CalmWater Financial Network Program Presented by: Chuck Olsen, CFP

Transcription

1 Nucor Benefits and Essential Planning For Your Future CalmWater Financial Network Program Presented by: Chuck Olsen, CFP CalmWater Financial Group 100 N 13 th St, Suite 310 Norfolk, NE Securities and Advisory Services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered by CalmWater Financial Group LLC are separate and unrelated to Commonwealth. This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation.

2 Financial Planning and Benefits Summary for Nucor Teammates What is the CalmWater Financial Network? Why are we here? Why does Nucor provide this benefit? Why are you here?

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4 Overview Benefits Summary Maximize Your Benefits Market/Economic Update Six Key Areas of Wealth Management

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6 Benefits Medical / Dental Insurance Life Insurance 1 x annual income paid by Nucor. Can buy 3 x s Long Term Disability Insurance Option A (50% benefit) Option B (60% benefit but higher premium) Sick Leave PTO Personal, Holiday, Vacation, Funeral, Jury Profit Sharing / 401k Flexible Spending Accounts Health Care Spending Dependent Care Spending

7 Benefits, continued EMSIP (10% match when buy Nucor stock) Education Reimbursement Adoption Assistance Financial Planning CalmWater Financial Network Program

8 Benefit Changes Health Care Spending Accounts $2,550 Max $500 rollover for 2014 Slight Increase in Health Care Insurance Costs New 401k Funds as of March 7 th, 2014 (3) 401k Auto Enrollment as of Jan. 1 st 2014 at 4% 401k Loans $35 Set-Up Per Loan $3.75 Maintenance Per Loan Per Quarter Maximum of 2 EMSIP Changes to Fidelity Fall 2013 (Same 10% match)

9 EMSIP Example Two different ways to buy a car 1. Invest in Nucor stock through payroll deduction and get a 10% match $100/week, 60 months, *Potential Future Value = $40,316 Total contributions = $26, With a 5% loan and make payments over 5 years Borrow $36,284 (above with a 10% down payment) Monthly payment = $682/month Total payments = $44,952 Quote: Those who understand interest earn it, those who don t, pay it! *Illustration uses a 13% rate of return calculated based on the long term track record of Nucor Corp (NUE) stock. 10 yr = 11.9% and 15 year = 15.8%. A dividend of 3% (current) is also assumed to justify the illustration.

10 1. Effective July 2013, your contributions began going to Fidelity 2. AST shares stay there unless you authorize the transfer 3. New Fidelity account is set up to NOT reinvest dividends (you can change it) 4. Cost basis!!! *Very important to capture at AST *Fidelity will NOT automatically receive old cost basis *Recommend saving historical data electronically & upload to Fidelity 5. Many advantages at Fidelity EMSIP Changes *Market and Limit orders *Share specific sales (choose high or low cost shares)

11 Activate Account

12 Activate Account

13 Dividend Reinvestment

14 Dividend Reinvestment

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19 Vulcraft NE 1. LTD participation is 89% EMSIP participants k participation is 90% 4. Average deferral into the 401k = 7.32% loans in the 401k (79 in 2011) 6. Healthcare Spending participation = 48% 7. Nucor Foundation Scholarships = $108,874 (2013) 8. Health Assessment Completion = 92.8%

20 6 Key Areas of Financial Planning 1. Cash Management (Budgeting) 2. Insurance Planning (Risk Management) 3. Investment Planning 4. Retirement Planning 5. Tax Planning 6. Estate Planning

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22 1. Cash Management Budgeting Tell Your Money Where To Go vs. Wondering Where It Went Pay Yourself First 401k EMSIP Have a budget. How much really needs to go to checking? 3-6 months living expenses in an emergency fund Pay off short term debt If you use credit cards, you WILL spend more Be prepared!

23 1. Cash Management (cont.) New visual of a checking account.the Bucket Only put $ in the bucket you plan on spending Build that emergency fund! Savings account first, then fixed amount to checking? Allows you to take advantage of market volatility Peace of mind reduces financial stress Know your target $ (ie $10k or $20k) Savings account for emergency fund (NOT stock!) Live within your means Quote to remember: Those who understand interest earn it, those who don t, pay it! Allow Nucor to help with your savings needs Visualize No payments!

