Jump-Start Your Retirement

Transcription

1 MARCH 25, 2015 Jump-Start Your Retirement TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.

2 Important Disclosures MARCH 25, 2015 All investments involve risks, including loss of principal. TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances. Before rolling over a 401(k) to an IRA, be sure to consider your other choices, including keeping it the former employer s plan, rolling it into a 401(k) at a new employer, or cashing out the account value keeping in mind that taking a lump sum distribution can have adverse tax consequences. Whatever you decide to do be sure to consult with your tax advisor. This presentation includes a feature that allows recording of electronic (including audio) participant-shared content. By continued participation in this session you automatically consent to such recording, and the subsequent rebroadcast of any recording. Annuities are long-term investments designed for retirement purposes. Withdrawals of taxable amounts are subject to income tax and, if taken prior to age 59½, a 10% federal tax penalty may apply. Early withdrawals may be subject to withdrawal charges. Optional riders are available at an additional cost. All guarantees are based on the claims paying ability of the insurer. An annuity is a tax-deferred investment. Holding an annuity in an IRA or other qualified account offers no additional tax benefit. Therefore, an annuity should be used to fund an IRA or qualified plan for annuity features other than tax deferral. Product features and availability vary by state. Restrictions and limitations may apply. All guarantees are based on the claims paying ability of the insuring company. Investment and Insurance Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

3 Speaker MARCH 25, 2015 Matt Sadowsky Director of Retirement and Annuities, TD Ameritrade Manages a team that coordinates the products, tools, and services to address clients retirement needs Serves as president of TD Ameritrade s insurance agency, overseeing the distribution of third party annuity products Graduated cum laude with a dual degree in Philosophy and Entrepreneurial Management from the University of Pennsylvania s College of Arts and Sciences and Wharton School Holds FINRA Series 7, 24, and 66 licenses, and he is Life and Health insurance-licensed nationally Retirement Income Certified Professional (RICP )

4 Jump-Start Your Retirement Matt Sadowsky, Director of Retirement and Annuities March 25, 2015 TD Ameritrade, Inc., member FINRA/SIPC, is a subsidiary of TD Ameritrade Holding Corporation. TD Ameritrade is a trademark Jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.

5 Retirement = start tapping into nest egg to replace some or all of your paycheck Time Employer Sponsored Retirement Plan, e.g., 401(k) Individual Retirement Accounts (IRAs) Brokerage Account Savings Account Annuities and Life Insurance Social Security Pensions Annuities Withdrawal Strategies

6 CONTRIBUTIONS COMPOUND GROWTH TAX ADVANTAGES Tax Deductions Tax Deferral Tax-Free Distributions x TIME Retirement Savings

7 $395,291 Contributions + Compound Growth = $245K differential $150,000 Contributions only Years Assumes $5k annual contribution, 6% interest rate all years, interest is reinvested, no taxes For Illustrative Purposes Only Hypothetical example for illustrative purposes only. Does not reflect the performance of any actual investment. Past performance is not a guarantee of future results or success.

8 $395,291 = $211K differential $183,928 Delay 10 Years before Contributing Years Assumes $5k annual contribution, 6% interest rate all years, interest is reinvested, no taxes For Illustrative Purposes Only Hypothetical example for illustrative purposes only. Does not reflect the performance of any actual investment. Past performance is not a guarantee of future results or success.

9 $395,291 Contributions = $150,000 Higher portfolio value if you contribute for only the first 10 years, than if you delay and then keep on contributing $211,363 Contributions = $50,000 $183,928 $183,928 Contributions = $100,000 Years Assumes $5k annual contribution, 6% interest rate all years, interest is reinvested, no taxes For Illustrative Purposes Only Hypothetical example for illustrative purposes only. Does not reflect the performance of any actual investment. Past performance is not a guarantee of future results or success.

10 $395,291 Tax deferred account $395k Less: $86k tax = $309k post-tax $275,786 Taxable account $276k $150,000 Contributions $150k Assumes $5k annual contribution, 6% interest rate all years, interest is reinvested, 35% come out of portfolio For Illustrative Purposes Only Hypothetical example for illustrative purposes only. Does not reflect the performance of any actual investment. Past performance is not a guarantee of future results or success.

