with the Northgate Gonzalez Markets, Inc. 401(k) plan.

Transcription

1 with the Northgate Gonzalez Markets, Inc. 401(k) plan.

2 Whether your retirement is 40 years away or on the horizon, it is important to take stock of your situation and take charge. Industry professionals estimate that some Americans will spend nearly one third of their lives in retirement. Fortunately, the Northgate Gonzalez Markets, Inc. 401(k) Plan offers tools, education and investment options to help you prepare for retirement. 2

3 Enrollment overview Give back to your retirement Reaching your retirement goals can take a lot of preparation. As a general rule, you ll need at least 75 to 80 percent of your final working salary to maintain your lifestyle during retirement. The Northgate Gonzalez Markets, Inc. 401(k) Plan is a way to start preparing for your retirement. Your plan offers you tools, education and investment options that can help prepare you for your future. How much should I contribute towards retirement? What do you see yourself doing when you retire? Maybe you re looking forward to spending more time with your family and sharing your hobbies with others. Or maybe you hope to travel the world! No matter how big or small your retirement goals may be, it takes preparation to achieve them. Fortunately, the Northgate Gonzalez Markets, Inc. 401(k) Plan offers a retirement plan to help you reach your objectives and goals. For the vast majority of Americans, Social Security benefits will not provide enough income to cover expenses and make retirement comfortable. When you re deciding how much to contribute towards your retirement, a good place to start is deciding how you ll use your retirement account. Will your retirement account be your primary source of income or fun money to supplement your lifestyle? The answer will have an impact on how much you decide to contribute towards retirement. To find out more about your estimated future Social Security Benefits, visit the Social Security Administration website at or call Creating your investment strategy The amount of investment risk you are willing to take is a very important decision. Remember, all investments possess some element of risk, including possible loss of principal. Risk is the potential for an investment to lose value. Return is the change in value on an investment. Understanding the relationship between risk and return is very important as you develop your investment strategy: Increased risk offers the potential for a greater return over time, but there is also a greater potential for loss. Lower risk offers the potential for a lower return over time, but there is also less potential for loss. Risk versus Return Money market Fixed interest Bonds Balanced Lower risk: Lower potential return Less potential for loss Large-cap stock Mid-cap stock Small-cap stock Higher risk: Higher potential return Greater potential for loss International/ Global stock Specialty stock In the investment world, risk refers to the elements that determine whether an investment s value or return will be lower or higher than expected. Generally, the greater the risk, the greater the potential return. The risk/return meter above shows the relative risk and return characteristics of different investment types. 3

4 Diversification and asset allocation As an investor, it s important to find balance. You want stability, but you also want growth potential. You re willing to take on some investment risk, but only up to a certain point. Diversification is a technique that seeks to stabilize risk by allocating investments among various financial instruments, industries and other categories. Asset allocation is an investment technique that aims to balance risk and reward by allocating assets according to your goals, risk tolerance and the amount of time you have until retirement. There is no simple formula that can find the right asset allocation for you, as this will depend largely on your personal situation. The use of diversification and asset allocation as part of an overall investment strategy does not assure a profit or protect against loss in a declining market. Contribute now, pay taxes later The money you contribute to an employer-sponsored retirement plan is taken directly off the top of your paycheck before income tax and any other automatic weekly withdrawals. The portion deducted goes directly into your retirement account, which reduces your current taxable income and makes your current income tax burden less. As a result, you ll pay less in your current income taxes for the year, because in the eyes of the IRS, you ve been paid less money. Amounts withdrawn from qualified retirement accounts are taxable when distributed. Ideally, distributions will occur at retirement, when you could be in a lower income tax bracket. So, you are not paying taxes on the money you invest today and you could pay taxes at a lower rate when you finally do take home your money. Note: Withdrawals prior to age 59½ may be subject to a 10 percent IRS penalty. Tax-deferred versus taxable With a qualified plan, you invest pre-tax dollars into a tax-deferred account. Money is deducted from your paycheck before taxes are imposed via withholding, so you pay no income tax on the initial investment. If your account experiences growth, that growth is also tax deferred, so there is no tax on any gains in the account. Ultimately, when money is withdrawn, it is all taxed as ordinary income. With a taxable investment, you will pay normal income taxes on money you receive. When you invest money, any growth you have is taxed and you need to pay the tax in the same year as the gain, if it is realized. Unrealized gains are not taxed currently and are only taxed when a sale occurs. Dividends and capital gain are taxed at 15 percent or less, for some wage earners, but the tax will apply even if you opt to reinvest dividends and capital gains. The example below compares a monthly contribution of $250 into a tax-deferred retirement account that is earning an 8 percent annual percentage rate to the same monthly contribution and earnings rate in a taxable investment with a 25 percent tax rate. Contributing to a taxable investment would require taxes on the $250 contribution, netting only $ for contributions each month. In 10 years, the taxable investment would have grown to $32,281 while the tax-deferred retirement account would be at $34,539, net after taxes a difference of $2,258. Over a period of 30 years, the difference is even more dramatic. Here the taxable investment grows to just $221,183 while the tax-deferred investment grows to $281,535, net after taxes. The difference is $60,352! Investment growth comparison 10 years 20 years 30 years $32,281 $34,539 $95,881 $111,233 Taxable investment i.e. savings account (at 25% tax rate) Tax-deferred investment (25% tax applied at end of period) $221,183 $281,535 0 $100,000 $200,000 $300,000 4

