De8 asheville savings bank 2011

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Enrollment Presentation for the Ashville Saving Bank Retirement Savings Plan

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  • Today we’re going to: - Discuss the benefits of participating in a 401(k), - Review the importance of savings now vs. later. - Review key investment concepts that will help you develop an investment strategy that’s right for you, and - Discuss the investment choices that are available under the Plan
  • You are eligible to participate in the plan once you have reached age 21 and have completed one year of service in which you have worked at least 1000 hours. You have the flexibility to enter the plan on the first day of each month. (state entry dates if different)
  • We’ve talked about how great a 401(k) plan is. Now let’s look at how you can contribute to the plan. You choose the amount you want to contribute, between 1% and 15% of salary. (Remember, for plan purposes, salary includes base salary only). Your contributions can be made with pretax dollars, after-tax dollars, or even a combination of both. If you save with pretax dollars, you can reduce your taxable income. If you save with after-tax dollars, the portion saved will be part of your taxable income. But in either case the money grows tax-deferred. Your employer understands that your financial situation can change over time, so it provides you with the flexibility to change your contribution amount should the need arise. For example, you may receive a raise and decide that it is an appropriate time for you to increase your contribution percentage. In fact, you can change your contribution rate as often as once per month. The key here is that you are in control of your retirement savings, and you have the flexibility to make changes.
  • When you choose to contribute to your 401(k) plan, you will also receive matching contributions. The advantage to matching contributions is obvious--it’s like getting “Free” money ! The matching contribution is your employer’s way of helping you to provide for a comfortable retirement. Your matching contribution actually increases with your years of service. It works like this: your employer will match 50% of the first 6% that you save during the first three years of employment, 75% through your fifth year of employment, and 100% after five years of employment. That means for every $1 you save in your 401(k) plan, your employer makes a contribution of 50 cents, 75 cents, or $1.00 depending on your years of service, up to the first 6% of salary. Where else can you get an immediate 50% return on your investment! And, employer matching contributions are invested in the same funds as your own contributions so you have total control over where all the money in your account is invested.
  • Vesting refers to “ownership” or your right to the contributions made on your behalf. You are always 100% vested, in your own contributions as well as any employer contributions made on your behalf.
  • If you need access to your money before you retire, your 401(k) plan allows access to your funds through the plan’s withdrawal and loan features. Let’s review these two methods for accessing your money.
  • Although your 401(k) is a retirement plan, it's nice to know if a financial emergency or hardship arises you can withdraw your money from the plan. Should you need access to your 401(k) assets for special circumstances (such as--medical expenses, post-secondary education or payment or foreclosure on your primary residence), you can do so by taking a hardship withdrawal. However, keep in mind that if you do take a hardship withdrawal, you will probably be subject to a 10% penalty-- if under age 59 1/2-- and income taxes on the amount withdrawn. Accessing money through the plan’s loan feature is a much better way of obtaining 401(k) assets since there are no penalties or taxes associated with loans, assuming no default.
  • Should you need access to your retirement savings, you can borrow from your account by taking a loan. You can borrow from your account once per year, for any reason. Generally, you can take a loan for up to 5 years, although residential loans can be taken over a 15 year period. You can borrow up to 50% of your vested account balance or $50,000, whichever is less. (Example: if you have $10,000 vested in your account, you can borrow $5,000). The interest rate you pay is based on the rate published in Barron’s at the end of the month plus 1%, which is competitive in today’s marketplace and fixed for the entire life of the loan. Paying back your loan is convenient. It is done automatically through payroll deductions. Repayment amounts are automatically deducted from yor paycheck so you don’t have to worry about writing a separate check or setting aside money to repay the loan. Since you are borrowing your own money and repaying the loan with interest, you are not subject to a 10% penalty tax and income taxes, unless you default, at which point the loan is considered a withdrawal, subject to withdrawal rules.
  • Although your 401(k) is a retirement plan, it's nice to know if a financial emergency or hardship arises you can withdraw your money from the plan. Should you need access to your 401(k) assets for special circumstances (such as--medical expenses, post-secondary education or payment or foreclosure on your primary residence), you can do so by taking a hardship withdrawal. However, keep in mind that if you do take a hardship withdrawal, you will probably be subject to a 10% penalty-- if under age 59 1/2-- and income taxes on the amount withdrawn. Accessing money through the plan’s loan feature is a much better way of obtaining 401(k) assets since there are no penalties or taxes associated with loans, assuming no default.
