Christina Doss is the senior vice president at SunTrust Investment Services in Downtown Pensacola. Doss discusses the importance of saving, the magic of compound interest and the importance of saving as early as possible. Doss started working as an accredited asset management specialist for SunTrust last May. She has worked in the financial business for 15 years and she has a bachelor’s of science degree from Golden Gate University. She lives in Pensacola with her husband, Rob, a retired Marine Corps pilot.

Q: What’s the best way to approach saving for retirement?

Doss: There are many forms of retirement plans, but in general, retirement plans come in two forms: employer-sponsored retirement plans and self-funded retirement plans. If you have an employer-sponsored retirement plan available to you, participate. Try to contribute at least up to the amount of your company's matching contribution. More if you are able to do so. If you have the capacity to fund an IRA (Individual Retirement Account) this is another opportunity to invest for your retirement tax deferred.

Q: You advocate starting your retirement savings at an early age. What incentives are there to start saving early?

Doss: You can benefit from compound growth. For example: If you invested $10,000 at age 25, assuming a hypothetical rate of return of 8 percent and not particular to any specific investment, after 40 years at age 65, the future value of the original $10,000 investment would be $217,245. But if you waited until age 50 to invest your $10,000, assuming a hypothetical rate of return of 8 percent, after 15 years at age 65, this investment would only be worth $31,721.

Q: In today’s economy, with gas prices soaring and the cost of living increasing, some folks, single people especially, might find it difficult if not impossible to save when there are extraneous expenses tearing away at our budgets. How can we make saving for the future a realistic priority rather than a dream?

Doss: Understand where and what you spend your money on. Take the time to analyze your spending habits through a simple budget. If your financial circumstances are more complex, consider hiring a professional to work with you on a financial plan. Most of us have room to cut out some “fat’’ in our spending, such as lattes or eating out, which can add up to several hundred or thousands of dollars each year.

Q: What is a good, realistic amount to save?

Doss: It’s important to understand your goals, objectives and time horizon for retirement. Specific savings amounts will vary by individual and personal circumstance. As a general rule, if you are just beginning to start saving, try to save at least 5 to 10 percent of your gross earnings and increase that amount as you receive pay raises or bonuses.

Pay yourself first.

Q: What are some tools or resources we can use to help us with our investing?

Doss: The Rule of 72 is a simple formula and a helpful way to estimate how long it will take to double your money at different rates of return. For example, at a hypothetical rate of return of 6 percent and not tied to any particular investment, you would double your money in 12 years. At a hypothetical rate of 10 percent, you would double your money in 7.2 years. Additionally, systematically investing a set amount over time on a regular basis, such as monthly, can be a prudent and disciplined approach to saving for your retirement.

Q: As the adage goes, is it dangerous to put “all your eggs in one basket?” Should we think creatively and diversify when saving for the future?

Doss: Absolutely. While diversification alone does not ensure against loss, developing a well constructed and diversified investment plan across investments and asset classes based on your risk tolerance, time horizon and goals, can be the single most important contributor to your return. Rebalancing on a regular basis is critical to ensure proper asset allocation.

Q: What investments are considered risky?

Doss: This is not black and white. Investment choices should be considered based on each individual set of circumstances including age, income needs, risk tolerance, goals and time horizon for retirement. On the risk/return scale, and broadly speaking, cash-equivalent investments such as savings accounts, money markets, short-term CD’s and treasury bills are on the lower end for risk and return; stocks and stock mutual funds are on the higher end risk and return scale with bonds falling in the middle. While investing in stocks or equities can be more volatile, they have historically offered the greatest opportunity for growth, but bear in mind, that past performance does not guarantee future results. Most people will benefit from having a well diversified portfolio with a mix of cash equivalent investments, fixed income and equities as well as real estate. The amount invested in each will vary depending on personal circumstances.

Q: Some people want to save, but they don’t have a budget that shows them where their money is going. How important is a budget when considering investing and saving for the future?

Doss: A budget can be a terrific organizational tool for mapping out expenditures and identifying opportunities to eliminate wasteful spending which can be reallocated toward your savings and retirement plan.