Saving Through Your Employer's Plan 0714

Planning your future...today®
Saving and Investing
Through Your Employer’s
Retirement Plan
Plan Today
Enjoy Tomorrow
Smart Strategies for Retirement Planning
© 2014 PlanMember Financial Corporation

2
Disclosures
This presentation is intended for general information purposes only and does not and is not intended to provide
specific investment advice or recommendations for any individual. It is suggested that you consult with your tax,
legal and/or financial services professional regarding your individual situation. Material presented is believed to
be from reliable sources, and PSEC makes no representation as to its accuracy or completeness.
The use of diversification/asset allocation as part of your investment strategy neither assures nor guarantees
better performance and cannot protect against loss in declining markets.
Investors should carefully consider the investment objectives, risks, charges and expenses of a mutual fund before
investing. This and other important information is contained in the prospectuses or summary prospectuses,
which can be obtained from your PlanMember Program Representative and should be read carefully before
investing. All investments may involve risk including possible loss of principal.
Investors should consider the investment objectives of the variable annuity carefully before investing. An
investment in a variable annuity involves investment risk, including possible loss of principal. Variable annuities
are designed for long-term investing. The contract, when redeemed, may be worth more or less than the total
amount invested. Variable annuities are subject to insurance related charges including mortality and expense
charges, administrative fees, and the expenses associated with the underlying funds. Withdrawals prior to age
59 ½ may result in a 10% IRS tax penalty, in addition to any ordinary income tax. The guarantee of the annuity
is backed by the financial strength of the underlying insurance company. Investment sub-account value will
fluctuate with changes market conditions.
You should carefully consider the investment objectives, risks, charges and expenses of a variable
annuity and its underlying investment options before investing. For a copy of the prospectus for the
annuity and its underlying investments, which contains this and other information about variable
annuities, contact your PlanMember Program Representative. Read the prospectus carefully before
you invest.

3
Disclosures
Fixed indexed annuities are insurance contracts and do not directly participate in any stock, bond or equity
investments. You are not buying any shares of Stocks, bonds or shares of an index. The Market index value does
not include the dividends paid on the underlying market index. These dividends are also not reflected in any
indexed interest that may be credited to your contact. Such contracts have substantial variation in terms, costs
of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to
carefully review a fixed index annuity for its features, costs, and risk and how the variables are calculated. Any
guarantees are backed by the financial strength of the insurance company.
There may be a surrender charge imposed during the first 5 to 7 years that you own a fixed annuity contract.
Withdrawals prior to age 59½ may result in a 10% federal tax penalty, in addition to any ordinary income tax.
Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this
income will keep up with inflation.
The tax-deferred feature of an annuity should not be a factor in purchasing an annuity in a tax-qualified plan.
Tax deferral is provided by the plan and the tax-deferral of the annuity does not provide any additional benefit.
Annuities are subject to additional fees and expenses to which other tax-qualified funding vehicles may not be
subject. Individuals should only purchase an annuity in a qualified plan when its other benefits, such as lifetime
income payments, family protection through death benefits, and/or guaranteed fees meet their current needs.
Investments are: • Not a deposit • Not FDIC or NCUS/NCUSIF insured • Not bank or credit union
guaranteed • Not Insured by any federal government agency • May lose value
Representatives registered with and offer only securities and advisory services through PlanMember Securities
Corporation. A registered broker/dealer, investment advisor and member FINRA/SIPC.

4
• Why you Need to Save
• Basics of 403(b) and 457(b) Plans
• Basic Investment Vehicles
• Investment Risk and Return
• Asset Allocation Fundamentals
• Importance of Discipline
• The Cost of Waiting
The Basics of Investing for Retirement
Agenda

5
Why Do I Need to Save?
Your Standard of Living Depends on It!
1. Fast Facts and Figures about Social Security 2013.
2. CalSTRS Fast Facts for the period ending June 30, 2013.
Applies to applicants in the California State Teachers
Retirement System only. Other State Retirement
System benefits will vary.
• Social Security accounts for only 36% of average
recipients retirement income1
• State Retirement System benefits provide only 49.8%
of average applicant’s average three-year salary2
• Social Security and State Retirement System
benefits expected to be reduced in future years

