Humberston Auto Group 401(k) Summary Guide December 31, Tim Wood, Principal David Foster, CFP, Principal

Transcription

1 Humberston Auto Group 401(k) Summary Guide December 31, 2018 Tim Wood, Principal David Foster, CFP, Principal Foster Wealth, Inc. is a Registered Investment Advisor

2 Welcome to the Humberston Auto Group 401(k) Plan! Congratulations on taking your first steps towards a secure life when you retire. This guide includes all the materials you need to get started. We recognize that investing for your retirement can sometimes be confusing. Likely the most important thing to know is that the Humberston Auto Group 401(k) Plan has appointed Foster & Wood as our advisors. Foster & Wood bring 30 years of combined experience in managing retirement plans. Because they do not allow commissions or any other conflicts of interest in the plans they manage you can confidently ask them questions or seek their advice without worrying about what s in it for them. Please feel free to contact Tim Wood or David Foster with any questions about investment strategy, filling out the forms, etc. Tim Wood tim@fosterandwood.com David Foster david@fosterandwood.com Welcome to the Beaverton Toyota family and congratulations on taking this step in your career with us.

3 Plan Highlights Contribution Maximums Maximum 2019 annual contribution is $19,000, not to exceed 95% of pay A catch-up contribution of $6,000 is available to those over 50 years old Eligibility Age 21 or over and 6 months of service Plan entry is the 1 st day of the calendar quarter after service requirement is met. Rollovers of previous 401k plan balances are allowed at any time Don t need to wait for eligibility listed above Call Foster & Wood if you have questions, and/or would like a copy of the required form. Loans are available Under federal rules, the minimum loan balance is $1,000 and the maximum is $50,000 Can t exceed 50% of your vested balance In service distributions are available to employees who are at least 59 ½.

4 Plan Highlights - Investments Mutual funds low cost, no commission. reviewed by your investment advisor and plan s trustees Five professionally managed risk based portfolios are available You can choose your own mix of funds. Foster & Wood, our plans investment advisor, serves our plan as a fiduciary. They are available to you to answer any questions, help you decide on a long term investment strategy, or help you with any other investing or retirement question. Contact information: Tim Wood tim@fosterandwood.com David Foster david@fosterandwood.com

5 Automatic Enrollment Automatic Enrollment Once you are eligible, if you do nothing, you will be automatically enrolled at 4% of your pay (pre-tax) and your savings will be invested for you in a Vanguard Target Date Fund consistent with your age. Automatic Escalation Every year your contribution increases by 1% of your pay, up to 10% of your pay at which points the escalation stops. It is your right to request not to be enrolled if you prefer. You have 60 days after a contribution has been made to request a distribution. AFTER THIS PERIOD, ANY INVESTED FUNDS MUST REMAIN IN THE PLAN UNTIL RETIREMENT OR YOU CHANGE EMPLOYERS UNDER FEDERAL LAW.

6 How Can Auto Features Work For Me? Gross 401(k) Taxable State & Net Tax Pay Contribution Income Federal Pay Savings 5 Years 10 Years 25 Years Taxes $15/Hour 1, , $15/Hour 1, , , , , Difference in Take Home Pay % 1, , , , , % 1, , , , , Assumes 8% Federal + 9% State of Oregon Net Pay Excludes Social Security + Medicare

7 Plan Highlights Roth 401(k) Traditional 401(k) Tax deduction when you contribute Reduces the tax you pay every pay period In the future, withdrawals are taxed as income Roth 401(k) No tax deduction when you contribute Money comes out tax free Company contributions are never Roth. Matching and Profit Sharing are always counted as Traditional, even if your contributions are Roth contributions. You can make traditional contributions, Roth contributions, or a mixture of both, subject to the maximums.

8 Roth vs. Traditional IRA / 401(k) Example: Your tax rate now vs. later is the most important consideration If your tax rate now vs. later is the same, the options are similar 25% Tax at Contribution 25% Tax at Withdrawal Traditional IRA / 401(k) $4,000 Grows 10x over many years $40,000 Money to spend after taxes $30,000 $10,000 to taxes Roth IRA / 401(k) $4,000 $30,000 0% Tax on Roth IRA / Roth 401(k) $30,000 $1,000 to taxes

9 What is a QDIA? A Qualified Default Investment Alternative (QDIA) is the default fund for the plan and is only used when an employee does not make an affirmative investment selection. If you end up in the QDIA, you can change it any time. The QDIA for the Humberston Auto Group 401(k) Plan is the Vanguard Target Date Series predicated on your age. More information can be found Yahoo! Finance or your plan s website. A QDIA notice will be sent to each of you following this presentation.

