Investment Series Part 2: Managing Your Portfolio and Using Your Account. Presented by: Debbie Rochester

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1 Investment Series Part 2: Managing Your Portfolio and Using Your Account Presented by: Debbie Rochester

2 Today s Agenda Understand Why We Invest Locate Investment Information Create and Review Your Plan Make Changes to Your Investments Learn Contribution and Tax Considerations Build a Withdrawal Strategy MERS of Michigan 3

3 Understand Why We Invest

4 Reach a Goal Like most things that grow, investments need regular care and attention. MERS of Michigan 5

5 Reach Retirement MERS of Michigan 6

6 Stay on Track Retirement MERS of Michigan 7

7 Locate Investment Information

8 General Investment Information MERS of Michigan 9

9 MERS Investment Menu Summary MERS of Michigan 10

10 MERS Individual Fund Sheets MERS of Michigan 11

11 Your mymers Account MERS of Michigan 12

12 Your Account Overview $44, % 3.74% 0 $0.00 MERS of Michigan 13

13 Your Quarterly Statement - Overview MERS of Michigan 14

14 Your Quarterly Statement - Investments MERS of Michigan 15

15 Evaluate Your Asset Allocation MERS of Michigan 16 $44, , %

16 Evaluate Your Asset Allocation, cont d Short-Term Investment Gains Contributions Long-Term $40, $2, $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $1, $44, Contributions Investment Gains MERS of Michigan 17

17 Evaluate Your Fund Performance Available through 4/30/ April % These returns are calculated from 01/01/2018 thru 4/30/ % 3.07% 3.74% 14.18% MERS of Michigan 18

18 Personal Fund Performance Factors used to calculate your personal rate of return. % MERS of Michigan 19

19 Create and Review Your Plan

20 Meet Mary & John Mary s Profile Current Age 30 Retirement Age 62 Income $46,000 Savings $42,500 Contribution Rate 10% Employer Match Up to 5% Risk Profile Conservative John s Profile Current Age 33 Retirement Age 65 Income $38,000 Savings $11,000 Contribution Rate 3% Employer Match Up to 5% Risk Profile Aggressive MERS of Michigan 21

21 Full Picture Report Builder MERS of Michigan 22

22 Enter Your Information Full Picture Report Builder Information already entered: Age Income MERS Benefits Information you may add: Spouse s Information Outside Accounts Other Contributions MERS of Michigan 23

23 Investment Approach Choose the investment approach that best fits how involved you want to be with your investments. MERS of Michigan 24

24 Risk Tolerance Assessment Determine how much risk you are willing to take MERS of Michigan 25

25 Sample Question MERS of Michigan 26

26 Suggested Investments Learn the investment strategy the Full Picture report builder creates for you. Mary s Current Strategy Mary s Suggested Strategy MERS of Michigan 27

27 Suggested Investments, cont d MERS of Michigan 28

28 Make Changes to Your Investments

29 Types of Investment Changes MERS of Michigan 30

30 Investment Changes Explained Current Account Balance: $44,776 ($22,388 for 50%) Future Contributions: $ per pay MERS of Michigan 31

31 Rebalancing We ll do it all for you! 30% Bonds 50% Bonds 50% Stocks 70% Stocks MERS of Michigan 32

32 Learn Contribution & Tax Considerations

33 Contributions, Withdrawals and Taxes MERS of Michigan 34

34 Pre-Tax Contributions Taxes Withdrawal Money MERS of Michigan 35

35 Roth (After-Tax) Contributions Taxes Withdrawal Money MERS of Michigan 36

36 Tax-Free Contributions Withdrawal Money MERS of Michigan 37

37 Build a Withdrawal Strategy

38 Distribution Options Lump Sum Equal Payments As Needed MERS of Michigan 39

39 Withdrawal Factors Longevity Inflation Investments MERS of Michigan 40

40 Longevity 65-year-old Male 65-year-old Female 65-year-old Couple Life Expectancy 86 years 88 years 92 years Target Age to Save For 92 years 94 years 96 years Source: Society of Actuaries RP-2014 Mortality Tables. Life Expectancy is 50% of living to this age. Target Age to Save For is 25% of living to this age. MERS of Michigan 41

41 Inflation Expenses at Age 60 Impact of Inflation $7,136 $1,720 $4,031 $5,000 $5,000 $5,000 $5, Example shows the impact of inflation at 3% a year. MERS of Michigan 42

42 Investments Continue to reduce risk on your accumulated balance MERS of Michigan 43

43 Investments Should I move all of my retirement savings into the lowest risk investment? How Long Would Monthly Payments Last? 95 Years Old 86 Years Old 3.0% Return 5.5% Return Example: Participant retires at age 60, and draws down a $500,000 account balance by taking a $2,000 monthly payment, adjusting it upward with inflation at 3.0% each year. MERS of Michigan 44

44 Please Complete a Session Survey! Step 1: Locate and access the Schedule Icon Step 2: Select the session you just attended (look for correct date and time) Step 3: Scroll down and click Breakout Session Survey to complete the survey MERS of Michigan 46