®
PLAN FOR RETIREMENT
AFN32287_1214
AFN32287_1007
1
®
Why Mutual of Omaha Retirement
Services?
• Proven financial strength and stability
• Customer-focused core values
Investment options are underwritten by either United of Omaha Life Insurance Company or Companion Life Insurance Company, wholly
owned subsidiaries of Mutual of Omaha.
2
®
Important Upcoming Dates:
• Open Enrollment:
• Black Out Begins:
• Black Out Ends:
[week of]
[week of]
[week of]
3
®
Today’s Agenda
•
•
•
•
•
•
Why save for retirement?
What is a 401(k) plan?
How much do you need to save?
Where should you invest your money?
How do you get started?
Specific features about your plan
4
®
Why Save for Retirement?
• Social Security will not be enough
• The impact of inflation
• Increased years in retirement
5
®
2012 Income Sources for Retirees
ASSET INCOME 11%
SOCIAL SECURITY
37%
PENSIONS 19%
OTHER 3%
EARNINGS 30%
Source: Social Security Administration, Income of the Aged Chartbook, 2010, released March 2012
6
®
Higher Cost of Inflation
TAKE A LOOK AT HOW PRICES MAY CHANGE OVER TIME:
2012
IN 15 YEARS
IN 25 YEARS
NEW CAR
$28,400
$42,040
$54,610
WEEK-LONG VACATION
$2,500
$3,700
$4,810
WINTER COAT
$150
$222
$288
1 LB. OF COFFEE
$4.10
$6.07
$7.88
Sources: Inflation Data.com, 2012
Current prices are estimates. Future prices based on an annual 2.65 percent rate of inflation.
7
®
Increased Years in Retirement
WHY DOES MY LIFE EXPECTANCY MATTER?
8
®
What is a 401(k) Plan?
• A retirement plan offered by your employer
• You contribute
• Your employer may contribute matching
contributions
• Convenience
• Tax advantages
9
®
Advantages of Investing Pretax Dollars
Assumes Adam and Michael are in a 27.5 percent tax bracket. Calculation shows federal income tax withholding only.
10
®
How Much Do You Need to Save?
• Identify personal needs
• Develop a plan
11
®
How Much Money Will I Need?
Age
Annual Salary
Amount Needed
at Retirement
25
$20,000
$40,000
$60,000
$80,000
$286,037
$810,466
$1,470,965
$2,181,130
35
$20,000
$40,000
$60,000
$80,000
$207,741
$588,619
$1,068,321
$1,584,094
45
$20,000
$40,000
$60,000
$80,000
$150,876
$427,498
$775,892
$1,150,483
55
$20,000
$40,000
$60,000
$80,000
$109,577
$310,480
$563,509
$835,544
12
This chart is for illustration purposes only. Not
intended to be investment advice; consult your
financial/tax adviser for information about your
specific situation. Assumes pretax savings through this
plan and other tax deferred savings, no change in
Social Security benefits, a 6 percent annual rate of
return on investments after retirement, retiring at age
67 and living until age 85, with all funds exhausted by
age 85. Assumes that salary and payout will grow at an
annual rate of inflation of 3.25 percent.
®
How Much Should I Contribute?
Age
Annual
Salary
Suggested
Contribution
Percent
Suggested
Weekly
Contribution
25
$20,000
$40,000
$60,000
$80,000
8%
11%
14%
15%
$30
$86
$156
$231
35
$20,000
$40,000
$60,000
$80,000
11%
16%
19%
21%
$43
$121
$219
$325
45
$20,000
$40,000
$60,000
$80,000
17%
24%
29%
32%
$65
$184
$334
$495
55
$20,000
$40,000
$60,000
$80,000
32%
45%
54%
60%
$121
$344
$623
$924
13
This chart is for illustration purposes only. Chart
computes contributions suggested to reach 75 percent of
income needed for retirement. Not intended to be
investment advice; consult your financial/tax adviser for
information about your specific situation. Some amounts
may exceed plan- or IRS-imposed participant
contribution limits for defined contribution plans. Check
the Plan Highlights section of your enrollment book for
the IRS-imposed contribution limits.
®
Why is Time Important?
The Benefits of Starting Early
Even though Alana contributed more money to
her retirement savings plan, Suzanne ended up
with nearly twice as much at age 65. Why?
Because Suzanne started early and took
advantage of the power of time and
compounding.
This illustration assumes a 6 percent earned rate per year with money
deposited at the beginning of the month. This rate is used for illustration
purposes only and doesn't represent the actual performance of any specific
investment. There’s no guarantee that any particular return will be achieved,
and past performance is no guarantee of future results. Investment returns
will vary and principle values, when redeemed, may be worth more or less
than the original investment. Where applicable, figures have been reduced
based on a tax rate of 27.5 percent.