5 Enrollment overview Note: All numeric examples are hypothetical. These hypothetical investment returns are for educational purposes only and are not indicative of any particular investment or performance. Hypothetical returns assume reinvestment of earnings. Actual returns or principal value will vary. An investor should consider his or her current and anticipated investment horizon and income tax bracket when making an investment decision, as the example may not reflect those factors. Investing involves risk, including the potential loss of principal. Your actual results may vary. Tax laws are complex and subject to change. Neither AUL, OneAmerica Securities, Inc. nor their representatives provide tax or legal advice. Plan highlights Eligibility requirements Employee and employer contributions Participation in the plan is open to employees who meet the following requirement(s): Attainment of age 18 Completion of 6 month(s) of service Plan entry dates Employee and employer contributions Participants may participate in the plan effective on the first day of the month, following completion of the above plan eligibility requirements. Excluded employees Employee and employer contributions The plan does not allow for participation by employees who are Union employees. Contributions Employee contributions Generally you can contribute up to 100 percent of your wages, salary, earnings (and bonus, if applicable), up to the IRS allowable limits. Visit for information on the IRS limits for the current calendar year. You can designate your contribution as a pre-tax deferral, a Roth deferral or a combination of both. Roth deferrals are after-tax contributions, but earnings on these contributions accumulate tax-free in your account and withdrawals at retirement may be exempt from federal income tax. You may increase or decrease the amount of your contributions each payroll period. Once you discontinue contributions, you may only start again as provided under the terms of the plan. Automatic enrollment To help you contribute toward retirement, your plan has an automatic enrollment feature. Automatic enrollment allows you to take no action in regard to participating in your plan. If you are a newly eligible employee, 2 percent of your compensation will be deducted from your paycheck and invested in the plan s Target Date Investment in accordance with your age. In addition, your contribution will increase by 1 percent annually, up to a total deferral rate of 4 percent. You may change the contribution and investment elections or elect not to participate by going online or calling Employer matching contributions Your plan provides for an employer matching contribution equal to 50 percent of your elective contribution up to 4 percent of your eligible compensation. Vesting Employee contributions You are always 100 percent vested in your deferral contributions to the plan, plus any earnings they generate. Employer matching and profit sharing contributions Contributions made to the plan on your behalf, plus any earnings they generate, are subject to the following vesting schedule: Less than 2 years of service: 0% 2 years of service: 20% 3 years of service: 40% 4 years of service: 60% 5 years of service: 80% 6 or more years of service: 100% Rollovers and transfers Your plan allows for the rollover or transfer of an existing qualified retirement plan account from a prior employer. You are always 100 percent vested in any rollovers or transfers to the plan, plus any earnings they generate. 5