24 2. Insurance Planning Insurance Needs Life Who has financial loss in the event of your passing? How much do you need? Single Married Married with kids No children at home and have accumulated assets Disability - Insuring your income times working years (ie. $50k X 20 years = $1,000,000) Health Property & Casualty Long Term Care (age 50-55) Continuously Review & Update

25 2. Insurance Planning Hypothetical Life Insurance Options Assumes cost of $120k Life Insurance (~$40k income x 3) Age band Weekly Annual 5 year cost $ 6.00 $ $ 1, $ $ $ 2, $ $ $ 4, $ $ 1, $ 5, Total cost $ 14, Outside option: Male, Pref Non Tobacco 20 year You save $ 5.03 $ $ 5, $ 8, Preferred Chew Tobacco $ 7.88 $ $ 8, $ 5, Preferred Smoker $ $ $ 13, $

26 3. Investment Planning How & Where To Invest Understand What You Own Determine Suitable Approach Time frame? Goal what is purpose of investments? Volatility Tolerance Diversify Rebalance Consider Roth IRA s the Tax Free bucket

27 What are these numbers? %? Answer: The return in the S&P %? Answer: The average equity investor Source: JPMorgan Guide to the Markets

28 What is the significance? $100,000 starting value and 25 years growth: 2.5% 9.2% Difference (No deposits) $185,394 $902,747 $717,353 For illustrative purposes only. Not indicative of any actual investing result.

29 The Cycle of Market Emotions

30 401k Investment Decisions 1. Build Your Own Portfolio (ie. select 6 to 9 funds to diversify) OR 2. Age Based Allocated Portfolios (ie. 2015, 2025, 2040)

31 Investment Allocation Value Blend Growth Large Cap (over $10b) Mid Cap ($1-$10b) Small Cap (less than $1b) US Equity Funds

32 401k.com with Fidelity

33 Research Your Funds

34 Research Your Funds

35 Research Your Funds

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38 Plus 1% Strategy: What is the significance? Contribution Strategy: 7% 7% +1%/yr Difference Potential Balance 20yrs $231,842 $504,930 Potential Balance 40yrs $1.3 mil $3.5 mil $273,088 $2,200,000 For illustrative purposes only. Not indicative of any actual investing result. Assumes $60,000 current income. 7% rate of return. Past performance does not guarantee future returns. Capping percentage of contribution at 26% and assumes a 3% COLA.

39 Market Update Potential Negatives Economic Growth Slowdown Increase Tensions In The Middle East Ebola Scares Terrorism / ISIS Potential Positives Continued Economic Growth Continued Job Growth Housing Market Positives Improved / Resilient Consumers Cash Surplus Mergers / Acquisitions / Business Investment Corporate Profits

40 S&P 500 Last 30 Years

41 Housing Recovery

42 Consumer Finances

43 Corporate America

44 Employment

45 Interest Rates

46 4. Retirement Planning Identify Goals What Does Retirement Look Like To You? What Will It Cost? How Much Do You Need To Save? So, What s your number? Depletion vs. Retention Update your 401k contribution % annually Where will your retirement income come from? What about the old ESOP shares??? BE CAREFUL! Social Security? Estimate your benefits at Maximize them! Why you should wait. (Note: 55+ meetings coming soon)

47 Transition to Retirement 1. Don t put all your eggs in one basket 2. Understand the importance of a rising income 3. Avoid accounts that lock you in for years 4. Don t give up your account value to draw an income

48 Fidelity ESOP (hired < 1986)

49 Fidelity ESOP Cont

50 Depletion vs. Retention Depletion Method: 5-6% Withdrawal Retention Method: 4% Withdrawal

51 5. Tax Planning Having a sound tax strategy Consider Income & Capital Gains Taxes Non-retirement stock accounts (ie. Nucor EMSIP) Plan & Continue to Adjust With Changes Consider ROTH IRA s as well as 401k The bucket strategy

52 The above is for illustrative purposes only. Please consult a tax advisor for your personal situation.

53 Tax Bucket Strategy Reduce your tax liability 401(k) IRA Non- Qualified (Nucor) Savings Roth IRA Social Security Social Security Until $1 Taxed (~$22,000) Until $1 Taxed $0 Taxed $0 Taxed???? See a tax professional regarding your situation

54 6. Estate Planning Estate tax and disorganization can cost your heirs Be organized! Who has a: Will? Health Care Power of Attorney? Living Will? Durable Power of Attorney Have the final word in the distribution of your hard earned assets.

55 What Now? Check off areas on handout that you feel needs attention Update benefits (i.e...) Enroll in 401k if not participating Increase 401k Contribution % Update beneficiaries Prepare for the next market slow down as well as growth period Participate in EMSIP Rebalance 401k Set up one on one meeting with our advisors (what to bring) Planning strategies pay off. Big time! Organize... and dream! The best investment

56 Questions? Contact one of our advisors at (402) Chuck Olsen, CFP Travis Riggert, CFP Terry Heimes, CFP Jack Rother, CFP Ryan Anderson, CFP

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