Retirement & IRAs

Planning For Your Financial Future

It's time to get started on your financial foundation.

A plan is essential for reaching any goal. It keeps you focused and can eventually lead to success. The same thing goes for a financial goal. If you want stability and security down the road, you need to have a strategy.

But when you're just starting to think about your future, and retirement seems so far away, it can be hard to get started on a strategy.

That's why we're here. To help you figure out what you need to do to start setting goals and stay on track to reach them. Here's some information to help you begin thinking about a plan. When you're ready for the next step, contact your State Farm® agent and we'll help you get started.

You can also visit our convenient calculator Retirement Illustrated® to help you get started.

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Establish A Budget

The best way to start is by figuring out a budget so you can get in the habit of saving before spending. If you don't follow a budget, you might be spending more than you realize, and saving less than you could be.

Begin by tracking your spending for a month. The easiest way to do this is by going about your life as usual. Keep track of the bills you pay and items you buy, from groceries to your daily coffee. At the end of the month, compare what you earned with what you spent.

Next, take a good look at what you spent your money on. Are there some things you can do without or ways to cut back? Some expenses are fixed, like food, housing and utilities, but some are just luxuries. Can you eliminate some of those? (Remember, though, you don't need to cut out every unnecessary expense. A luxury-free budget is about as sensible as no budget at all, and completely depriving yourself of all treats could eventually send you on a serious budget-damaging spending spree!)

Set Financial Goals

Your budget will be easier to follow if you set financial goals. In the short-term, you may want to pay off credit card debt. Your long-term goals might include saving for the down payment on a home, your children's college tuition or retirement.

Once you've identified your goals, give yourself a timeline. That will help you figure out how much of your budget to set aside each month.

Review your goals periodically so they're always fresh in your mind. If you go off course, don't get frustrated and give up; simply reassess and continue working toward your goals.

Invest Regularly, Even Small Amounts

Investing early in life is advantageous because your money has more time to compound and grow. But it's never too late to start.

*This illustration is intended to show a hypothetical example of the principle of compounding. The example does not include the impact of any expenses or taxes that would be associated with an actual investment. If such costs had been taken into account, the results shown would have been lower. This hypothetical illustration is not intended to represent any specific type of investment, nor is it predictive of future results.

Many people don't believe they have enough money to become investors. But you don't have to invest a large amount of money initially or regularly. It's perfectly fine to start slow and small while you make investing a habit.

A good way to get started is by participating in your employer-sponsored 401(k) plan or opening an Individual Retirement Account (IRA). In many cases, you can even make regular contributions to these plans by having the money taken directly out of your paycheck.

With State Farm, you can start an automatic investment plan (AIP) for your State Farm Mutual Funds® accounts. An AIP lets you make regular deposits into your account(s) through electronic fund transfers from your bank account. You determine the amount and date of your AIP contribution. Best of all, you can start an AIP with as little as $50 a month.

Your investing plan should include a strategy for increasing your contributions. After a few months of investing, when you've adjusted to living on less money, boost the amount you're investing by a percent or two. You can also look for ways to invest lump-sums of money, such as when you get a bonus, a monetary gift or your tax refund.


Neither State Farm nor its agents provide tax, legal or investment advice. Please consult your own adviser regarding your particular circumstances.

Before investing, consider the funds' investment objectives, risks, charges and expenses. Contact State Farm VP Management Corp (800-447-4930) for a prospectus or summary prospectus containing this and other information. Read it carefully.


Securities, insurance and annuity products are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

Automatic investment plans do not assure a profit or protect against loss.