0
Presented by: Rick Scruggs,
CLU, ChFC
Sonny Merryman, Inc. 401(k) Plan
1
What is
“Retirement
Success?”
2
 Retire with 70% of your final
compensation at Full Social
Security Age. Adjusted for
inf...
LIVING PROOF
THAT WE ALL
NEED TO PLAN
FOR A LONGER
RETIREMENT
“A typical American city.
400 people. And a
fascinating expe...
Are you ready for your
“longevity bonus”?
Average Life expectancy increased from about
age 48 in 1900 to about age 78 toda...
What will you live on during retirement ?
*Your Social Security
*Your own personal savings
*Your company’s 401(k) plan
5
Questions To Ask Yourself
 Will my social Security be enough?
 How long will I need my retirement income?
 Does it real...
Social Security
7
 41 Million Social Security checks are sent out
each month.
 - The average check in the United States ...
8
Lifetime Social Security Benefits
Assumes income at Age 55 and inflation adjustment of 2.5%.
Annual Income $40,000 $75,0...
Five Behaviors Detrimental to Success
9
1. Inertia
2. Procrastination
3. Choice Overload
4. Endorsement Effect
5. Framing
What would you be willing to do for
financial success?
10
 Luckily, you don’t have
to go to any extremes.
There are basic...
1. Pay yourself first
11
 The foundation of financial
success is to spend less
than you earn.
 Do it and success is just...
2. Start Early
12
 The young have an incredible advantage in investing—Time.
 Three things that help determine how much ...
3. Don’t get emotional
13
EUPHORIC
CONFIDENT
UPBEAT
NERVOUS
DEFEATED
SCARED
ENCOURAGED
BEST OPPORTUNITY
TO MAKE MONEY
4. Don’t touch the 401(k)
14
If you paid for your vacation
with a withdrawal from your
401(k), all 4 were right.
You could...
5. Needs vs. wants
15
How you choose to meet your needs has a dramatic impact on the amount you can save and invest. If
yo...
A Small Increase Can Have a Big Impact
16
$28,573
$57,147
$85,720$30,000
$60,000
$60,000
$0.00
$50,000.00
$100,000.00
$150...
The Annual Review – keeping you on track
17
 Are you maxing out your contributions?
 If you’re over 50, are you taking a...
REMEMBER….
Retirement
planning is
not just a one
time event!
18
Tools for Staying
on Track
-UnifiedPlan Statement
19
Page 1
Page 4
Tools for Staying
on Track
Unified Trust Financial
Resource Center
20
Financial Designs
21
Full- Service
local, Independent, and
qualified Advisory
firm, servicing
employees/participants of
re...
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Smi 401k employee workshop 8.9.13

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Transcript of "Smi 401k employee workshop 8.9.13"

  1. 1. Presented by: Rick Scruggs, CLU, ChFC Sonny Merryman, Inc. 401(k) Plan 1
  2. 2. What is “Retirement Success?” 2  Retire with 70% of your final compensation at Full Social Security Age. Adjusted for inflation and integrated with Social Security benefits.
  3. 3. LIVING PROOF THAT WE ALL NEED TO PLAN FOR A LONGER RETIREMENT “A typical American city. 400 people. And a fascinating experiment. We asked everyday people to show us the age of the oldest person they’ve known by placing a sticker on our chart. Living proof that we are living longer. Which means we’ll need more money to live in retirement.” Source: Prudential Financial, Inc. 20133
  4. 4. Are you ready for your “longevity bonus”? Average Life expectancy increased from about age 48 in 1900 to about age 78 today A person who reaches age 65 today can reasonably expect to live another 20 years on average—until about age 85! Have you saved enough to live well after age 65? 4 Source: Ken Dychtwald, Ph.D; Founder & CEO of Age Wave http://en.wikipedia.org/wiki/Ken_Dychtwald
  5. 5. What will you live on during retirement ? *Your Social Security *Your own personal savings *Your company’s 401(k) plan 5
  6. 6. Questions To Ask Yourself  Will my social Security be enough?  How long will I need my retirement income?  Does it really matter WHEN I start saving through the 401(k) plan?  Am I on track to be able to make it during retirement? 6
  7. 7. Social Security 7  41 Million Social Security checks are sent out each month.  - The average check in the United States in 2012 was $1,230, while the maximum was $2,513 when taken at Full Retirement age.  - If you’re married there are 567 options for claiming your benefits.
