Put a spark in your savings

Transcription

1 Put a spark in your savings Let Vanguard help you create a brilliant retirement plan in a few easy steps BorgWarner Inc. Retirement Savings Plan

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3 SAVING

4 SAVING INVESTING

5 SAVING ENOUGH? INVESTING WISELY?

6 Get 100% of your employer match.

7 3% your contributions.

8 3% employer matching contributions.

9 6% total contribution.

10 Pre-tax Contributions Company Retirement Account 3% vested immediately. Increases with years of service.

11 Pre-tax Contributions Company Retirement Account 3% vested immediately. Increases with years of service. Savings Account Contribute up to 28% pre-tax. 1:1 company match, up to 3% of pay. 100% vested after 3 years.

12 Pre-tax Contributions Company Retirement Account 3% vested immediately. Increases with years of service. Savings Account Contribute up to 28% pre-tax. 1:1 company match, up to 3% of pay. 100% vested after 3 years. Retiree Health Account Contribute up to 3% pre-tax. 1:1 company match, up to $500 annually. 100% vested after 3 years.

13 After-tax Contributions Savings Account Contribute up to 28% after-tax.

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15 +1%

16 +1%

17 Vanguard recommends saving 12 15%.

18 Retirement income calculator How much income will you need in retirement? Are you on track? Compare what you may have with what you will need. How old are you, and when will you retire? Monthly income in retirement I m52 and plan to retire at age62 $4,000 What s your current annual income? How much do you save annually for retirement? How much have you already saved for retirement? What percentage of your of your current current income income do you do expect you expect to need to in need retirement? in retirement? Learn more. Learn more. $45,000 per year $45 $7,000 (16% of your income) $130,000 79% $3,000 $2,000 $1,000 What s your expected average annual rate of return? 5.0% What you may have: $785 What you ll need: $2,963 Include your estimated monthly Tell us about it. $0 per month (today s dollars) Legend: Retirement plan Social Security Tell us about it. 0% of your salary at retirement These values are pre-tax and shown in today s dollars. For more information, click here. Include contributions (by you and your employer) to plans such as 401(k) and 403(b) plans. Also include IRAs and any taxable savings earmarked for retirement. This illustration is hypothetical and does not represent the return on any particular investment. Note: All investing is subject to risk.

19 TIME

20 Time is on your side After 10 years $10,100 $32,800 Contributions Earnings $42,900 Assumes a $30,000 salary, saving 10% over 30 years, a 6% annual rate of return, and a 2% annual pay increase. This hypothetical illustration does not represent the return on any particular investment. The final account balances do not reflect any taxes or penalties that may be due upon distribution. Withdrawals from a tax-deferred investment before age 59½ are subject to a 10% federal penalty tax unless an exception applies.

21 Time is on your side After 10 years $10,100 $32,800 Contributions Earnings $42,900 After 20 years $56,200 $72,900 $129,100 Assumes a $30,000 salary, saving 10% over 30 years, a 6% annual rate of return, and a 2% annual pay increase. This hypothetical illustration does not represent the return on any particular investment. The final account balances do not reflect any taxes or penalties that may be due upon distribution. Withdrawals from a tax-deferred investment before age 59½ are subject to a 10% federal penalty tax unless an exception applies.

22 Time is on your side After 10 years $10,100 $32,800 Contributions Earnings $42,900 After 20 years $56,200 $72,900 $129,100 After 30 years $121,700 $173,200 $294,900 Assumes a $30,000 salary, saving 10% over 30 years, a 6% annual rate of return, and a 2% annual pay increase. This hypothetical illustration does not represent the return on any particular investment. The final account balances do not reflect any taxes or penalties that may be due upon distribution. Withdrawals from a tax-deferred investment before age 59½ are subject to a 10% federal penalty tax unless an exception applies.

23 What you save over 20 years: $300

24 What you save over 20 years: $72k

25 What you save over 20 years: $72k 6% This hypothetical illustration does not represent the return on any particular investment.

26 What you save over 20 years: $132k This hypothetical illustration does not represent the return on any particular investment.

27 SAVING INVESTING

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29 ?

30 Reduction of risk over time U.S. stock market returns years + 3.1% % 10 years - 0.9% % 5 years % % 1 year % % The bar chart and accompanying figures show the best and worst 1-, 5-, 10- and 20-year periods of market performance within the time frame. The performance data shown represent past performance, which is not a guarantee of future results. When determining which index to use and for what period, we selected the index we deemed to fairly represent the characteristics of the referenced market, given the available choices. For U.S. stock market returns, we use the Standard & Poor s 90 Index from 1926 to March 3, 1957; the Standard & Poor s Index from March 4, 1957, to 1974; the Wilshire 5000 Index from 1975 to April 22, 2005; the MSCI US Broad Market Index through June 2, 2013; and CRSP U.S. Total Market Index thereafter. Source: Vanguard.