14
$191,696
$136,694
®
Where Should I Invest My Money?
• Professional investment portfolios
• Risk-based
• Time-based
• Build your own portfolio
• Professionally managed account options
• Self-directed Brokerage Account (SDBA)*
*Not all plans qualify for the SDBA. Additional fees may apply.
Not intended to be investment advice.
15
®
Time Horizon
16
®
Risk/Return Profiles
17
®
Simplified Investing Through
Professional Investment Portfolios
•
•
•
•
Portfolios that match your needs
Rigorous expert selection process
Professional diversification
Automatically rebalanced based on pre-set
allocation over time
18
®
®
Mutual Directions Portfolios
• Series of five risk-based portfolios
• One investment decision (determined by risk tolerance)
• Designed to meet the objectives of the conservative
to aggressive investor
19
®
®
Mutual Directions Portfolios
Conservative to Aggressive Portfolios
Diversification does not ensure a profit or protect against a loss in a declining market.
20
®
Which Portfolio is Right for You?
21
®
GlidePath Retirement Series
SM
GlidePath Retirement portfolios are designed to help investors achieve a broadly
diversified portfolio that will gradually become more conservative in its allocation as
the target retirement date nears. The portfolios continue to be allocated along their
investment “glidepaths” for approximately 20 years beyond the target retirement
date. GlidePath Retirement portfolios offer higher equity exposure at the target
retirement date than “to retirement” style time based portfolios.
Diversification does not ensure a profit or protect against a loss in a declining market.
22
®
GlidePath Retirement Series
SM
GlidePath Retirement 2005
GlidePath Retirement 2025
GlidePath Retirement 2045
Designed for investors who intend to
retire within five years of 2005.
Designed for investors who intend to
retire within five years of 2025.
Designed for investors who intend to
retire within five years of 2045.
GlidePath Retirement 2010
GlidePath Retirement 2030
GlidePath Retirement 2050
Designed for investors who intend to
retire within five years of 2010.
Designed for investors who intend to
retire within five years of 2030.
Designed for investors who intend to
retire within five years of 2050.
GlidePath Retirement 2015
GlidePath Retirement 2035
GlidePath Retirement 2055
Designed for investors who intend to
retire within five years of 2015.
Designed for investors who intend to
retire within five years of 2035.
Designed for investors who intend to
retire within five years of 2055.
GlidePath Retirement 2020
GlidePath Retirement 2040
GlidePath Retirement 2060
Designed for investors who intend to
retire within five years of 2020.
Designed for investors who intend to
retire within five years of 2040.
Designed for investors who intend to
retire within five years of 2060.
23
®
Vanguard® Target Retirement Funds
Vanguard® Target Retirement Funds are time-based investments that become
more conservative as the target retirement date nears. Vanguard Target
Retirement Funds offer lower equity exposure at the target retirement date than
“through retirement” style time-based portfolios.
Diversification does not ensure a profit or protect against a loss in a declining market.
All Vanguard Target Retirement funds are managed by The Vanguard Group, Inc. Vanguard and Mutual of Omaha are not affiliated companies.
24
®
Vanguard® Target Retirement Funds
Vanguard Target Retirement
Income Fund
Vanguard Target Retirement
2030 Fund
Vanguard Target Retirement
2050 Fund
Designed for investors already in
retirement.
Designed for investors who intend to
retire within five years of 2030.
Designed for investors who intend to
retire within five years of 2050.
Vanguard Target Retirement
2015 Fund
Vanguard Target Retirement
2035 Fund
Vanguard Target Retirement
2055 Fund
Designed for investors who intend to
retire within five years of 2015.
Designed for investors who intend to
retire within five years of 2035.
Designed for investors who intend to
retire within five years of 2055.
Vanguard Target Retirement
2020 Fund
Vanguard Target Retirement
2040 Fund
Vanguard Target Retirement
2060 Fund
Designed for investors who intend to
retire within five years of 2020.
Designed for investors who intend to
retire within five years of 2040.
Designed for investors who intend to
retire within five years of 2060.
Vanguard Target Retirement
2025 Fund
Vanguard Target Retirement
2045 Fund
Designed for investors who intend to
retire within five years of 2025.
Designed for investors who intend to
retire within five years of 2045.
25
*Vanguard is a trademark of The Vanguard Group, Inc.
®
T. Rowe Price Personal Strategy Funds
Conservative to Aggressive Portfolios
Diversification does not ensure a profit or protect against a loss in a declining market.
