presented by Ron Kirkpatrick President LBG Advisors

Transcription

1 presented by Ron Kirkpatrick President LBG Advisors Securities fered through Kestra Investment Services, LLC (Kestra IS), member firm FINRA/SIPC. Investment advisory services fered through Kestra Advisory Services, LLC (Kestra AS), an affiliate Kestra IS. LBG Advisors is a member firm Benefits Partners. Kestra IS and Kestra AS are not affiliated with LBG Advisors or Benefits Partners.

2 Today s Discussion About LBG Advisors Why Save in a 401(k) Specific Provisions Your Plan New For 2016 ROTH 401(k) has been added!! Strategies to Consider and What to Avoid Your Fund Menu MainVueBenefits.com (see 401(k) tab) NewportGroup.com login / setup Questions 1

3 Background LBG Advisors Employee Benefits Retirement Plans Member Firm Of National Financial Partners / Kestra Financial NFP / Kestra Over $1 billion a year in revenue Thousands corporate benefits and retirement plan clients Provides great back fice support, technology tools, and helps keep your plan in compliance 2

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5 Why Invest in 401(k)? Do you plan to retire someday? Your Retirement Plan is a long-term investment Despite market volatility, 401(k) advantages remain: Tax-deferred compounding interest Dollar cost averaging (Automatic payroll contributions) Institutional Share Classes (Lower expenses) Minimums waived for funds (Could apply outside 401k) Save up to $18,000 for 2016 ($12,500 more than IRA) Catch-up $6,000 (if age 50 or older) for total annual amount $24,000. Amount can be divided up between traditional and Roth Plan fers traditional and Roth options (ok to do both!) 4

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7 Plan for the Long Term Outliving your assets can be a real concern Present Annual Income Future Income Projection Equivalent annual income after 30 years 3% inflation* Annual income needed for retirement (assuming 80% your pre-retirement income) $20,000 $48,545 $38,836 $30,000 $72,818 $58,254 $40,000 $97,090 $77,672 $60,000 $145,636 $116,509 $80,000 $194,181 $155,345 * Hypothetical example. Actual inflation rates may differ. 6

8 Americans Are Not Saving Enough 82% 46% workers are not confident they will have enough money to retire comfortably 1 workers have completed a retirement needs calculation 1 50% all workers have less than $10,000 for retirement. 3 17% people expect to keep working during retirement just to make ends meet 2 >33% American workers have saved less than $1,000 dollars. 3 (1) 2014 Retirement Confidence Survey (2) Retirement Insights: JP Morgan 2014 Guide to Retirement (3) 7

9 Why Take part in a Retirement Plan Sources Income During Retirement

10 Social Security? 9

11 How Much Do You Need for Retirement? Will Social Security take care you? In 2014 the average Social Security benefit was $14,627/year* Could you live on that? *Source: April 2, 2014, Social Security, Basic Facts 10

12 Small Sacrifice For Retirement? Small Sacrifice Annual Savings *30YRS In A Plan 1 Specialty Cfee $ $161,189 1 Movie Per Week $ $91,855 1 Candy Bar Per Day $ $35,462 *Based on a 8% annual return on savings

13 Automatic Deferral Increase Assumptions Portfolio value is $0 at the beginning Year 1 Salary is $50,000 in Year 1 and increases 3% at the beginning each consecutive year Beginning contribution rate 5% in Year 1 and annual increases 1% at the beginning each consecutive year up to a maximum contribution rate 10% Average annual rate return 8% No withdrawals are taken Account Value $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 Automatic Deferral Increase Amount Value 5% Contribution Amount $400,000 $200,000 $ Years Participating in Plan Hypothetical example general investment types for illustrative purposes only. Not intended to reflect the performance any specific investment. Individual results will vary. 12

14 Power Starting Early and Compound Interest

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16 Feature Eligibility: Plan Provisions Provision Employees are required to be age 21, with at least 30 days service for Salary Deferral Contributions (1 st next month) Entry: Start next month after 30 days employment Savings Limits: Savings Changes: Auto Enroll/ Opt-Out Participants may defer 100% total annual compensation limited to an IRS maximum $18,000 for the 2016 calendar year. If you are 50 or older, you may defer an extra $6,000 for a total $24,000. If contributing to Traditional and Roth, total combined max is $24,000 You can change the amount your payroll deduction monthly and/or stop making contributions to the Plan at any time. HR/Payroll will be notified and update your changes. New Participants are auto-enrolled with 3% deferral. If you do not wish to participate in plan, please return Opt-out form to Mary Kirkpatrick at Corporate fice. Please login to NewportGroup.com to make deferral changes up or down from 3% start rate. 15

