Presentation - United Leasing, Inc.

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Romain Buick, Inc.
401(k) Plan
Zach Hopkins
Sr. Client Consultant
(812) 456-3531
[email protected]
TODAY’S AGENDA…
 Plan Highlights
 Asset Allocation and your Investment options
 Accessing your account
Plan Highlights
 Eligibility
Age 21 and 1,000 hours of service in 12 mos.
 Entry dates
Calendar quarters (Jan.1, Apr.1, Jul.1, Oct.1)
 EE Contributions
Employee pre-tax deferrals up to $17,500 (2013)
Employees age 50+ (additional $5,500)
Stop contributions anytime, increase or decrease
deferrals quarterly

ER Contributions
Discretionary matching contribution on elective
deferrals (50% match on first 4% deferred)
Discretionary profit-sharing contributions (1,000
hours of service)
Plan Highlights (cont.)
 Vesting
On employer contributions
2 yrs. = 20%
3 yrs. = 50%
4 yrs. or more = 100%
 Investments
Participants direct investment for all
contributions. (default investment
FMT/Touchstone Conservative Alloc. 35% stock,
65% bonds/cash)
 Withdrawals
Normal retirement age (65), In-service at age 59
and ½, death, disability or termination of
employment, hardships available
ARE YOU LOOKING …
for a tax break?
 Lower your taxable income by making pretax contributions
 Delay taxes on your contributions and earnings until you make
a withdrawal
Annual Salary
Retirement Savings
Taxable Income
Taxes (25%)
Take-home Pay
Contributing 5% to the 401(k) Plan
Contributing 0% to the 401(k) Plan
$30,000
$30,000
$1,500
$0
$28,500
$30,000
$7,125
$7,500
$21,375
$22,500
ARE YOU LOOKING …
for a tax break?
401(k) Plan Snapshot
Retirement Savings
$1,500
Tax Savings
$7,500 - $7,125 = $375
Reduction in Take-home Pay
$22,500 - $21,375 = $1,125
These examples assume the employee earns $30,000 per year and contributes 5% to the plan on a pretax basis.
The calculations are for illustration only.
ARE YOU …
taking advantage of your employer match?
Your Annual
Contribution
Company’s Annual
Contribution
Maximum Amount
of Company’s
Annual
Contribution
$30,000 x 4% = $1,200
$.50 x $1,200 = $600
$30,000 x 2% = $600
$0
$.50 x $900 = $450
$30,000 x 1.5% =
$450
$600 – $450 = $150
$30,000 x 3% = $900
Lost Benefit
This example assumes the employee earns $30,000 per year, and that the company contributes $0.50 for every
$1 the employee contributes to the plan, up to a maximum of 4% of the employee’s compensation per year.
CONTRIBUTING JUST 1% MORE …
can have a significant impact over time.
Contributes 5% for 30 Years
Contributes 6% for 30 Years
$183,518
$220,222
Difference of
$37,000
$54,000
$45,000
Contributions
Account Balance
Investor B
Account Balance
Investor A
Total Account Value
Contributions
Total Account Value
This example assumes both investors earn $30,000 per year. Investor A contributes 5% to the plan on a pretax basis;
Investor B contributes 6% to the plan on a pretax basis. Their investments earn an average of 8% per year for 30
years. The calculations do not factor in salary increases, any company match or inflation and are for illustration only.
THE SOONER YOU START …
the better you’ll finish.
Saves for 10 Years and Stops
Waits 10 Years to Start Saving
$160,720
Account Balance
Investor B
Account Balance
Investor A
Less $40,000
$118,432
$37,000
$15,000
Contributions Starting at Age
30 and Ending at Age 40
Total Account Value
Contributions Starting at Age
40 and Ending at Age 65
Total Account Value
This example assumes both investors earn $30,000 per year and contribute 5% to the plan on a pretax basis. Investor
A starts saving at age 30, stops saving at age 40, and retires at age 65. Investor B starts saving at age 40 and stops
saving when he retires at age 65. Their investments earn an average of 8% per year. The calculations do not factor in
salary increases or inflation and are for illustration only.
INVESTMENT
OPTIONS
ALLOCATION …
Asset allocation is the
process of dividing your
contributions among three
basic asset classes: stocks,
bonds, and cash
equivalents.
INVESTMENT OPTIONS
 You take a more active role in financial planning
 You select the combination of funds that best meet your risk
tolerance and return objectives
Asset Class
Investment Options
Fixed Income (Cash Equivalents)
FMT/FFTW Income Plus
Balanced Funds
FMT/Touchstone Growth (90% stock, 10% bonds)
FMT/Touchstone Moderate Gr. (75% stock, 25% bonds)
FMT/Touchstone Conservative (35% stock, 65% bonds)
Domestic Stocks
FMT/Vanguard 500 Index
FMT/Vanguard Mid Cap Index
FMT/Vanguard Small Cap Index
INVESTMENTS AND INFLATION
12%
10%
9.8%
Percentage of Annual Returns Compared With
Inflation, 1926 – 2010
8%
5.3%
6%
3.7%
4%
Inflation
2%
3.0%
0%
Large-cap Stocks
Intermediate-term Government
Bonds
U.S. Treasury Bills
Source: Ibbotson Associates, Stocks, Bonds, Bills and Inflation Yearbook 2011. Stocks are represented by the Standard & Poor’s 500 Stock Index, bonds
by a one-bond portfolio or intermediate-term government bonds, T-Bills by a one-bond portfolio of U.S. Treasury bills. Investors cannot invest directly in these
indexes. Note that common stocks and bonds fluctuate in value. The interest and principal on U.S. Treasury bills and many government bonds are guaranteed.
Inflation is represented by the Consumer Price Index. Inflation data do not represent investment return. Past performance is not indicative of future results of the
performance of any fund in your plan.
BEST AND WORST ONE-YEAR RETURNS
1990 – 2010
Average return
Largest one-year return
Worst one-year return
Source: Ibbotson Associates, Stocks, Bonds, Bills and Inflation Yearbook 2011. Stocks are represented by the Standard & Poor’s 500 Stock Index, bonds
by a one-bond portfolio or intermediate-term government bonds, T-Bills by a one-bond portfolio of U.S. Treasury bills. Investors cannot invest directly in these
indexes. Note that common stocks and bonds fluctuate in value. The interest and principal on U.S. Treasury bills and many government bonds are guaranteed.
Past performance is not indicative of future results of the performance of any fund in your plan.
KEEP IN TOUCH
planretire.53.com
 Secure, password-protected, encrypted site
 Review account information, transaction history,
and statements
 Transfer account balance among investment
options and/or change your deferral amount
 Access educational information and planning tools
Toll-free Participant Services Line
 1.800.754.9080
 Client Service Representatives available Monday to
Friday 8:30 AM to 7:00 PM (ET)
How do I enroll?
•Complete the New Account Form
•Complete the Designation of Beneficiary Form
Q&A
Questions?
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