26
®
T. Rowe Price Personal Strategy Funds
•Managed by T. Rowe Price using primarily individual
securities
•Rebalanced by T. Rowe Price, within defined ranges,
based on economic outlook, interest rates and
financial markets
•Actively managed
27
®
Build Your Own
•
•
•
•
Customized portfolios
High level of involvement
Carefully selected, monitored investment options
Self-directed brokerage account*
*Not all plans qualify for the SDBA. This feature may impact pricing.
28
®
Monitored Funds
Fixed Income/Bonds
•
•
•
•
•
•
•
•
BlackRock High Yield Bond Portfolio
Bond Index Fund
Guaranteed Account*
Lifetime Guaranteed Income Account**
Metropolitan West Total Return Bond Fund
PIMCO Total Return Fund
Templeton Global Total Return Fund
TIPS Index Fund
Domestic Stock Funds
•
•
AB Discovery Value Fund
AllianzGI NFJ Dividend Value Fund
*The Guaranteed Account is an individual investment choice that is not part of the Mutual Directions ® or GlidePath Retirement SM Series is not part of the program used by
Mutual of Omaha to monitor the portfolios and their underlying funds at the product level.
**Lifetime Guaranteed Income Account (Rider Forms 651-GAQR-10 or 651-GAQR-10(CT) or 651-GAQR-10(OR)) may not be available in all states and specific
features may vary by state. Availability may vary by plan. The Lifetime Guaranteed Income Account is not available in New York or Nevada.
Availability may vary by plan and may change over time.
29
®
Monitored Funds (Continued)
Domestic Stock Funds (continued)
•
ClearBridge Small Cap Growth Fund**
•
Goldman Sachs Small CapValue Fund
•
Growth Stock Index Fund
•
Harbor Capital Appreciation Fund
•
John Hancock Disciplined Value Mid Cap
Fund
•
Lord Abbett Value Opportunities Fund
•
MFS Value Fund
•
Mid Cap Stock Index Fund
•
Prudential Small Cap Value Fund
* Not available in New York.
** Only available in New York
Availability may vary by plan and may change over time.
30
•
Royce Total Return Fund
•
Small Cap Stock Index Fund
•
Small Company Fund*
•
Stock Market Index Fund
•
T. Rowe Price Growth Stock Fund
•
Value Stock Index Fund
•
Vanguard® Morgan Growth Fund
•
Vanguard® Windsor II™ Fund
•
Waddell & Reed New Concepts Fund
•
William Blair Small-Mid Cap Growth I Fund
®
Monitored Funds (Continued)
International Stock Funds
Specialty Funds
•
Causeway International Value Fund
•
Cohen & Steers Institutional Realty Shares
•
Emerging Markets Index Fund
•
Franklin Growth Fund
•
Harbor International Fund
•
Oppenheimer Global Fund
•
International Developed Countries Fund
•
PIMCO All Asset Fund
•
International Stock Index Fund
•
Vanguard Global Equity Fund
•
MFS International Growth Fund
•
Wells Fargo Advantage Emerging
Markets Equity Fund
Availability may vary by plan and may change over time.
31
®
Self-directed Brokerage Account
For participants who want to select and trade in:
• Individual stocks listed on major U.S. stock exchanges
• New York Stock Exchange
• American Stock Exchange
• NASDAQ
• Fixed income funds including U.S. government and
corporate securities
• A large list of mutual funds
Additional fees apply.
32
®
Professionally Managed Account Options
For participants who want a “do it for me” approach
• Personalized retirement strategy recommendations
• Professional account management
• Regular monitoring and detailed reports
Additional fees apply.
33
®
Professionally Managed Account Option
Stadion
• Fully automated feature
• Manages investments based on current market conditions
• Defaulted based on age or individual preference
Additional fees apply.
34
®
Stadion Managed Account Portfolio
New Portfolio
10%
Current Portfolio Line Up
10%
15%
25%
40%
25%
55%
40%
50%
50%
50%
65%
50%
40%
35%
25%
10%
Maximum Growth
Age: 35 and Under
Growth
Age: 36-49
Moderate Growth
Age: 50-59
Balanced
Age: 60-64
Conservative
Age: 65-69
5%
Cap Pres
Age: 70 and over
Core Fixed Income – This
Flex – We invest this portion in equity,
Core Equity – This portion
portion always remains invested
in fixed income positions.
fixed income, or cash and other stable
value positions depending on current
market conditions.
always remains invested in
equity positions.
Past performance does not guarantee future returns. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. Investment return
and principal value of an investment will fluctuate so that an investor's portfolio may be worth more or less than their original investment. Stadion’s actively
managed portfolios may underperform during bull markets.