17 Plan Highlights Feature Vesting: Provision Employee deferrals are always 100% vested. No Current Company Match (Management may do so in future) When applicable, match has following vesting: 2 years 20%; 3 years 40%; 4 years 60%; 5 years 80%, 6 years 100%. Participants must work 1,000 hours in a plan year for their vesting to increase. Loans: Participants in the plan may borrow up to 50% their account balance to a maximum $50,000. Minimum loan amount is $1,000. You may have a maximum 1 outstanding loan at a time. The maximum repayment term for most loans is 5 years, except when borrowing for the purchase a primary residence where the maximum repayment period would be 15 years or retirement age, whichever comes first. Loan interest rate is 1% over prime rate at date loan and is fixed. A $200 fee applies to all loans and is paid by the participant. 16

18 When Can I Receive Money? Distribution Options Required Minimum Distribution Age 59½ (to avoid penalty) Retirement: Age 65 Death / Permanent Disability Loans (up to $50k / 50%) Hardship (please call LBG) Distribution Options Lump sum Roll into new employer s plan Rollover into an IRA Leave it in the plan Age 70 ½ 17

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20 The Emotional Cycle Investing Investing can trigger all sorts emotions. When returns are rising, you may feel confident, secure, happy. But just as markets move in cycles, so do emotions. When returns fall, investors emotions ten do too. This is easy Ecstatic No problem, this is short term Excited Excited BOOM Anxious I ll wait and see SLOWDOWN RECOVERY RECOVERY Frightened Hopeful I knew it. I should never have invested in that option RECESSION Hopeful Dejected 19

21 S&P 500 Inflection Points Source: J.P. Morgan Guide to the Markets Q

22 Time In Not Timing Returns S&P 500 $70,000 $60,000 $50,000 $58,332 (9.22% This chart shows performance a $10,000 investment between December 31, 1993 and December 31, 2013, when some the best days were missed $40,000 $30,000 $29,111 (5.49% return) $20,000 $10,000 $18,140 (3.02% return) $11,984 (0.91% return) $8,146 (-1.02% return) $5,697 (-2.77% return) $4,073 (-4.39% return) $- Fully Invested Missed 10 best days Missed 20 best days Missed 30 best days Missed 40 best days Missed 50 best days Missed 60 best days This chart is for illustrative purposes only and does not represent the performance any investment or group investments. Source: Prepared by J.P. Morgan Asset management using data from Lipper. 20-year returns are based on the S&P 500 Total Return Index, an unmanaged, capitalization-weighted index that measures the performance 500 large capitalization domestic stocks representing all major industries. Past performance is not indicative future returns. An Individual cannot invest directly in an index. Data as December 31, 2013 Source: J.P. Morgan 2014 Guide to Retirement 21

23 Investor Challenges Average Annual Return % 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 9.22% 2.41% 2.50% 1 S&P Return 2 Inflation Average Stock Fund Investor DALBAR QAIB Highlights Futility Investor Education 2 BLS.org Bureau Labor Statistics. 20 year average inflation rate JP Morgan Guide to the Markets 4Q2014, Page 65, Average Investor ( ). 22