  • Like many people, in addition to your 401(k) account, you may have IRAs at a number of different institutions. That means you may be paying more in fees than you should! You may also have an overwhelming amount of statements and paperwork to wade through. And, you probably need to make one phone call after another if you want to move money from one account to another. The good news is that your 401(k) plan provides a convenient way to consolidate all your IRAs. The advantages for you: Everything you need from a single source One consolidated statement for all your retirement plan accounts One phone call to make if you have questions or need assistance 24 hour account access through Pentegra OnLine and Pentegra by Phone Choice of top performing investment options Low investment management fees Special reduced fees for account balances over $350,000 Transferring your IRA is simple. There’s no fee, and we can handle all the paperwork for you.
  • If you terminate employment, you have a number of different options available to you: You can leave the money in the plan (but your account balance must be over $300) and enjoy the same benefits you would as an active employee, You can arrange a direct rollover, or You can request a distribution of your account, however, your distribution is subject to income taxes plus a 10% penalty tax if you are under age 59 1/2
  • Why participate in a 401(k) plan? 401(k) plans are one of the most simple, yet rewarding ways to save for retirement or other financial goals. A 401(k) plan is a pretax savings plan. Contributions re made on a pretax basis. Your employer makes matching contributions to the plan on your behalf. You save on taxes, and reap an immediate 50% return.
  • Hopefully, the presentation has provided some of the tools you will need to get started building a secure future. Remember, if you have questions you can always contact a Pentegra Customer Service Representative at 1-800-872-3473, or your Human Resource Department. Your 401(k) plan is an easy, convenient, and smart way to save. So get started building your financial future today. Good Luck!
  • 08/23/11
  • Pentegra offers a number of ways to help you keep track of your account. You can use our interactive account access system, Pentegra Online, to manage your account and access our financial planning tools. Pentegra OnLine can be accessed through our website, www.pentegra.com. And, if you want to check investment performance you can go to the Investment Information section of our website for daily fund prices, fund descriptions and performance information. Pentegra also provides you with toll-free account access using Pentegra by Phone . You can call this number 24 hours a day, 7 days a week to find out your account balance, check fund performance, make investment changes or project and model your account, and you can also check investment fund performance using Pentegra by Phone. And, you can always speak to a Pentegra representative if you have questions about your account. Each calendar quarter, Pentegra will provide you with a statement. This statement has all the basic information you need to know about your account such as: your contributions, company contributions (if any), total account balance in all funds, as well as vesting information. Your quarterly statement packet also includes quarterly performance information and a financial planning newsletter.
  • Hopefully, the presentation has provided some of the tools you will need to get started building a secure future. Remember, if you have questions you can always contact a Pentegra Customer Service Representative at 1-800-872-3473, or your Human Resource Department. Your 401(k) plan is an easy, convenient, and smart way to save. So get started building your financial future today. Good Luck!
  • Hopefully, the presentation has provided some of the tools you will need to get started building a secure future. Remember, if you have questions you can always contact a Pentegra Customer Service Representative at 1-800-872-3473, or your Human Resource Department. Your 401(k) plan is an easy, convenient, and smart way to save. So get started building your financial future today. Good Luck!
  • De8 asheville savings bank 2011

    1. 1. IT’S YOUR FUTURE— PLAN FOR IT Asheville Savings Bank Retirement Savings Plan Presented by: Jeff Hale, AIFA® Senior Consultant
    2. 2. PLAN FOR YOUR FUTURE <ul><li>Understand how the plan works </li></ul><ul><li>Set your savings goals </li></ul><ul><li>Develop an investment strategy </li></ul><ul><li>Choose your investments </li></ul>
    3. 3. ELIGIBILITY <ul><li>Joining The Plan: </li></ul><ul><li>12 Months of Service during which 1,000 hours have been completed </li></ul><ul><li>Entry Dates are monthly </li></ul>
    4. 4. YOUR CONTRIBUTIONS <ul><li>Pretax Savings </li></ul><ul><li>You choose the amount, from 1% up to 60% of salary </li></ul><ul><li>2011 Maximum is $16,500 </li></ul><ul><li>50 yrs + can make a $5,500 Catch Up </li></ul><ul><li>Flexibility to change contribution rate as often as once per month </li></ul>It’s Completely Flexible:
    5. 5. MATCHING CONTRIBUTIONS <ul><li>Your employer will match 100% of the first 3% that you save, plus 50% of the next 2% you save </li></ul><ul><li>It’s like getting free money! </li></ul><ul><li>If you contribute at least 5% of your pay, the bank will contribute 4% to the plan, that’s an immediate return on your savings. </li></ul>An Immediate Return
    6. 6. VESTING <ul><li>You are always 100% vested in any contributions you make to the plan </li></ul><ul><li>You are 100% vested in employer matching contributions immediately </li></ul>When does the money become mine?
