Romain Buick, Inc. 401(k) Plan - PowerPoint Presentation

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Romain Buick, Inc. 401(k) Plan

Zach Hopkins

Sr. Client Consultant

(812) 456-3531

Zach.Hopkins@53.comSlide2
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TODAY’S AGENDA…

Plan Highlights

Asset Allocation and your Investment options

Accessing your account

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Plan Highlights

Eligibility Age 21 and 1,000 hours of service in 12 mos.

Entry dates Calendar quarters (Jan.1, Apr.1, Jul.1, Oct.1)

EE Contributions Employee pre-tax deferrals up to $17,500 (2013)

Employees age 50+ (additional $5,500)Stop contributions anytime, increase or decrease deferrals quarterlyER Contributions Discretionary matching contribution on elective deferrals (50% match on first 4% deferred) Discretionary profit-sharing contributions (1,000 hours of service)Slide5

Plan Highlights (cont.)

Vesting On employer contributions

2 yrs. = 20%

3 yrs. = 50%

4 yrs. or more = 100%Investments Participants direct investment for all contributions. (default investment FMT/Touchstone Conservative Alloc. 35% stock, 65% bonds/cash)Withdrawals Normal retirement age (65), In-service at age 59 and ½, death, disability or termination of employment, hardships availableSlide6

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) Plan

Contributing 0% to the 401(k) Plan

Annual Salary

$30,000

$30,000

Retirement Savings

$1,500

$0

Taxable Income$28,500$30,000Taxes (25%)$7,125$7,500Take-home Pay$21,375$22,500

for a tax break?Slide7

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?Slide8

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 = $150Slide9

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 $37,000Slide10

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

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 ValueTotal Account ValueSlide11

INVESTMENT OPTIONSSlide12

ALLOCATION

…

Asset allocation is the process of dividing your contributions among three basic asset classes: stocks, bonds, and cash equivalents. Slide13

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 Class

Investment 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 IndexFMT/Vanguard Mid Cap IndexFMT/Vanguard Small Cap IndexSlide14

INVESTMENTS AND INFLATION

Source: Ibbotson Associates,

Stocks, Bonds, Bills and Inflation Yearbook 2011

.

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 – 2010

3.0%

InflationSlide15

BEST AND WORST ONE-YEAR RETURNS

Source: Ibbotson Associates,

Stocks, Bonds, Bills and Inflation Yearbook 2011.

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 return

Average return

Largest one-year return

1990 – 2010Slide16

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

1.800.754.9080

Client Service Representatives available Monday to Friday 8:30 AM to 7:00 PM (ET

)

planretire.53.com

Toll-free Participant Services LineSlide17

How do I enroll?

Complete the New Account Form

Complete the Designation of Beneficiary FormSlide18

Q & A

Questions?