24 Market Review - 1st Quarter 2016 Kaleidoscope: Changing Leadership The following chart exhibits the volatility asset class returns from year to year by ranking certain key indices in order performance. Also included in the chart is a balanced index, which represents a mix U.S. equity, international equity and fixed income indices. The chart graphically displays the volatility asset class returns from year to year, highlighting the importance diversification. Top-performing asset classes in a given year do not tend to repeat their stellar performance in subsequent years. Accordingly, the worst performing asset classes in a given year ten tend to outperform in future years. Said differently, past performance is not a good indicator future performance. Diversification, demonstrated by the balanced index, helps reduce volatility and the uncertainty that accompanies trying to pick the best asset class (or avoid the worst) in any given year YTD MSCI EAFE USD MSCI EAFE USD Russell 1000 Growth 5.24 BarCap US Agg Russell 1000 Growth Russell 2000 Growth 7.84 BarCap US Agg Russell 2000 Value Russell 2000 Growth Russell 1000 Value 5.67 Russell 1000 Growth 3.03 BarCap US Agg 7.05 Russell 1000 Value Russell 2000 Value MSCI EAFE USD Balanced Index* Russell 2000 Growth Russell 2000 Value 3.04 Balanced Index* MSCI EAFE USD Russell 2000 Value Russell 1000 Growth 0.59 Balanced Index* 1.70 Russell 2000 Value 5.45 Balanced Index* Russell 1000 Value 7.05 Russell 2000 Growth Russell 2000 Value MSCI EAFE USD Russell 1000 Growth 2.64 Russell 1000 Growth Russell 1000 Value Russell 1000 Growth 8.15 Balanced Index* 0.55 BarCap US Agg 1.64 Russell 1000 Value 5.26 Russell 1000 Growth Russell 2000 Growth 6.97 BarCap US Agg Russell 1000 Value Russell 2000 Value Russell 1000 Value 0.39 Russell 1000 Value Russell 1000 Growth Russell 1000 Value 5.97 BarCap US Agg MSCI EAFE USD 1.41 Balanced Index* 4.71 Russell 2000 Value Balanced Index* 6.61 Balanced Index* Russell 1000 Growth Balanced Index* Balanced Index* Russell 2000 Growth Russell 2000 Growth MSCI EAFE USD 5.60 Russell 2000 Growth Russell 2000 Growth 0.74 Russell 1000 Growth 4.15 Russell 2000 Growth 9.07 Russell 1000 Growth Russell 1000 Value Russell 2000 Growth Russell 1000 Value 8.21 MSCI EAFE USD Russell 2000 Value Balanced Index* Balanced Index* 4.22 Russell 2000 Value Russell 1000 Value MSCI EAFE USD 2.43 BarCap US Agg 4.33 BarCap US Agg Russell 2000 Value MSCI EAFE USD 5.93 BarCap US Agg 6.54 BarCap US Agg MSCI EAFE USD 4.22 BarCap US Agg BarCap US Agg MSCI EAFE USD Russell 2000 Value Russell 2000 Growth *Balanced Index comprised 50% Russell 3000, 10% MSCI EAFE and 40% Barclays Capital U.S. Aggregate, rebalanced quarterly.

25 Benefits Diversification Source: J.P. Morgan Guide to the Markets Q

26 Investment Choices What is a Mutual Fund? Mutual Fund Pressional Fund Managers Investment Types Stocks Bonds Cash Combination 25

27 Diversification Assistance Growth & Value Growth Style tends to be in favor Boom Slowdown Recovery Recession Value Style tends to be in favor What is Growth? Reinvestment earnings Does not pay dividends What is Value? Consistent dividends Bought at a discount or undervalued Slower growth Investments in smaller company and micro-cap stocks generally carry a higher level volatility and risk over the short term. 26

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29 What Strategy is Right for You? When choosing an investment strategy, consider: Your current age Your time until retirement Your risk tolerance How much do you want to be involved in the research, fine tuning, rebalancing, etc., the mutual funds fered in your plan? 28

30 Choosing an Investment Strategy There are three strategy options you can utilize in your plan: Do it yourself Do it for me using risk-based models Do it for me using time-based models 29

31 Do It Yourself / Do It For Me Do It Yourself You research the funds available in your plan You allocate percentage amounts to the fund You rebalance your portfolio as you see fit You monitor and maintain your allocation You make changes when you feel it s necessary Do it For Me (Risk-Based) Take the Risk Quiz Plan fers five risk-based options Do it For Me (Time-Based) Plan fers JP Morgan Target Date Funds 30

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33 Fund Menu U.S. DOMESTIC FUNDS Value Blend Growth DFA US Large Cap Value (DFLVX) Columbia Large Cap Index R5 (CLXRX) Vanguard Growth Index ADM (VIGAX) Large Vanguard Mid-Cap Value Index Adm. (VXVAX) Columbia Mid Cap Index R5 (CPXRX) Prime-cap Odyssey (POAGX) Mid DFA US Targeted Value (DFFVX) Columbia Small Cap Index R5( CXXRX) Vanguard Small Cap Growth Index Adm. (VSGAX) Small Where Ingenuity Creates Impact 32