    7. 7. WHAT IF YOU NEED YOUR MONEY? <ul><li>Hardship Withdrawals </li></ul><ul><li>Loans </li></ul><ul><li>In-Service Withdrawals </li></ul>Accessing Your Account
    8. 8. HARDSHIP WITHDRAWALS <ul><li>Allowable only for Specific Situations </li></ul><ul><ul><li>Purchase a Primary Residence </li></ul></ul><ul><ul><li>Prevent eviction or foreclosure on your home </li></ul></ul><ul><ul><li>Un-reimbursed medical expenses </li></ul></ul><ul><ul><li>Tuition expenses </li></ul></ul><ul><ul><li>Funeral expenses </li></ul></ul><ul><ul><li>Qualifying repairs to your principal residence </li></ul></ul><ul><li>Penalties and Taxes to Consider </li></ul>Accessing Your Account
    9. 9. BORROWING FROM YOUR ACCOUNT <ul><li>Up to 50% of Vested Account Balance </li></ul><ul><li>Minimum $1,000, Maximum $50,000 </li></ul><ul><li>Pay back with Prime +1% Interest </li></ul><ul><li>Convenient Repayment Through Payroll Deduction </li></ul>Accessing Your Account
    10. 10. IN-SERVICE WITHDRAWALS <ul><li>Rollover amounts </li></ul><ul><li>Age 59 ½ </li></ul><ul><li>Penalties and Taxes to Consider </li></ul>Accessing Your Account
    11. 11. CAN I ROLLOVER MY IRA ACCOUNT? <ul><li>Rollover amounts from other qualified plans or IRAs </li></ul><ul><li>An easy way to consolidate your retirement accounts for greater convenience, cost-savings and control </li></ul>Consolidate Your Assets
    12. 12. WHAT HAPPENS WHEN I LEAVE? <ul><li>You can leave the money in the plan (account balance must be over $1000) </li></ul><ul><li>You can arrange a direct rollover </li></ul><ul><li>You can set up installment payments </li></ul><ul><li>You can take your money now -- with implications: income taxes,10% penalty tax, if under age 59 1/2, and 20% withholding </li></ul>
    13. 13. SOCIAL SECURITY ISN’T ENOUGH But Your Plan Can Help Bridge The Gap Percentage of Income Replaced by Social Security
    14. 14. SAVING A LITTLE CAN ADD UP TO A LOT!     Hypothetical examples of savings are based on contributions made to a tax-deferred retirement account earnings an 8% annual rate of return compounded at the same rate as contributions over a 25-year period. Your own investment returns may earn more or less than this example. $124,469 $30 week/ $1,560 a year Take out for dinner, once a week $16,608 $4 week/ $208 a year Gourmet coffee, once a week $14,360 $15 month/ $180 a year Compact disc, once a month $41,519 $10 week/ $520 a year Buying lunch, twice a week $9,574 $10 month/ $120 a year Movies, once a month INCREASE SAVINGS BY SAVINGS ITEM
    15. 15. YOUR INVESTMENT STRATEGY <ul><li>Three general asset classes--stocks, bonds and fixed income investments </li></ul><ul><li>Each asset class has different risk and return characteristics </li></ul><ul><li>Determining which are most appropriate for you is the first step in building an investment strategy </li></ul>Understanding Asset Classes    
    16. 16. FIXED INCOME FUNDS <ul><li>Invest in short-term securities issued by banks, corporations, and the U.S. government </li></ul><ul><li>Fixed income investments can protect the value of your money over short periods of time; but run the risk of not keeping up with inflation </li></ul><ul><li>Consider fixed income investments if you are a conservative investor and will need your money in one to three years or to balance a more aggressive portfolio </li></ul> 
    17. 17. BOND FUNDS <ul><li>Invest in bonds and other interest-earning securities issued by governments and corporations </li></ul><ul><li>As interest rates rise and fall, the value of a bond rises and falls in the opposite direction </li></ul><ul><li>Consider bonds if you are willing to accept moderate levels of risk and may not need your money for at least several years </li></ul> 
    18. 18. STOCK FUNDS <ul><li>Invest in shares of stock in companies </li></ul><ul><li>Stocks offer the highest potential return over time, but also involve the greatest amount of risk to your principal. </li></ul><ul><li>Consider stocks if you are investing for the long-term and are comfortable with a higher degree of risk </li></ul> 
