ASSET ALLOCATION BUILDER for the Caribou Coffee Retirement Savings Plan

Transcription

1 ASSET ALLOCATION BUILDER for the Caribou Coffee Retirement Savings Plan

2 ASSET ALLOCATION BUILDER A guide to investing Contributing to your retirement can be essential to your future financial security. Your employer provides a retirement plan that can help you get started. By participating in the plan, you are on your way to preparing for your future. This educational guide will provide you with a basic understanding of investing. Step 1: Finding balance As an investor, it is important to find balance. You want stability, but you also want the potential to grow. You may be willing to take on some risk, but only up to a certain point. Diversification and asset allocation can help you meet these conflicting goals. Asset allocation You need to decide how much of your retirement contributions to put in the individual asset classes: stocks, bonds and cash. This is called asset allocation. Diversification Remember the saying, Don t put all your eggs in one basket? That is the basic idea behind diversification. It is all about making sure your retirement portfolio contains a mix of different types of investments. If you have all your retirement funds in one investment and that investment performs poorly, your nest egg could be in trouble. But, if your funds are divided between several investments, poor performance from one investment has less impact on the overall portfolio. For example, you could diversify by investing in one stock, one bond and one money market investment option. If you want to diversify further, your plan might allow you to divide your stock investments by company size (e.g., large-cap, mid-cap and small-cap) or location (e.g., domestic, European, far east or emerging markets). Similarly, your bond investments might be spread among short-term, intermediate-term and high yield investment options. Diversification can help smooth out the ups and downs in your portfolio. Although you might reduce volatility and risk with diversification, you can t eliminate investment risk all together. The use of asset allocation and diversification does not ensure a profit or protect against loss. Note: Each group of investments carry their own unique risks. Before investing, please read each fund prospectus for a detailed explanation of the risks, fees and costs associated with each underlying investment option. How do I get started? If asset allocation and diversification sound complicated, there s help! This guide will direct you through a series of questions designed to help identify your investor profile. Then, using the model portfolios as a guide, you can choose a mix of investments. 2

3 ASSET ALLOCATION BUILDER Step 2: Determining your investor profile This questionnaire will help you select an investor profile based on your personal situation and comfort level with investing. The total score recommends which of the four risk profiles may be appropriate for you. Answer these questions and total your score at the bottom. I expect to begin withdrawing money from my retirement account in: 1 year 2 6 years 7 10 years 11+ years Score Once I begin withdrawing money from my retirement account, I expect the withdrawals to last: I want a lump sum distribution 2 6 years 7 10 years 11+ years Score I would take money out of my retirement savings to pay for a large, unexpected expense. To meet my financial goals, my investments must grow at a high rate of return. I prefer investments that are a low risk, even if the returns are lower than the rate of inflation (the rise in prices over time). I prefer an investment strategy designed to grow steadily and avoid sharp ups and downs. When it comes to investing, protecting the money I have is my highest priority. I am unwilling to wait several years to recover from losses I could incur in an extended down market. I always choose investments with the highest possible return, even if the investments may frequently experience large declines in value because of higher risk. If I had $1,000 invested in an account, and its value dropped to $850 after six months, I would move all my money to a more conservative account. Strongly agree Agree Disagree Strongly disagree Score Transfer your total score to the next page TOTAL 3

4 Your total score from the previous page TOTAL Step 3: Selecting an investor model to suit your investor profile type The following models have been created specifically for Caribou Coffee by the plan s registered investment advisor. Use your score from the previous page to identify the corresponding profile that may be suited for your retirement investments. Investor Models Pre-retirement growth strategy Score The pre-retirement growth strategy seeks to provide high current income and moderate long-term capital appreciation. n Stable Value 14% n Bonds 28% n Domestic Stocks 42% n International Stocks 16% Conservative growth strategy Score The conservative growth strategy seeks to provide above average capital appreciation and a moderate level of current income. n Stable Value 10% n Bonds 24% n Domestic Stocks 46% n International Stocks 20% Note: While diversification through an asset allocation strategy is a useful technique that can help to manage overall portfolio risk and volatility, there is no certainty or assurance that a diversified portfolio will enhance overall return or outperform one that is not diversified. An investment made according to asset allocation models neither guarantees a profit nor eliminates the possibility of loss. 4