6 Withdrawals/Distributions Generally, money may be withdrawn from your account for: Attainment of age 59½ Death Disability Financial hardship In this case, any distribution would be further limited to the total amount contributed and contributions must be suspended for six months after receipt of a distribution of hardship Note: Roth after-tax contributions may not be withdrawn for a financial hardship. In-service withdrawals of Roth after-tax contributions are not permitted Loans Retirement at the plan s normal retirement age Termination of employment Section 404(c) Notice The plan is intended to be an ERISA Section 404(c) plan. This means that you exercise control over the investments in your plan account. You will choose which investments to put your money in now and you can choose different investment options as your needs change. This allows you to invest in the way that best meets your personal goals. Your investment elections remain in force until changed. Your employer and the fiduciaries of the plan may be relieved of liability for any losses that your account may experience as a result of investment choices made by you or your beneficiary. If you do not make any investment option elections, your contributions will be credited to the default investment option identified in the contract. Once you provide investment option elections, new contributions will be allocated according to those elections. Monies defaulted to the default investment option will remain invested in that option until you transfer such amounts to another investment option. All or a part of your account value may be transferred between the available variable investment options at any time during the Accumulation Period, but no more frequently than once per day. However, AUL reserves the right to reject any transfer request which it reasonably determines to be made in connection with abusive trading practices, such as market timing or excessive trading by an investor or by accounts of investors under common control. The following transfer restriction will apply to monies in the Fixed Interest Account (FIA), including monies defaulted to the FIA: 90-day FIA Transfer Restriction One hundred percent (100%) may be transferred from the FIA at any time. However, once a transfer has been made from your FIA, transfers back into the FIA are allowed only after 90 days have elapsed since your last transfer from the FIA. As a plan participant, you may request certain information from Lorena Eulloqui, Northgate Gonzalez Markets, Inc., at or 1201 Magnolia Avenue, Anaheim, CA This information includes: annual operating expenses that reduce rate of return for each plan investment; financial statements, reports, or other materials relating to plan investments provided to the plan; a list of assets contained in each plan investment portfolio; the value of those assets and fund units or shares; the past and current performance of each plan investment; and information on the value of shares or units in your own account. Section 404(c)(5) Notice The plan is intended to be an ERISA Section 404(c) (5) compliant plan. This means that if you do not make any investment option elections, your contributions will be credited to the default investment option identified in the contract (which is intended to be a Qualified Default Investment Alternative, or QDIA ). Once you provide investment option elections, new contributions will be allocated according to those elections. Monies defaulted to the default investment option will remain invested in that option until you transfer such amounts to another investment option. Additional plan specific provisions or limitations may apply. Please refer to your summary plan description (SPD) or contact your plan administrator for assistance. You can enroll in the plan, select your investment options or manage your account (which includes the initiation of transfers and/or the changing of your investment elections) through OneAmerica TeleServe ( ), or by registering for and then logging into your secure account at You may also contact a participant services representative at

7 Enrollment overview Getting started Whether you prefer the internet or telephone, there s an easy-to-use enrollment tool available to you 24 hours a day, seven days a week. Preparation Have your plan number available Decide how much you want to contribute per paycheck Decide how you want to invest your contributions Enrollment 1. Have your plan number available: G Go to 3. Click on Enroll or View Account 4. Complete the step-by-step registration process, which includes: Creation of User ID and Password Creation of password recovery information OneAmerica TeleServe OneAmerica TeleServe is an interactive voice response (IVR) system that provides a direct link to your retirement account information. Registration and enrollment 1. Call Enter your Social Security Number 3. Re-enter the last four digits of your Social Security Number 4. Enter the numeric portion of your plan number: G Enter your Birth Date (mm/dd/yyyy) 6. Choose and enter a Password 7. Answer the questions about whether you want to make a deferral and the amount you want to defer 8. Enter your investment option elections (Option 2 for the main menu) 9. Indicate whether you have other retirement accounts that you wish to roll over to your AUL retirement plan Selecting your investments Once you are enrolled in the plan, you will need to select your investment options from the list of options available to your plan. AUL Retirement Services provides you with resources and information necessary to select investment options to meet your specific needs. The performance report, available on the Account Services website, provides you with a snapshot of how an investment option has performed historically over various reporting periods. Past performance is not a guarantee of future results. In addition, the Investment Option Summary pages offer information on risk, return, expenses, holdings and other data points you can use to profile specific investment options. Note: Non-registered group annuity contracts are issued by American United Life Insurance Company (AUL), One American Square, Indianapolis, IN 46282, Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary or investment advice. Retirement plans from American United Life Insurance Company (AUL) are funded by an AUL group annuity contract. While a participant in an annuity contract may benefit from additional investment and annuity related benefits under the annuity contract, any tax deferral is provided by the plan and not the annuity contract. A variable annuity contract is a long-term, tax-deferred investment designed for retirement that will fluctuate in value. Any investment involves risk, including potential loss of principal. There is no assurance that the investment objective of any investment option will be achieved. Please note: The above steps may vary as a result of provisions specific to your plan. 7

8 About OneAmerica A national leader in the insurance and financial services marketplace for more than 140 years, the companies of OneAmerica help customers build and protect their financial futures. OneAmerica offers a variety of products and services to serve the financial needs of their policyholders and customers. These products include retirement plan products and recordkeeping services, individual life insurance, annuities, asset-based long-term care solutions and employee benefit plan products. Products are issued and underwritten by the companies of OneAmerica and distributed through a nationwide network of employees, agents, brokers and other sources that are committed to providing value to our customers. To learn more about our products, services and the companies of OneAmerica, visit OneAmerica.com/companies. American United Life Insurance Company a OneAmerica company One American Square, P.O. Box 368 Indianapolis, IN OneAmerica Financial Partners, Inc. All rights reserved. OneAmerica and the OneAmerica banner are all registered trademarks of OneAmerica Financial Partners, Inc. R /02/18