Maximizing your retirement strategy

Transcription

1 Maximizing your retirement strategy John Hancock Retirement Plan Services, LLC and the I.A..M. National 401(k) Plan are not affiliated and neither are responsible for the liabilities of the other. John Hancock Retirement Plan Services, LLC is also referred to as "John Hancock". I.A.M. National 401(k) Plan

2 Agenda 1 2 Discuss your retirement goals Maximize your retirement strategy Maximizing your retirement strategy page 2

3 DISCUSS Retirement facts Man Woman Source Social Security Administration, Life Expectancy, 2014, ( Maximizing your retirement strategy page 3

4 DISCUSS Retirement facts Only 44% of people saving for retirement have ever calculated how much they will need 1 % of workers expecting to retire before age 65 has decreased % % Employee Benefit Research Institute and Greenwald & Associates, 2014 Retirement Confidence Survey. Maximizing your retirement strategy page 4

5 DISCUSS Your life in retirement Do what you want Spend time with family Hobbies Travel Volunteer work Full retirement Maximizing your retirement strategy page 5

6 Retirement facts: Basic needs Expenses Monthly (today) Annually (today) Monthly* (in 30 years) Annually* (in 30 years) Food $455 $5,463 $1,160 $14,914 Housing $1,232 $14,779 $3,363 $40,347 Clothing $92 $1,101 $251 $3,006 Transportation $579 $6,942 $1,581 $18,952 Entertainment $200 $2,403 $546 $6,560 Total $2,558 $30,688 $6,901 $83,779 * Assumes 3.4% annual inflation. Source: Bureau of Labor Statistics, Consumer Expenditure Survey, Sept 2015 (per household, age 65 and over), data from 2014, rounded to the nearest dollar. All estimates are projections and cannot be guaranteed. Maximizing your retirement strategy page 6

7 MAXIMIZE Ways to increase your savings Use extra cash from Paid-off debts (e.g., credit cards) Put that raise to good use Daily savings opportunities Maximizing your retirement strategy page 7

8 MAXIMIZE Paying off debt Pay as much as you can on your highest interest rate debt Make minimum payments on the other debt Once the highest rate debt is paid off, focus on the next-highest interest debt Don t miss a payment Your credit card company may hit you with late fees and hike your interest rate. Maximizing your retirement strategy page 8

9 MAXIMIZE Increasing your contribution Difference after 30 years Age 35 Salary = $30,000 Saves 8% ($2,400/year) Return 7% Age 35 Salary = $30,000 Saves 6% ($1,800/year) Return 7% $242,575 $181,931 Hypothetical mathematical illustration only. Figures are based on assumptions as set out and individual circumstances may vary. This is a hypothetical example for illustrative purposes only, assuming an annual 7% rate of return and contributions over a 30 year period. There is no guarantee that the results shown will be achieved or maintained over any time period. This example assumes no withdrawals, does not take into account fees associated with investing, which if included, would reduce the account balance, and assumes reinvestment of earnings. Taxes are due upon withdrawal. Figures are based on assumptions as set out and individual circumstances may vary. Maximizing your retirement strategy page 9

10 MAXIMIZE Increasing your contribution Difference after 30 years Age 35 Salary = $50,000 Saves 8% ($4,000/year) Return 7% Age 35 Salary = $50,000 Saves 6% ($3,000/year) Return 7% $404,292 $303,219 Hypothetical mathematical illustration only. Figures are based on assumptions as set out and individual circumstances may vary. This is a hypothetical example for illustrative purposes only, assuming an annual 7% rate of return and contributions over a 30 year period. There is no guarantee that the results shown will be achieved or maintained over any time period. This example assumes no withdrawals, does not take into account fees associated with investing, which if included, would reduce the account balance, and assumes reinvestment of earnings. Taxes are due upon withdrawal. Figures are based on assumptions as set out and individual circumstances may vary. Maximizing your retirement strategy page 10

11 MAXIMIZE How much is enough? Example Age 35 Current salary $25,000 Expected salary at retirement $50,000 Social security will replace 36% of her pre-retirement income during retirement* I estimate this will be my annual income just before retirement so I want to save this much total in the plan $30,000 / year $269,000* $50,000 / year $448,000* Target savings $75,000 / year $672,000* $100,000 / year $896,000* * This is a national average calculated by the Social Security Administration and attendees' benefits (if any) may be higher or lower than this assumption. All projections are estimates and cannot be guaranteed. Maximizing your retirement strategy page 11

12 MAXIMIZE How much is enough? (cont d) I m currently age 35, and my goal is Example My goal is $269,000 My goal is $448,000 My goal is $672,000 11% ($230 / month) 19% ($396 / month) 27% ($563 / month) Goal: contribute 19% of her salary My goal is $896,000 36% ($750 / month) Other ideas for your savings strategy Consider all savings you may have Save in an IRA or nonretirement account Retirement income calculator at mylife.jhrps.com Numbers represent no particular investment; 7% return; monthly compounding; beginning-of-period payments; no taxes; no transaction costs; contribution rate limits may vary by plan; no company match; retirement begins at age 65 and lasts 20 years; no outside savings assumed All estimates are projections and cannot be guaranteed. Maximizing your retirement strategy page 12