6
• Primary retirement plan for public schools and
nonprofit employers
• Contributions made through automatic payroll
deductions on pre-tax and/or after-tax (Roth) basis*
• Investments grow tax-deferred
• Portable in the event employment changes
• Penalty-free withdrawals at age 591
/2,
for qualifying hardship situations
• Required minimum annual distributions
(RMD) begin at age 701
/2
*Roth option not available through all plans.
What is a 403(b) Plan?
The Basics

7
• Voluntary retirement plan offered by
governmental and other tax-exempt
employers
• Identical contribution features, RMDs,
and tax advantages as 403(b) plans
• Contributions do NOT affect limits
to 403(b) plan
• Could be primary or secondary plan
Unlike a 403(b) plan:
• Can be made available to select employees
• Penalty-free withdrawals anytime after severance of employment
• Generally fewer investment provider options
What is a 457(b) Plan?
The Basics

8
• Contributions automatically deducted from paycheck through
salary reduction
• Contributions invested in the mutual fund and/or annuity
products you choose from the plan’s approved
providers
• Provides a variety of powerful tax advantages
• Transfer assets from account(s) at previous
employers or from providers formerly available
through the plan
How do the Plans Work?
An Easy, Systematic Way to Save for Retirement
Before investing, carefully read the prospectus(es) or summary prospectus(es) which contain information about
investment objectives, risks, charges, expenses and other information all of which should be carefully considered. For
current prospectus(es) call (800) 874-6910. Investing involves risk. The investment return and principal value will
fluctuate and, when redeemed, the investment may be worth more or less than the original purchase price.
Asset allocation or the use of an investment advisor does not ensure a profit nor guarantee against loss.

9
Tax Advantages
Pre-tax Contributions
• Contributions taken from
paycheck before income taxes
are deducted
• Reduce current income taxes
• Contribute amounts greater
than the reduction in your
paycheck
This hypothetical example is for illustrative purposes
only and each person’s situation is different.Assumes 25% federal and state income and payroll taxes.
Gross Pay $3,000 $3,000
403(b) Plan
Contribution $300 $0
Taxes $675 $750
Take-Home
Pay $2,025 $2,250
Reduction in
Take-Home Pay $225 $0
With $300 Pre-tax
Plan Contribution
With No Plan
Contribution
The Advantage of
Pre-Tax Contributions

10
• Contributions taken from paycheck after
income taxes are deducted
• Qualified withdrawals are free of income taxes
• Ideal for those who will most likely be in a
higher tax bracket in retirement
• No required annual minimum distributions
if rolled into a Roth IRA before age 701/2
• More flexible for use in a retirement income
strategy
• Potential to pass along more to heirs
*Roth option not available through all plans.
Tax Advantages
After-tax“Roth”Contributions*

11
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
After 10 Years After 20 Years After 30 Years
Tax Advantages
Tax-Deferred Investment Growth
Assumes $300
contribution per
month, 6% annual
compound growth,
25% tax rate.
This hypothetical
example is for
illustrative purposes
only and each person’s
situation is different.
$45,306
$115,665
$136,694
$293,777
$224,931
$48,979
The Advantage of Tax-Deferred Investment Growth
After Tax
Tax Deferred

12
• Age 591
/2
• Certain hardship events
• Disability
• Death
• QDRO
• Severance of employment at
any age (457(b) plans only)
When Can I Take a Distribution?
Penalty-Free Plan Withdrawals

13
• Represents shares of
ownership in public
companies
• Best long-term
growth potential but
highest short-term
volatility
• Small, medium and
large-company,value
and growth styles,
domestic and foreign
issuers
Basic Investment Types
Stocks Bonds1
1.Bondsareaffected bychangesininterest
rates, credit conditions, and inflation. As
interest rates rise, prices of bonds fall.
Long-term bonds are more are more
sensitive to interest rate risks than short-
term bonds, while lower-rated bonds may
offer higher yields in return for more risk.
• Also known as cash
• Earn income in the
form of interest
payments
• Offers lowest growth
potential but provides
lowest volatility
• Seeks to maintain $1
share value at all times
2. Mutual funds and money market funds
are not insured or guaranteed by the
Federal Deposit Insurance Corporation or
any other government agency. Although
money market funds seek to preserve the
value of $1 per share, it is possible to lose
money by investing in these funds.
Money Market Funds2
• Earns income from
interest payments
• Low to moderate
long-term growth
potential with lower
short-term volatility
• Short-term to long-
term maturities,
Governmental,
Corporate, Municipal
and High Yield