  8. 8. 8 Lifetime Social Security Benefits Assumes income at Age 55 and inflation adjustment of 2.5%. Annual Income $40,000 $75,000 $120,000 Single $1,200 $2,000 $2,500 Live to 86 $511,989 $853,299 $1,066,626 Married $1,800 $3,000 $3,750 Live to 92 $1,180,782 $1,967,971 $4,087,078
  9. 9. Five Behaviors Detrimental to Success 9 1. Inertia 2. Procrastination 3. Choice Overload 4. Endorsement Effect 5. Framing
  10. 10. What would you be willing to do for financial success? 10  Luckily, you don’t have to go to any extremes. There are basic strategies that may help you be financially secure.  1. Pay yourself first  2. Start Early  4. Don’t get emotional  5. Don’t touch the 401(k)  6. Needs vs. wants
  11. 11. 1. Pay yourself first 11  The foundation of financial success is to spend less than you earn.  Do it and success is just a matter of time as you steadily build wealth. If you don’t, financial success excludes you, no matter how much money you make.
  12. 12. 2. Start Early 12  The young have an incredible advantage in investing—Time.  Three things that help determine how much an investment will be worth:  1. The amount invested  2. The rate of return  3. How long the money is invested Example: Assume you want to retire by age 65 assuming a return of 5% and a monthly contribution of $250 Starting Age Account Value at Age 65 25 $383,095 35 $208,932 45 $103,187 55 $38,982
  13. 13. 3. Don’t get emotional 13 EUPHORIC CONFIDENT UPBEAT NERVOUS DEFEATED SCARED ENCOURAGED BEST OPPORTUNITY TO MAKE MONEY
  14. 14. 4. Don’t touch the 401(k) 14 If you paid for your vacation with a withdrawal from your 401(k), all 4 were right. You could cash out your old 401(k), but how much will it cost? Example: Cashing out for a vacation $5,000? $73,000? $8,000? $45,000? Rule of 77
  15. 15. 5. Needs vs. wants 15 How you choose to meet your needs has a dramatic impact on the amount you can save and invest. If you’re not saving enough, switch to the cheaper option in a couple of areas and invest the money you save. It’s not that you shouldn’t even choose the expensive option; it’s that you should limit your splurges to what really matters to you. Transportation Housing Food Luxury Car: $700/mo Sensible Car: $300/mo Dining Out: $40/person Dining In: $14/person Luxury Home: $1,900/mo Nice Home: $850/mo
  16. 16. A Small Increase Can Have a Big Impact 16 $28,573 $57,147 $85,720$30,000 $60,000 $60,000 $0.00 $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $100/mo. Contribution $200/mo. Contribution $300/mo. Contribution Compound Earnings Total Contributions Based on a 5% annual compound interest and monthly contributions over a 25-year period. This hypothetical example is for illustrative purposes only. There is no guarantee that the results shown will be achieved or maintained over any time period. This example assumes all other variables are the same except the amounts being contributed.
  17. 17. The Annual Review – keeping you on track 17  Are you maxing out your contributions?  If you’re over 50, are you taking advantage of catch-up contributions?  Did your marital status change?  Do you have other retirement savings you may want to consolidate into one account?  Are your beneficiaries up-to-date?
  18. 18. REMEMBER…. Retirement planning is not just a one time event! 18
  19. 19. Tools for Staying on Track -UnifiedPlan Statement 19 Page 1 Page 4
  20. 20. Tools for Staying on Track Unified Trust Financial Resource Center 20
  21. 21. Financial Designs 21 Full- Service local, Independent, and qualified Advisory firm, servicing employees/participants of retirement plans as well as providing individual financial planning. Experienced Qualified Independent Full-Service Professional
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