“Retirement saving requires key decisions”: Start early, save enough, and invest wisely. Government regulators look to open 401(k) plans to alternative assets like private market investments. Laura and JR, hypothetical retirement savers, show the impact of decisions on future savings and retirement outcomes.

Laura starts early, contributing 10% of her $75,000 salary to her 401(k), earning a 13% total savings rate with the company match. JR delays saving, only contributing the minimum to qualify for the company match five years later, at 6% with a 3% match.

Laura and JR both have access to various investment vehicles, including target-date funds with different allocations. Laura chooses the public-only fund for transparency, while JR opts for private markets for higher returns to make up for his late start.

As Laura and JR approach retirement, they review their 401(k) balances. JR’s private markets fund outperformed, giving him about $2 million, while Laura’s public-only fund grew to over $3 million due to starting early and contributing more.

Laura’s decision to start saving early and save more led to a larger balance than JR’s, despite his private markets edge. Focusing on savings amount and starting time is crucial for retirement success, rather than market fluctuations.

Assumptions were made about Laura and JR’s consistent salaries, employment, and investment returns. Private equity funds may not always outperform public counterparts, and private markets can be challenging to forecast accurately. Target-date funds with private market exposure offer potential benefits but come with risks.

Read more at Yahoo Finance: The Key to a Winning 401(k)