10 Plan Website beavertontoyota401k.fosterandwood.com Select Participant Login At the next website, the first time you login, your username will be your full social security number WITHOUT any dashes or periods and your password will be your birthdate MMDDYYYY. You will receive an that will prompt you back to begin your enrollment. At the website you can model a loan, view your investments, change investments, etc.

11 Conservative 20% Stock / 80% Fixed Income Mutual Fund Weighted Avg Net Expense Ratio: 0.15% Vanguard S&P 500 Index Adm. 4% Becker Value Equity Inst. 6% Vanguard Small Cap Growth Adm. 1% DFA US Targeted Value 1% DFA International Value 3% DFA Int l Small Cap Value 2% Vanguard REIT Index Adm. 2% DFA Emerging Markets Core 1% Vanguard Short Invmt Grade Adm. 15% Vanguard Interm Invmt Grade Adm. 12% Vanguard Shrt-Trm Bnd Ind Adm. 28% Vanguard Int-Term Bnd Ind Adm. 25% Performance Disclosure The performance data quoted represents past performance and does not guarantee future results. The performance data quoted is net of mutual fund expense ratios but gross of any advisory or administrative fees charged to the plan. The investment return and principal value of an investment will fluctuate thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.

12 Mod. Conservative 40% Stock / 60% Fixed Income Mutual Fund Weighted Avg Net Expense Ratio: 0.21% Vanguard S&P 500 Index Adm. 7% Becker Value Equity Inst. 10% Vanguard Small Cap Growth Adm. 3% DFA US Targeted Value 3% DFA International Value 6% DFA Int l Small Cap Value 4% Vanguard REIT Index Adm. 4% DFA Emerging Markets Core 3% Vanguard Short Invmt Grade Adm. 15% Vanguard Interm Invmt Grade Adm. 12% Vanguard Shrt-Trm Bnd Ind Adm. 18% Vanguard Int-Term Bnd Ind Adm. 15% Performance Disclosure The performance data quoted represents past performance and does not guarantee future results. The performance data quoted is net of mutual fund expense ratios but gross of any advisory or administrative fees charged to the plan. The investment return and principal value of an investment will fluctuate thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.

13 Moderate 60% Stock / 40% Fixed Income Mutual Fund Weighted Avg Net Expense Ratio: 0.26% Vanguard S&P 500 Index Adm. 10% Becker Value Equity Inst. 14% Vanguard Small Cap Growth Adm. 6% DFA US Targeted Value 8% DFA International Value 7% DFA Int l Small Cap Value 5% Vanguard REIT Index Adm. 6% DFA Emerging Markets Core 4% Vanguard Short Invmt Grade Adm. 9% Vanguard Interm Invmt Grade Adm. 9% Vanguard Shrt-Trm Bnd Ind Adm. 11% Vanguard Int-Term Bnd Ind Adm. 11% Performance Disclosure The performance data quoted represents past performance and does not guarantee future results. The performance data quoted is net of mutual fund expense ratios but gross of any advisory or administrative fees charged to the plan. The investment return and principal value of an investment will fluctuate thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.

14 Mod. Aggressive 80% Stock / 20% Fixed Income Mutual Fund Weighted Avg Net Expense Ratio: 0.30% Vanguard S&P 500 Index Adm. 16% Becker Value Equity Inst. 16% Vanguard Small Cap Growth Adm. 8% DFA US Targeted Value 12% DFA International Value 8% DFA Int l Small Cap Value 6% Vanguard REIT Index Adm. 8% DFA Emerging Markets Core 6% Vanguard Short Invmt Grade Adm. 6% Vanguard Interm Invmt Grade Adm. 6% Vanguard Shrt-Trm Bnd Ind Adm. 4% Vanguard Int-Term Bnd Ind Adm. 4% Performance Disclosure The performance data quoted represents past performance and does not guarantee future results. The performance data quoted is net of mutual fund expense ratios but gross of any advisory or administrative fees charged to the plan. The investment return and principal value of an investment will fluctuate thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.

15 Mutual Fund Weighted Avg Net Expense Ratio: 0.38% Aggressive 100% Stocks Vanguard S&P 500 Index Adm. 14% Becker Value Equity Inst. 18% Vanguard Small Cap Growth Adm. 11% DFA US Targeted Value 17% DFA International Value 12% DFA Int l Small Cap Value 10% Vanguard REIT Index Adm. 10% DFA Emerging Markets Core 8% Performance Disclosure The performance data quoted represents past performance and does not guarantee future results. The performance data quoted is net of mutual fund expense ratios but gross of any advisory or administrative fees charged to the plan. The investment return and principal value of an investment will fluctuate thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.

16 Update your retirement plan Call or Anytime! Help with your contribution level or traditional vs. Roth contributions. Help picking your investment portfolio General investment questions Contact information: Tim Wood David Foster Link to Foster & Wood at