5 ASSET ALLOCATION BUILDER Investor Models (continued) Moderate growth strategy Score The moderate growth strategy seeks to provide high long-term capital appreciation with low current income. n Stable Value 6% n Bonds 14% n Domestic Stocks 56% n International Stocks 24% Aggressive growth strategy Score The aggressive growth investment strategy seeks to provide high long-term capital appreciation with a very low current income. n Stable Value 1% n Bonds 9% n Domestic Stocks 62% n International Stocks 28% Note: While diversification through an asset allocation strategy is a useful technique that can help to manage overall portfolio risk and volatility, there is no certainty or assurance that a diversified portfolio will enhance overall return or outperform one that is not diversified. An investment made according to asset allocation models neither guarantees a profit nor eliminates the possibility of loss. The custom models for the Caribou Coffee Retirement Savings Plan were created by the plan s financial professional: Stacie Freeman, Hays Companies, 80 South 8th Street, Suite 700, Minneapolis, MN 55402, sfreeman@hayscompanies.com, Hays Companies are not an affiliate of McCready and Keene and is not a OneAmerica company. 5

6 Step 4: Maintaining your goals Determining your asset allocation strategy isn t the end of the road. You should also review your choices regularly. Rebalancing Because some investments may perform better than others, over time your portfolio can shift away from your initial allocation. If left unadjusted, your portfolio could become either increasingly risky or conservative. By periodically reviewing your asset allocation, you can rebalance your portfolio and bring your investment mix back in line with your retirement goals. Re-evaluating your situation Certain life events may change your risk tolerance and retirement goals. Any of these events might signal a need to re-evaluate your investment choices: Marriage Birth of a child Change of employment for you or your spouse Divorce Windfalls (inheritance, gift or winnings) Financial emergency Empty nest Death of a spouse Approaching retirement Note: Investment information is provided for educational purposes only. McCready and Keene provides administrative and recordkeeping services and is not a broker/dealer or an investment advisor. Neither McCready and Keene nor its representatives provide tax, legal fiduciary or investment advice. Mutual funds are sold by prospectus. To obtain a copy of the prospectus, the participant should contact the plan s investment advisor or the mutual fund company directly. Before investing, carefully consider the fund s investment objectives, risks, charges, and expenses. The underlying fund prospectuses contain this and other important information. Read the prospectuses carefully before investing. Investing in international markets involves risks not associated with investing solely in the U.S., such as currency fluctuation, potential political and diplomatic instability, liquidity risks, and differences in accounting, taxes, and regulations. Bond funds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the fund. It is also a good idea to reassess your investment choices on an annual basis. This annual review can help you determine whether you are still headed in the right direction. 6

7 You can adjust your asset allocation or change your investment choices at any time by logging into your account at

8 About OneAmerica A national leader in the insurance and financial services marketplace for 140 years, the companies of OneAmerica help customers build and protect their financial futures. OneAmerica offers a variety of products and services to serve the financial needs of their policyholders and customers. These products include retirement plan products and recordkeeping services, individual life insurance, annuities, asset based long-term care solutions and employee benefit plan products. Products are issued and underwritten by the companies of OneAmerica and distributed through a nationwide network of employees, agents, brokers and other sources that are committed to providing value to our customers. To learn more about our products, services and the companies of OneAmerica, visit OneAmerica.com/companies. McCready and Keene, Inc. a OneAmerica company 7941 Castleway Drive Indianapolis, IN OneAmerica Financial Partners, Inc. All rights reserved. OneAmerica and the OneAmerica banner are all registered trademarks of OneAmerica Financial Partners, Inc. R /14/17