    19. 19. HOW $1,000 GREW OVER 31 YEARS (’80 – ’10) Stocks 11.4%, Bonds 8.7%, Fixed Income 5.5%, Inflation 3.4% 1980 2010 $28,077 $13,332 $5,237 $2,858
    20. 20. THINGS TO REMEMBER <ul><li>Generally, the higher an investment’s risk, the higher the potential return </li></ul><ul><li>The greater an investment’s stability, the lower the potential return </li></ul><ul><li>The shorter the time frame you have for investing, the less risky (more conservative) your investments should be </li></ul>About Risk And Return  
    21. 21. Pentegra Offers 2 Ways to Approach Asset Allocation <ul><li>The hands-on, Self-Directed approach </li></ul><ul><li>The easy, hands-off way to invest based on Time Horizon (Target Retirement Funds) </li></ul>
    22. 22. SELF-DIRECTED APPROACH <ul><li>Your plan offers a wide array of investment choices to help you meet your retirement and investment goals </li></ul><ul><li>You can choose to invest in several different investment categories </li></ul>
    23. 23. WHAT’S THE RIGHT ASSET ALLOCATION FOR YOU? Stocks 50-75% Bonds 25-50% Fixed Income 0-25% Stocks 15-50% Bonds 40-75% Fixed Income 10-35% Stocks 0-30% Bonds 40-75% Fixed Income 25-40% Less than 5 Years Stocks 75-100% Bonds 0-25% Stocks 40-60% Bonds 20-40% Fixed Income 20-35% Stocks 30-50% Bonds 25-45% Fixed Income 25-45% 6 to 10 Years Stocks 90-100% Bonds 0-10% Stocks 60-75% Bonds 20-40% Fixed Income 10-25% Stocks 40-60% Bonds 20-40% Fixed Income 20-40% 11 or more Years Aggressive Moderate Conservative Time Frame
    24. 24. T. ROWE PRICE RETIREMENT FUNDS <ul><li>Time horizon based strategies, ready-made investment portfolios </li></ul><ul><li>Allows participants to put their investment strategy on “autopilot” </li></ul><ul><li>The funds invest in more than one asset category to reduce risk through diversification </li></ul><ul><li>Professionally managed, diversified portfolios </li></ul><ul><li>Automatically rebalance to a more conservative strategy as retirement age approaches </li></ul><ul><li>Participants should choose the fund that most closely matches expected year of retirement </li></ul>  The Easy Way To Invest for Retirement
    25. 25. 401(k) Savings Plan Investment Selection Menu
    26. 26. PLAN COMMUNICATIONS <ul><li>Pentegra Online www.pentegra.com </li></ul><ul><li>Voice Response Phone 800-433-4422 </li></ul><ul><li>Live Representatives 800-872-3473 </li></ul><ul><ul><li>(will supply new PIN #) </li></ul></ul><ul><li>Quarterly Statements </li></ul>
    27. 27. PENTEGRA ONLINE <ul><li>Manage your account and perform transaction online </li></ul><ul><li>Access financial planning tools </li></ul><ul><li>Obtain Investment Guidance </li></ul><ul><li>Obtain daily investment performance information </li></ul><ul><li>View investment fund descriptions and historical performance </li></ul><ul><li>Access enrollment & education materials </li></ul><ul><li>Use our convenient library of plan forms </li></ul>www.pentegra.com
    28. 28. PENTEGRA ONLINE
    29. 29. PENTEGRA ONLINE
    30. 30. PENTEGRA ONLINE
    31. 31. PENTEGRA ONLINE
    32. 32. PENTEGRA ONLINE
    33. 33. PENTEGRA ONLINE
    34. 34. PENTEGRA ONLINE
    35. 35. ONLINE ENROLLMENT
    36. 36. ONLINE ENROLLMENT
    37. 37. ONLINE ENROLLMENT
    38. 38. ONLINE ENROLLMENT
    39. 39. ONLINE ENROLLMENT
    40. 40. ONLINE ENROLLMENT
    41. 41. ONLINE ENROLLMENT
    42. 42. ONLINE ENROLLMENT
    43. 43. PENTEGRA ONLINE
    44. 44. PENTEGRA ONLINE
    45. 45. YOUR 401(k) PLAN <ul><li>It’s easy </li></ul><ul><li>It’s convenient </li></ul><ul><li>It’s the smart way to build a secure future </li></ul><ul><li>Start saving today! </li></ul>
    46. 46. YOUR 401(k) PLAN <ul><li>Questions & Answers </li></ul>

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