, 8 a.m. to midnight ET.

If you are not participating in the Retirement Savings Plan, talk with your employer about getting started. If your employer doesn’t offer the Retirement Savings Plan, ask them to contact the Board of Pensions for more information. All employees who work for a PC(USA)-affiliated employer are eligible to participate in the Retirement Savings Plan if their employer offers the plan to them.

*Investing involves risk, including risk of loss. The value of your investment will fluctuate over time and you may gain or lose money.