11 $400,000 $395k $350,000 $300,000 $361,939 $52,500 $309,439 $275,786 Less: $86k tax = $309k post-tax $276k $250,000 $200,000 $150,000 $150,000 $150k $100,000 $50,000 $0 Tax Deferred & Tax Deductible Tax Deferred Account Taxable Account Contributions Only Assumes $5k annual contribution, 6% interest rate all years, interest is reinvested, 35% come out of portfolio Hypothetical example for illustrative purposes only. Does not reflect the performance of any actual investment. Past performance is not a guarantee of future results or success. For Illustrative Purposes Only

12 $400,000 $350,000 $361,939 $52,500 $309,439 $300,000 $275,786 $250,000 $200,000 $150,000 $150,000 $100,000 $50,000 $0 Tax Deferred & Tax Deductible Tax Deferred Account Taxable Account Contributions Only Assumes $5k annual contribution, 6% interest rate all years, interest is reinvested, 35% come out of portfolio Hypothetical example for illustrative purposes only. Does not reflect the performance of any actual investment. Past performance is not a guarantee of future results or success. For Illustrative Purposes Only

13 Employer Sponsored Retirement Plans Examples: 401(k), 403(b), Thrift Savings Plans Requirements: Offered by your employer Employer-defined requirement (e.g., min. amount of service) Individual Retirement Accounts (IRAs) Requirements: earned income or receiving alimony Plans for the Self-Employed and Small Businesses Examples: SEP, SIMPLE, Individual(k) Annuities

14 Contributions Compound Growth Tax Considerations 401(k) $18,000 max contribution $6,000 age 50+ catch-up Possible employer match Investment options: - Curated fund line-up, selected by employer - Institutionally priced Administrative fees Tax Deferral Tax Deductible Tax-Free Distributions Early withdrawal penalty* RMDs after age 70½, (unless still employed) IRA $5,500 max contribution $1,000 age 50+ catch-up No contributions permitted after age 70½ (no limit to rollover $ amount) Investment options: - Stocks - Bonds - Mutual funds - ETFs - Options - Futures - Non-standard assets Tax Deferral Tax Deductible Tax-Free Distributions Early withdrawal penalty before age 59½ * RMDs after age 70½ * Exceptions apply

15 Contribute after-tax dollars No tax deduction No federal tax on distributions 5-year holding period before making distributions of gains Begins January 1 st of first contribution year Roth IRAs only Jan Jan Apr 15 No required min. distributions (RMDs) at 70-1/2 for Roth IRAs Income limits to contribute No income limits to convert

16 Contributions Compound Growth Tax Considerations Roth 401(k) 401(k) $18,000 max contribution $6,000 age 50+ catch-up Possible employer match Investment options: - Curated fund line-up, selected by employer - Institutionally priced Administrative fees Tax Deferral Tax Deductible Tax-Free Distributions Early withdrawal penalty* 5-year holding period RMDs after age 70½, (unless still employed) Roth IRA IRA $5,500 max contribution $1,000 age 50+ catch-up No Contributions contributions are permitted after age 70½ No contributions if income exceeds limits (no limit to rollover $ amount) Investment options: - Stocks - Bonds - Mutual funds - ETFs - Options - Futures - Non-standard assets Tax Deferral Tax Deductible Tax-Free Distributions Early withdrawal penalty before age 59½ * 5-year holding period RMDs No RMDs after after age age 70½ 70½ * Exceptions apply

17 Additional questions about retirement savings? Contact a TD Ameritrade Retirement Consultant

18 MARCH 25, 2015 Unlocking Social Security Up next: Jump-Start Your Retirement TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank TD Ameritrade IP Company, Inc. All rights reserved. Used with permission

19 Important Disclosures MARCH 25, 2015 TD Ameritrade does not provide tax or retirement-planning advice. We suggest you consult with a qualified tax-planning or retirementplanning professional with regard to your personal circumstances. Past performance is no guarantee of future results or success. The material, views and opinions expressed in this presentation are solely those of the presenter and may not be reflective of those held by TD Ameritrade, Inc. The webcast is provided for general information purposes only and should not be considered an individualized recommendation or advice. TD Ameritrade makes no representations or warranties with respect to the accuracy or completeness of the information provided. TD Ameritrade and Transamerica are separate, unaffiliated companies and not responsible for one another s products, services or policies. This presentation includes a feature that allows recording of electronic (including audio) participant-shared content. By continued participation in this session you automatically consent to such recording, and the subsequent rebroadcast of any recording.