Schwab Retirement Plan Center
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Savings Strategies

Make regular contributions

It's no secret that the best time to buy an investment is when the price is low. Unfortunately, even the most seasoned investors and money managers can't always know which way the market will go. So instead of trying to “time the market” (buying when the market is down, selling when it's up), let dollar-cost averaging work to your advantage.

Dollar-cost averaging is the practice of investing the same amount on a regular basis, like making contributions to your plan account each pay period to potentially lower your average cost per share and increase the number of shares you own. Best of all, as your investments generate returns, those returns are used to buy additional shares, which are added to your account.

How dollar-cost averaging typically works in a fluctuating market

No matter what the market is doing, regular contributions can lower your average cost per share and increase your total number of shares purchased over time.

Regular Investment

Share Price

Shares Purchased










Average cost per share:


Number of shares purchased:


Note: Dollar-cost averaging does not assure a profit and does not protect against loss in declining markets.