All Stadion portfolios are managed by Stadion Money Management, LLC. Stadion and Mutual of Omaha are not affiliated companies.
®
A traditional balanced fund
uses a static asset
allocation strategy.
A significant portion of the portfolios – the Flex component – can be
invested in equity positions or fixed income/cash positions based on
market risk conditions.
25%
25%
40%
75%
75%
50%
75%
60%
25%
Portfolio
Low Risk Environment
Traditional
Balanced
Fund
25%
Balanced Portfolio
High RiskStadion
Environment
Stadion
Balanced
Portfolio
Equity
25%
Low Risk Environment
High Risk Environment
Low Risk
Environment
Fixed Income
High Risk
Environment
Flex Portion
Past performance does not guarantee future returns. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. Investment return
and principal value of an investment will fluctuate so that an investor's portfolio may be worth more or less than their original investment. Stadion’s actively managed
36
portfolios may underperform during bull markets.
All Stadion portfolios are managed by Stadion Money Management, LLC. Stadion and Mutual of Omaha are not affiliated companies.
®
Professionally Managed Account Option
Morningstar® Retirement Manager™
• Professional investment guidance
• Managed account services
• Ongoing account review
Additional fees apply.
37
®
Qualified Default Investment Alternatives
(QDIA)
Your Plan’s QDIA solution:
•
•
•
•
Stadion
Morningstar® Retirement ManagerTM
GlidePath RetirementSM Series
Vanguard Target Retirement Funds
38
®
How Do I Get Started?
•
•
•
•
Determine how much to contribute
Complete Risk Tolerance Questionnaire
Choose how to invest your money
Complete the enrollment forms
39
®
How Do I Get Started With Online
Enrollment?
• Go to www.getretirementright.com
40
®
Online Enrollment – 1st Time Log In
•1st time Click
“Need to Register”
41
®
Online Enrollment – What You Need
•Social Security Number
•Date of Birth
•Zip Code
42
®
Step 1 – Plan Highlights
43
®
Step 2 – Deferral
44
®
Step 2 – Deferral Completed
45
®
Step 3 – Choose Investments
46
®
Step 4 – Designate Beneficiary
•Must have all of
these to complete
Beneficiary
Designation
47
®
Step 5 – Confirm Enrollment
48
®
Setting Your Retirement Goals
•Click here to determine
your retirement goals
49
®
Online Tools – Paperless Statements
Your Profile
View Profile
•Email Address:
email validation
is a 4 step
process. Once
complete, you
will receive an
email when your
statement is
available to view
•Click on “paper”
if you want a
statement mailed
to your home.
50
®
Your Plan Features
• Plan highlights
• Plan tools
51
®
Plan Highlights
•
•
•
•
•
•
Eligibility
Contributions
Vesting
Investment options
Loans
Distributions
52
®
Roth 401(k) – More Ways to Save for Retirement
•
•
•
•
•
After-tax contributions
Tax-free withdrawals*
No income restrictions
Eligible for matching contributions**
Eligible for rollover into another qualified plan
*Contributions must remain in the plan for 5 years from the first time Roth 401(k) contributions are made and begin after age 59 ½. Roth contributions are not available to
be withdrawn as a loan, even if your plan permits plan loans.
**Check your plan provisions.
53
®
What is more advantageous – Roth or Pretax
You may want to consider pretax contributions if:
You may want to consider Roth contributions if:
•
Minimizing the taxes you pay today is very
important to you
•
You want your retirement savings to be tax free
when withdrawn (subject to IRS conditions)
•
You think your tax rates will be lower when you
retire than they are today
•
You think your tax rates will be higher when you
retire than they are today
•
The current tax savings you get by making pretax
contributions is substantial
•
Your personal tax situation limits the benefits of
pretax contributions today (your income is low or
you have high tax deductions or credits)
•
Increasing your income would reduce tax credits
you may be eligible for now
•
You plan to leave the money in the plan until you
retire
•
You believe the certainty of an immediate tax
reduction outweighs a potentially larger, but
uncertain tax reduction in the future
•
•
You are younger and have a long time to
accumulate earnings on your contributions
(compounding earnings will have a greater impact
on the amount distributed tax free)
You have the self-discipline to take the tax savings
and invest them for retirement
•
You are not eligible for a Roth IRA due to income
limitations
54
®
Convenient Customer Service Options
Interactive Voice Response (IVR) System
• 1-888-917-7191
Speak with a Retirement Specialist
•
•
•
•
Call IVR System
Press 0
7:00 a.m. – 7:00 p.m. (CST)
Monday - Friday
55
®
Quick Access
Web site: GetRetirementRight.com/URL
•
•
•
•
•
•
•
•
•
•
•
Account balance information
Investment election changes
Deferral percentage changes
Transfers among current funds
Sample loan modeling
Loan requests
Statements on demand
Fund performance information
Distribution requests
Retirement planning tools
Wireless application protocol
56
®
Education and Planning Tools
SmartPlan EnterpriseSM
Go to Getretirementright.com/smartplan/URL
57
®
Remember
•
•
•
•
Start saving early
Contribute regularly
Choose investments that meet your unique needs
Online and telephone support is always available
58
®
Questions?