14
• Professionally managed pool of
stocks, bonds, money markets
and/or other investments
• Investors purchase fund shares
• Provide growth through increase
in share price and/or income
through interest and capital gains
• Index vs. actively managed funds
• Different share classes
• Objective, policies, expenses, fees, performance and other
information found in fund prospectus
What is a Mutual Fund?
The Most Common Retirement Investment Vehicle

15
Primary Use and Benefit: A contract sold by an insurance company
designed to provide tax-deferred growth, guaranteed interested rates* and a
steady stream of guaranteed income* upon annuitization
Annuitization: The process of converting an
annuity investment into a series of guaranteed*
periodic income payments
Optional Features: May be able to purchase
additional “riders” for optional features
Fees and Expenses: Mortality & expense, surrender charges,
rider and other contract fees
Fixed, variable, income and index
*Guarantees and benefits subject to the claims-paying ability of the underlying insurance company. Guaranteed interest rates not
available through all annuity types.
What is an Annuity?
The Basics

16
$1,400,000
Growth of $10,000 Investment since 1964
Financial Market Performance
From January 1, 1964 to December 31, 2013
Large-company stocks measured by the Standard & Poor’s 500 index, long-term government bonds by a one-bond portfolio
with approximate maturity of 20 years, cash by a one-treasury bill portfolio with approximate maturity of 30 days and
inflation by the Consumer Price Index. It is not possible to invest directly in an index. All results assume reinvestment of
dividends on stocks or coupons on bonds and assume no taxes. Source: Ibbotson Associates. Graph is for illustration purposes
only and does not predict or depict any investment option offered through the PlanMember Services Program.
Stocks Bonds 7% Fixed Money Market Inflation5% Fixed
$400,000
$600,000
$800,000
$1,154,670
$328,217
$294,570
$121,021
$114,674
$75,816
$200,000
$1,000,000
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2012
2013
2010
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
1
9
6
3
1
9
6
5
1
9
6
7
1
9
6
9
1
9
7
1
1
9
7
3
1
9
7
5
1
9
7
7
1
9
7
9
1
9
8
1
1
9
8
3
1
9
8
5
1
9
8
7
1
9
8
9
1
9
9
1
1
9
9
3
1
9
9
5
1
9
9
7
1
9
9
9
2
0
0
1
2
0
0
3
2
0
0
5
2
0
0
7
2
0
0
9
2
0
1
1
2
0
1
3
$1,200,000
Investment Risk and Return
Historical Financial Market Growth
Large-company stocks measured by the Standard & Poor’s 500 index, bonds by a one-bond long-term government bond portfolio with
approximate maturity of 20 years, money market by a one-treasury bill portfolio with approximate maturity of 30 days and inflation by the
Consumer Price Index. It is not possible to invest directly in and index. Past performance is not a guarantee of future results. All results assume
reinvestment of dividends on stocks or coupons on bonds and assume no taxes. Source: Ibbotson Associates.
Stocks Bonds 7% Fixed Money Market Inflation5% Fixed
Growth of $10,000 From January 1, 1964- December 31, 2013

17
Investment Types Have Different Risks
Lower
Risk
Market Risk
Inflation Risk
Lower
Risk
Higher
Risk
Higher
Risk
Money Market
Funds
Money Market
Funds
Bonds
Bonds
Stocks
Stocks

18
Risk Tolerance Considerations
• Inflation risk mitigated through stocks
and other investments that have
historically out-paced inflation over
the long term
• Investors with longer investment horizons
can reduce risk by investing more in
stocks to capture historically superior
long-term returns
• Investors with shorter horizons can guard
against volatility through more stable
bond and money market investments

19
General Considerations:
• Your current age
• The age at which you
will begin withdrawing
your investments
• Your personal feelings
and emotions concerning
investment volatility
Determining Your Personal Risk Tolerance

20
• Hypothetical investor Mary,
age 25 and is just starting to
invest for retirement
• Has more than a 40 year
investment horizon. Wants to maximize long-
term growth of nest egg
• Works with financial professional to construct
a mutual fund portfolio of small, medium and
large-company U.S. stock funds as well as
international stock funds
Constructing Your Asset Allocation
Case Study 1
Large-Company
Stock Funds
Small-Company
Stock Funds
Medium-Company
Stock Funds
International
Stock Funds
For illustration purposes only.

Large-Company
Stock Funds
Small-Company
Stock Funds
Medium-Company
Stock Funds
International
Stock Funds
This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required
for some investments. Using diversification/asset allocation as part of your investment strategy neither assures nor
guarantees better performance and cannot protect against loss in declining markets.

