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Romain Buick, Inc. 401(k) Plan Zach Hopkins Sr. Client Consultant (812) 456-3531

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Presentation on theme: "Romain Buick, Inc. 401(k) Plan Zach Hopkins Sr. Client Consultant (812) 456-3531"— Presentation transcript:

1 Romain Buick, Inc. 401(k) Plan Zach Hopkins Sr. Client Consultant (812)

2

3 TODAY’S AGENDA… Plan Highlights Asset Allocation and your Investment options Accessing your account

4 Plan Highlights EligibilityAge 21 and 1,000 hours of service in 12 mos. Entry datesCalendar quarters (Jan.1, Apr.1, Jul.1, Oct.1) EE ContributionsEmployee 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)

5 Plan Highlights (cont.) VestingOn employer contributions 2 yrs. = 20% 3 yrs. = 50% 4 yrs. or more = 100% InvestmentsParticipants direct investment for all contributions. (default investment FMT/Touchstone Conservative Alloc. 35% stock, 65% bonds/cash) WithdrawalsNormal retirement age (65), In-service at age 59 and ½, death, disability or termination of employment, hardships available

6 ARE YOU LOOKING … Lower your taxable income by making pretax contributions Delay taxes on your contributions and earnings until you make a withdrawal Contributing 5% to the 401(k) PlanContributing 0% to the 401(k) Plan Annual Salary$30,000 Retirement Savings$1,500$0 Taxable Income$28,500$30,000 Taxes (25%)$7,125$7,500 Take-home Pay$21,375$22,500 for a tax break?

7 ARE YOU LOOKING … 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. for a tax break?

8 ARE YOU … taking advantage of your employer match? 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. Your Annual Contribution Company’s Annual Contribution Maximum Amount of Company’s Annual Contribution Lost Benefit $30,000 x 4% = $1,200$.50 x $1,200 = $600$30,000 x 2% = $600 $0 $30,000 x 3% = $900$.50 x $900 = $450 $30,000 x 1.5% = $450 $600 – $450 = $150

9 CONTRIBUTING JUST 1% MORE … can have a significant impact over time. 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. Investor A Contributes 5% for 30 Years Account Balance Investor B Contributes 6% for 30 Years Account Balance Difference of $37,000

10 THE SOONER YOU START … the better you’ll finish. 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. Investor A Saves for 10 Years and Stops Investor B Waits 10 Years to Start Saving Account Balance Less $40,000 Contributions Starting at Age 30 and Ending at Age 40 Contributions Starting at Age 40 and Ending at Age 65 Total Account Value

11 INVESTMENT OPTIONS

12 ALLOCATION … Asset allocation is the process of dividing your contributions among three basic asset classes: stocks, bonds, and cash equivalents.

13 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 ClassInvestment 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

14 INVESTMENTS AND INFLATION Source: Ibbotson Associates, Stocks, Bonds, Bills and Inflation Yearbook 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. Percentage of Annual Returns Compared With Inflation, 1926 – % Inflation

15 BEST AND WORST ONE-YEAR RETURNS Source: Ibbotson Associates, Stocks, Bonds, Bills and Inflation Yearbook 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. Worst one-year returnAverage returnLargest one-year return 1990 – 2010

16 KEEP IN TOUCH 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 Client Service Representatives available Monday to Friday 8:30 AM to 7:00 PM (ET) planretire.53.com Toll-free Participant Services Line

17 How do I enroll? Complete the New Account Form Complete the Designation of Beneficiary Form

18 Q & A Questions?


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