59
®
Important Information
All graphs and charts are for illustration purposes only and do not represent actual performance of specific investments. Your investment results will differ.
Unless noted, illustrations assume 6 percent growth per year with money deposited at the beginning of the month.
Figures have been reduced based on a tax rate of 27.5 percent.
Taxes must be paid when funds are withdrawn.
This presenter does not offer investment advice, legal advice, tax advice or tax opinions. Consult with your investment, legal or tax professional before
taking any action based on this information.
Past performance is no guarantee of future results.
Investment options are offered through a group variable annuity contract (Forms [902-GAQC-09, 903-GAQC-14, 903-GAQC-14 FL, 903-GAQC-14 MN,
903-GAQC-14 OR, 903-GAQC-14 TX], or state equivalent) underwritten by United of Omaha Life Insurance Company for contracts issued in all states
except New York. United of Omaha Life Insurance Company, Omaha, NE 68175 is licensed nationwide except in New York. Companion Life Insurance
Company, Hauppauge, NY 11788 is licensed in New York and underwrites the group variable annuity [(Form 900-GAQC-07(NY))]. Each company
accepts full responsibility for each of their respective contractual obligations under the contract but does not guarantee any contributions or investment
returns except as to the Guaranteed Account and the Lifetime Guaranteed Income Account as provided under the contract. Specific features of the Lifetime
Guaranteed Income Account vary by state. Restrictions apply. The Lifetime Guaranteed Income Account is not available in Nevada or New York. Neither
United of Omaha Life Insurance Company, Companion Life Insurance Company, nor their representatives or affiliates offers investment advice in
connection with the contract.
Group variable annuities are long-term investment vehicles designed to accumulate money on a tax-deferred basis for retirement purposes. Distributions
may be subject to ordinary income tax and, if taken prior to age 59½, a 10 percent federal tax penalty may apply. Investing in a group variable annuity
involves risk, including possible loss of principal.
Mutual Directions: The performance of the portfolios is dependent on the performance of their underlying funds, and will assume the risks associated with
these funds. The risks will vary according to each portfolio's asset allocation, and the risk level assigned to each portfolio is intended to reflect the relative
short-term price volatility among the funds in each. Investment return and principal value of security investments will fluctuate. The value at the time of
redemption may be more or less than the original cost. Past performance is no guarantee of future results. Diversification does not ensure a profit or protect
against loss in a declining market.
Investments in target date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date)
when an investor in the fund would retire and leave the work force. The fund will gradually shift its emphasis from more aggressive investments to more
conservative ones based on its target date. A target date fund is not guaranteed at any time, including on or after the target date.
60
®
Important Information
GlidePath/Vangaard Target: The year in the target date fund name refers to the approximate year when an investor in the fund would retire and leave the
work force. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on the target date. The
equity allocation of the Vanguard Target Retirement Funds is relatively more conservative closer to and at retirement while the retirement strategy of the
Mutual GlidePath funds translates into an equity allocation that is somewhat more aggressive in order to protect against longevity risk. Vanguard's glide
path converts to the Vanguard Target Retirement Income Fund, with a static asset allocation, following the seventh year of reaching the named target date.
The Mutual GlidePath funds' underlying investment allocations continue adjusting along the glide path for approximately twenty years beyond the named
target date. The return of principal for the underlying funds in a target date fund is not guaranteed at any time, including on or after the target date.
Although the target date funds are managed for investors on a projected retirement date time frame, the fund's allocation strategy does not guarantee that
investors' retirement goals will be met and a target date fund should not be invested in based solely on age or retirement date. Unit price, principal value and
return will vary and an investor may have a gain or loss when units are sold.
Roth contributions are not available to be withdrawn as a loan, even if your plan permits plan loans.
Prior to selecting investment options for your retirement account, you should consider the investment objectives, risks, fees and expenses of each option
carefully. For this and other important information, you should review your enrollment materials or the participant website. Read this information
carefully.
61