34 Fund Menu INTERNATIONAL (3) Specialty Funds (2) Dodge & Cox Intl Stock (Intl Large Blend) American Funds New World R6 (Emerging) American Funds New Perspective (Global) DFA Real Estate Securities I (REIT) PIMCO Commodity Real Return (Commodity) Bonds / Stable Value (4) ASSET ALLOCATION (5) / Target Dates (10) PIMCO Global Bond Unhedged Instl. (Global) Vanguard Long Term Inv.-Gr Adm. (Specialty) Vanguard Int-Term Bond Index Adm (Core) Standard Stable Value II (Q2-16 paying 2.30%) Manning & Napier Pro-Blend Cnsrv Term I (Conservative) Vanguard Wellesley Income Adm. (Mod-Conservative) Franklin Income Adv. (Moderate) American Funds Inc. Fund Amer R6 (Moderate) T.Rowe Price Personal Strategic Growth (Aggressive) JP Morgan Smart-Retirement Income (Mod-Conservative) JPM Smart-Retirement 2015 (Moderate) JPM Smart-Retirement 2020, 2025 (Growth) JPM Smart-Retirement 2030,2035,2040,2045,2050,2055 (Aggressive) Where Ingenuity Creates Impact 33

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36 Target Date Retirement Funds What is a Target Date Fund? Unlike funds that invest directly in stocks, bonds or other securities, a target date fund invests in other mutual funds. You receive a broad range mutual funds in the mix considered appropriate for your current age. As you grow older, the fund mix automatically becomes more conservative as your target retirement date approaches. The principal value the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate date when investors turn age 65. The funds invest in a broad range underlying mutual funds that include stocks, bonds, and short-term investments and are subject to the risks different areas the market. The funds emphasize potential capital appreciation during the early phases retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus more on income and principal stability during retirement. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility. Where Ingenuity Creates Impact 35

37 Target Date Retirement Funds Why Consider a Target Date Fund? Simplify decision-making. Rather than research and select individual investments, you can just choose a fund based on your age, retirement date and other impactful considerations, such as your particular financial situation, goals and risk tolerance (amount volatility you can tolerate in up and down markets) Instant portfolio diversification. From a single investment, you receive a fully diversified portfolio covering every major asset class and sub-class Convenient investing. Your portfolio is automatically adjusted to remain ageappropriate as retirement nears Pressional management. Experienced pressionals build, monitor and rebalance your portfolio on an ongoing basis so you don t have to Simpler recordkeeping. Your account statement lists just one fund and one overall investment return The principal value the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate date when investors turn age 65. The funds invest in a broad range underlying mutual funds that include stocks, bonds, and short-term investments and are subject to the risks different areas the market. The funds emphasize potential capital appreciation during the early phases retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus more on income and principal stability during retirement. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility. Where Ingenuity Creates Impact 36

38 JP Morgan Target Date Funds: How your investment mix changes over time Less Market Risk The performance and risks each Retirement Fund will directly correspond to the performance and risks the funds in which it invests. By investing in many underlying funds, the Retirement Funds have partial exposure to the risks many different areas the market, including possible loss principal. Where Ingenuity Creates Impact

39 Fund Fact Sheet Overview

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41 LBG Advisors is Here to Help Report #1: How much will I need to save for retirement? Retirement can be the saddest or happiest day your life. This pre-retirement calculator will help you determine how well you have prepared and what you can do to improve your retirement outlook. It is important that you re-evaluate your preparedness on an ongoing basis. Changes in economic climate, inflation, achievable returns, and in your personal situation will impact your plan. Report #2: How Long will savings last in Retirement? Due to increasing life expectancies, many are running into the problem outlasting their savings. Use this calculator to help determine when your retirement savings account may be depleted given a specified monthly income target. You may currently be in receipt a company pension or other fixed income such as Social Security to help supplement your retirement savings account.