13 MAXIMIZE How much is enough? (cont d) Estimate your retirement income Screenshot is for illustration only. All estimates are projections and cannot be guaranteed. Maximizing your retirement strategy page 13

14 MAXIMIZE How much is enough (cont d) Screenshot is for illustration only All estimates are projections and cannot be guaranteed. Maximizing your retirement strategy page 14

15 Power of compounding Investor A Years contributing: Annual amount contributed: $2,000 Investor B Years contributing: Annual amount contributed: $2,000 $80k $60 $40 $20 $63,692 $34,221 Total amount invested Compounded value at year-end 2014 $20,000 $20,000 $ Hypothetical investment in stocks Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index Morningstar. All Rights Reserved. Maximizing your retirement strategy page 15

16 Asset allocation Creating an investment portfolio using different asset categories Stocks Bonds Cash Maximizing your retirement strategy page 16

17 Asset categories CASH BOND STOCK Stable Value Fixed- Income Large-Cap Stock Mid-Cap Stock Small-Cap Stock International Stock LOW Risk/Return Potential HIGH ASSET ALLOCATION / BALANCED As market conditions change, so may the risk/return potential of these investment types. Maximizing your retirement strategy page 17

18 Investment strategy Asset Allocation and Diversification + = Asset Allocation Spreading your money across different kinds of asset classes within your plan (for example: cash, bonds, stocks) Potential gains in one asset class can help offset potential losses in others Diversification Investing in several options within a particular asset class (such as: large-cap value stocks and small-cap growth stocks) Potential gains in one asset can help offset potential losses in others within an overall asset class Your Strategy KEY IDEA Managing Risk Dividing your money across different asset classes and then diversifying your choices within those asset classes helps you develop an investment mix. An investment mix helps you manage risk. Managing risk allows for a more confident and calm approach to investing. Asset allocation and diversification do not ensure a profit or protect against a loss. Maximizing your retirement strategy page 18

19 MAXIMIZE Maximizing your asset allocation Key factors Determine your long term goals How much risk are you willing to take? What is your time horizon? Use online tools to develop a personalized strategy mylife.jhrps.com Maximizing your retirement strategy page 19

20 MAXIMIZE How s your Asset Allocation? Maximizing your retirement strategy page 20

21 MyLifeNow Mobile App ios or Android MyLifeNow mobile Enroll in the plan View account balances and personal rate of return Review your investments by asset class View and change your contribution rate Maximizing your retirement strategy page 21

22 Morningstar Retirement Manager SM An online tool to get help when strategizing for your retirement goals Find out which fund mix may be right for you based on your Plan s investments Understand what percentage you should be contributing to each specific Plan investment option Visit mylife.jhrps.com or call a RPS representative at Morningstar Retirement Manager is offered by and is the property of Morningstar Investment Management, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. and is intended for citizens or legal residents of the United States or its territories. Morningstar Investment Management, LLC is not affiliated with John Hancock Retirement Plan Services LLC. The Morningstar name and logo are registered marks of Morningstar, Inc. John Hancock Retirement Plan Services and Morningstar Investment Management, LLC are not affiliated and neither are responsible for the liabilities of the other. Maximizing your retirement strategy page 22

23 What s next? Complete your worksheet and have it handy Determine how much you need for retirement Evaluate your savings Review your asset allocation Contact John Hancock Retirement Plan Services mylife.jhrps.com or * and Download the app * For your protection, all calls to our representatives are recorded. Maximizing your retirement strategy page 23

24 Questions? Maximizing your retirement strategy page 24

25 Important information IMPORTANT INFORMATION A fund s investment objectives, risks, charges and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact John Hancock Retirement Plan Services LLC at or visit our website at mylife.jhrps.com. Please read the prospectus carefully before investing or sending money. Prospectus may only be available in English. The content of this document is for general information only and is believed to be accurate and reliable as of posting date but may be subject to change. John Hancock does not provide investment, tax, or legal advice. Please consult your own independent advisor as to any investment, tax, or legal statements made herein. John Hancock Retirement Plan Services, LLC offers plan administrative services and service programs through which a sponsor or administrator of a plan may invest in various investment options on behalf of plan participants. These investment options have not been individually selected by John Hancock Retirement Plan Services, LLC. John Hancock Trust Company, LLC provides trust and custodial services to such plans. JH Enterprise is a registered trademark by John Hancock Life Insurance Company (U.S.A.). NOT FDIC INSURED MAY LOSE VALUE NOT BANK GUARANTEED NOT INSURED BY ANY GOVERNMENT AGENCY 2016 All rights reserved. MS-P26016-GE 5/ MS Maximizing your retirement strategy page 25

26 Thank you! Maximizing your retirement strategy page 26