31 STOCKS BONDS

32 Do it yourself.

33 Do it yourself. Choose from the funds in your plan s lineup.

34 Choose from the funds in your plan s lineup.

35 Choose from the funds in your plan s lineup.

36 The transfer of your assets Your money moved from here... Northern Trust Collective EAFE Index Fund; Tier 2 Northern Trust Focus 2010 Fund; Tier L Northern Trust Focus 2015 Fund; Tier L Northern Trust Focus 2020 Fund; Tier L Northern Trust Focus 2025 Fund; Tier L Northern Trust Focus 2030 Fund; Tier L Northern Trust Focus 2035 Fund; Tier L Northern Trust Focus 2040 Fund; Tier L Northern Trust Focus 2045 Fund; Tier L Northern Trust Focus 2050 Fund; Tier L Northern Trust Focus 2055 Fund; Tier L Northern Trust Focus 2060 Fund; Tier L Northern Trust Focus Income Fund; Tier L To here... Vanguard Total International Stock Index Fund (Inst) Vanguard Target Retirement 2010 Trust II Vanguard Target Retirement 2015 Trust II Vanguard Target Retirement 2020 Trust II Vanguard Target Retirement 2025 Trust II Vanguard Target Retirement 2030 Trust II Vanguard Target Retirement 2035 Trust II Vanguard Target Retirement 2040 Trust II Vanguard Target Retirement 2045 Trust II Vanguard Target Retirement 2050 Trust II Vanguard Target Retirement 2055 Trust II Vanguard Target Retirement 2060 Trust II Vanguard Target Retirement Income Trust II

37 Tier 1: All-in-one (target-date) investments Vanguard Target Retirement 2060 Trust II Vanguard Target Retirement 2055 Trust II Vanguard Target Retirement 2050 Trust II Vanguard Target Retirement 2045 Trust II Vanguard Target Retirement 2040 Trust II Vanguard Target Retirement 2035 Trust II Vanguard Target Retirement 2030 Trust II Vanguard Target Retirement 2025 Trust II Vanguard Target Retirement 2020 Trust II Vanguard Target Retirement 2015 Trust II Vanguard Target Retirement 2010 Trust II Vanguard Target Retirement Income Trust II Investments in Target Retirement Trusts are subject to the risks of their underlying funds. The year in the trust name refers to the approximate year (the target date) when an investor in the trust would retire and leave the workforce. The trust will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Trust is not guaranteed at any time, including on or after the target date.

38 Tier 2: Core investments Stocks BorgWarner Company Stock Fund Vanguard Mid-Cap Index Fund Institutional Shares Vanguard Total International Stock Index Fund Institutional Shares (New) Northern Trust Collective S&P 500 Index Fund Tier 3 PNC Small Cap Fund Class I Cohen & Steers Real Estate Securities Fund Class Z (New) Artisan Global Opportunities Collective Trust (New)

39 Tier 2: Core investments Bonds Northern Trust Collective Aggregate Bond Index Fund Tier 2 Northern Trust Collective Treasury Inflation-Protected Securities (TIPS) Index Fund Non-Lending Tier 2 (New) Stable Value T. Rowe Price Stable Value Fund Schedule N (closed to new investments)* Vanguard Retirement Savings Trust III (New) A stable value investment is neither insured nor guaranteed by the U.S. government. There is no assurance that the investment will be able to maintain a stable net asset value, and it is possible to lose money in such an investment. A stable value fund is not a mutual fund. It is an investment pool available only to tax qualified plans and their eligible investors. Investment objectives, risks charges, expenses, and other important information should be considered carefully before investing. *T. Rowe Price Stable Value Fund Schedule N will be removed from the investment lineup in February Any remaining balances in the fund will move automatically to Vanguard Retirement Savings Trust III.

40 Let Vanguard help you.

41 Let Vanguard help you. Target Retirement Trusts.

42 Target Retirement Trusts U.S. Stocks International Stocks U.S. Bonds International Bonds

43 Target date 100% Young Transition Early Late % U.S. stocks International stocks U.S. nominal bonds International nominal bonds Short-term TIPS

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47 Legal stuff All investing is subject to risk, including the possible loss of the money you invest. Investments in Target Retirement Trusts are subject to the risks of their underlying funds. The year in the trust name refers to the approximate year (the target date) when an investor in the trust would retire and leave the workforce. The trust will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Trust is not guaranteed at any time, including on or after the target date. Vanguard Target Retirement Trusts are not mutual funds. They are collective trusts available only to tax-qualified plans and their eligible participants. Investment objectives, risks, charges, expenses, and other important information should be considered carefully before investing. The collective trust mandates are managed by Vanguard Fiduciary Trust Company, a subsidiary of The Vanguard Group, Inc.

48 Resources.

49 Retirement Savings Plan Contribution Model. This interactive model developed by BorgWarner can help you create a contribution strategy for maximizing Company contributions while minding the limits set by the IRS for contributions to your RSP account. The model provides scenarios with the following information: Estimated employee contributions deducted from each paycheck (Savings Account Before Tax, the Retiree Health Account, and Savings Account After Tax) and estimated employer contributions (Company Retirement and Company Match) posted to your RSP account. Total eligible Company contributions and any missed Company contributions based on your deferral percentages. Any limits that you may or may not be reaching that could result in missed Company contributions into your RSP account.

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52 IQ Investor Questionnaire A B C D E

53 Asset mix 20% 80%

54 Asset mix 20% 30% 80% 70%

55 Asset mix 20% 30% 40% 80% 70% 60%

56 Asset mix 31% 40% 69% 60% Current asset mix Suggested asset mix

57 SAVING ENOUGH? INVESTING WISELY?

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59 vanguard.com/retirementplans $

60 For more information about any fund, including investment objectives, risks, charges, and expenses, call Vanguard at to obtain a prospectus. The prospectus contains this and other important information about the fund. Read and consider the prospectus information carefully before you invest. You can also download Vanguard fund prospectuses at vanguard.com. All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer s ability to make payments. U.S. government backing of Treasury or agency securities applies only to the underlying securities and does not prevent share-price fluctuations. Unlike stocks and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest. Investments in stocks and bonds issued by non-u.s. companies are subject to risks including country/regional risk and currency risk The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds. BBBBLDKJ

61 vanguard.com/retirementplans Quick-start guide

62 vanguard.com/enroll vanguard.com/retirementplans