42 LBG Advisors is Here to Help Report #3: What may my 401(k) Be Worth? It may surprise you how significant your retirement accumulation may become simply by saving a small percentage your salary each month in your 401(k) plan. Use this calculator to estimate how much your plan may accumulate for retirement. Report #4: How Much Should I Save to Reach my Goal? What are you saving for: a computer, car, boat, summer home, down payment? Use this calculator to determine what you need to save on a regular basis to have the funds ready when needed. Report #5: Save Now vs. Save Later A penny saved is a penny earned, but a penny saved today is a penny earning more. It is important to start saving as soon as possible for events such as retirement due to the impact compounding. If you start saving now you will need to save considerably less than if you wait a few years. Use this calculator to determine how much extra you will need to save if you wait.

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44 Participant 401(k) Enrollment Manual For: HENLEY USA

45 Login Instructions Step 1: Step 2: Step 3: Step 4: Step 5: In upper right, click LOGIN / Participant Access First time user please use Social Security number for username First time user, please use birthday for password (MMDDYYYY format) Upon logging in, system will ask you to create unique user/password Upon logging into the system as a New User, you will be prompted through a series screens to capture personal information including , address, phone, etc

46 Enrollment - Beneficiaries This next screen allows you to enter information about your beneficiary(ies). You may enter more than one primary beneficiary and multiple contingent beneficiaries. Enter in the information and click Save and Continue to move to the next page. Note: This web entry is not an ficial Beneficiary Designation Form. You must have a signed beneficiary formin your Employee file. After you complete your Enrollment, go to the Forms/Docs tab and print out, complete & SIGN your beneficiary form and provide to your Plan Sponsor.

47 Enrollment - Deferrals The Deferrals page allows you to enter the % or $ amount each paycheck you wish to defer into your retirement account. Click Save and Continue to move to the next page.

48 Enrollment - Investment Elections New Participants: The Investment Elections page allows you to review fund performance information and the prospectus for each fund. After reviewing, select your investments, or model portfolio, to determine how your deferral amount will be invested. Total election % must equal 100%. Click Save and Continue to move to the final enrollment screen. Current Participants: The new Verisight website /platform will have your current percentages and fund allocations mapped over and available upon initial registration

49 Enrollment - Review and Confirmation This final screen allows you to review and edit the information you have entered. Click Finish to complete the enrollment process. NewportGroup.com

50 Enrollment - Final Confirmation Upon completion the enrollment process, a final screen will confirm your enrollment and allow you to access the plan website which begins at the Dashboard. NewportGroup.com

51 Participant Dashboard Once you have logged into the system, your first screen will be the Dashboard which fers a snapshot : Personal Data Balances Contributions Recent Transactions Messages; and Portfolio Summary Further detail to the various sections is gained by clicking the Edit/View Details link under these sections.

52 Questions? For any questions regarding your account, including: Login Enrollment Deferral Amounts Allocating your Deferrals Changing your Investment Allocations Loans or Distributions Designating or Changing your Beneficiary Newport: (888) or LBG Advisors (425) or

53 Conclusion Take advantage the resources available to you through your company Do the appropriate planning today to help you maintain your goals Avoid common mistakes many investors and remain disciplined to reach your goals Any questions? 52

54 Disclosures This material was created to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis these subjects. It is not intended to provide specific legal, tax, investment advice or recommendations for any individual. The services an appropriate pressional should be sought regarding your individual situation. Comments concerning past performance are not intended to be forward looking and should not be viewed as an indication future results. Mutual funds are sold by prospectus only. Before investing, investors should carefully consider the investment objectives, risks, charges and expenses a mutual fund. The fund prospectus provides this and other important information. Please contact your representative or the Company to obtain a prospectus. Please read the prospectus carefully before investing or sending money. The target date is the approximate date when investors plan to start withdrawing their money. Generally, the asset allocation each fund will change on an annual basis with the asset allocation becoming more conservative as the fund nears the target retirement date. ACR# /14 Securities fered through Kestra Investment Services, LLC (Kestra IS), member firm FINRA/SIPC. Investment advisory services fered through Kestra Advisory Services, LLC (Kestra AS), an affiliate Kestra IS. LBG Advisors is a member firm Benefits Partners. Kestra IS and Kestra AS are not affiliated with LBG Advisors or Benefits Partners. 53