21
• Hypothetical investor Bill,
age 49
• Wants to start cushioning his
nest egg from stock market
volatility
a mutual fund portfolio of large and
medium-company stock funds, along with
bond and money market funds
Case Study 2
Large-Company
Stock Funds
Long-Term
Bond funds
Medium-Company
Stock Funds
Short/Medium-Term
Bond Funds
Short/Medium-Term
Bond Funds

Large-Company
Stock Funds
Long-Term
Bond Funds
Money Market
Funds
Medium-Company
Stock Funds
Short/Medium-
Term Bond Funds
This example does not represent any specific product, nor does it reflect sales charges or other expenses that may be required
for some investments. Using diversification/asset allocation as part of your investment strategy neither assures nor
guarantees better performance and cannot protect against loss in declining markets.

22
Case Study 3
• Hypothetical investor Mary,
age 61 and wants to retire in a
few years
• Wants a strategy to help
ensure that at least her current principal
is available when she retires regardless of
market performance
portfolio that blends a guaranteed fixed annuity*
with mutual funds, large and medium-company
stock funds, along with bond funds
Case Study 3
Large-Company
Stock Funds
Long-Term
Bond funds
Guaranteed
Fixed Annuity*
Short/Medium-Term
Bond Funds
Medium-Company
Stock Funds

Guaranteed
Fixed Annuity*
Short/Medium-
Term Bond Funds
Large-Company
Stock Funds
Long-Term
Bond Funds
Medium-Company
Stock Funds
*Guarantees and benefits subject to the claims-paying ability of the underlying insurance company.
Using diversification/asset allocation as part of your investment strategy neither assures nor guarantees better performance and
cannot protect against loss in declining markets.
This example does not represent any
specific product, nor does it reflect
sales charges or other expenses that
may be required for some investments.

23
• Not getting started early
• Buying investments after the
market has made big gains
• Selling investments after the
market has declined
• Overreacting to short-term
market events
• Failing to stick to a long-term investment strategy
• Assuming too much risk by failing to prudently diversify
The Importance of Discipline
Common Mistakes Made by Individual Investors

24
The Importance of Discipline
Market Timing is a Recipe for Failure
Source: Google Finance and PlanMember Securities Corporation. Results shown reflect share price changes only
and do not include taxes or the reinvestment of capital gains and dividends. Past performance is not a guarantee
of future results. It is not possible to invest directly in an index.
S&P 500 Index Average Annual Returns
January 1, 2004 – December 31, 2013
Fully
Invested
7.14%
Minus Best
10 Days
.31%
Minus Best
20 Days
-3.87%
Minus Best
30 Days
-7.36%

25
Time is Your Most Valuable Asset
The Cost of Waiting
Hypothetical Saver Lisa
• Age 21
• Begins saving
$3,000 annually
• Stops savings at 36
(15 years)
• Account Value at age
66 is $425,119
Hypothetical Saver Jim
• Age 36
• Begins saving
$3,000 annually
• Stops savings at 66
(30 years)
• Account Value at age
66 is $251,405
*Example assumes hypothetical 6%
annually compounded tax-deferred growth.
Example is for illustrative purposes only.
Actual return may be higher or lower.
A $173,000 Mistake
Annual
Contribution $3,000 $3,000
Number
of Years 15 30
Total
Investment $45,000 $90,000
Accumulated
value
at age 66 $425,119 $251,405
Lisa
AGE 21
Jim
AGE 36

26
• Review the approved providers in the district’s plan and
what investment services and vehicles they provide
• Review your current investments to see how your
portfolio is currently allocated
• Request a complimentary Plan & Savings Analysis to help
you determine if any adjustments should be made to your
saving and investment strategy
Investors should carefully consider the investment objectives, risks, charges and expenses. This and
other important information is contained in the prospectuses or summary prospectuses, which can be
obtained from your PlanMember Program Representative and should be read carefully before investing.
Asset allocation or the use of an investment advisor does not ensure a profit nor guarantee against a loss.
What is Next?
Action Steps

Saving Through Your Employer's Plan 0714

Recommended

Recommended

More Related Content

What's hot

What's hot (18)

Similar to Saving Through Your Employer's Plan 0714

Similar to Saving Through Your Employer's Plan 0714 (20)

Recently uploaded

Recently uploaded (20)

Saving Through Your Employer's Plan 0714