OppenheimerFunds Payroll Deduction IRA Participant Guide

Transcription

1 Retirement OppenheimerFunds Payroll Deduction IRA Participant Guide Not FDIC Insured May Lose Value Not Bank Guaranteed OppenheimerFunds is not undertaking to provide impartial investment advice or to provide advice in a fiduciary capacity.

2 Retirement IRA OppenheimerFunds What s the Secret to Saving for a Successful Retirement? In addition to a diverse investment asset allocation, a disciplined investment approach consisting of automatic and regular contributions can help you save successfully for retirement. And with the OppenheimerFunds Payroll Deduction IRA, you can do just that. By automatically deducting your contribution from each paycheck, you take advantage of a systematic, convenient and disciplined approach to saving for retirement. 1,2 The OppenheimerFunds Payroll Deduction IRA allows you to make automatic, regular contributions to a Traditional IRA and/or Roth IRA if eligible, and enjoy the benefits of tax-deferred or tax-free growth. Just determine how much you want to invest each pay period 2 and the plan does the rest! Why an OppenheimerFunds Payroll Deduction IRA? Convenience Automatic contributions. 1,2 No mandatory participation requirements. Easy way to implement dollar cost averaging. 3 Flexibility Ease Investment Excellence You decide how much to invest each pay period. You can start or stop your contributions whenever you want. You can contribute to a Traditional IRA and/or Roth IRA (if eligible) or make contributions on behalf of your spouse. 4 Sign-up takes just a few moments. Your employer handles all the paperwork. We offer you information you need to help you make informed decisions. Over 50 years of investment experience. Wide selection of mutual funds across different asset classes. Excellent customer service Automatic investment plans do not assure a profit or protect against losses in declining markets. Before investing, investors should evaluate their long-term financial ability to participate in such a plan. 2. Contributions are subject to IRS limitations. Maximum contribution is $5,500 in Investors age 50 and over may make catch-up contributions of an additional $1, See the section on dollar cost averaging on page Check with your employer about any company restrictions related to setting up a Payroll Deduction IRA on behalf of your spouse.

3 The Right Way to Invest Why Should I Invest Now? The early bird gets the worm. The sooner you start saving, the more your money will work for you. Those who begin saving at an earlier age will typically have a significant advantage. Why? Compounding. Compounding occurs when the earnings on your investments begin to generate their own earnings. Over time, this process can have a huge impact on the growth of your money. It s never too late to begin saving. Every little bit adds up. With a Payroll Deduction IRA, you can begin taking advantage of compounded investment growth. Exhibit 1 Compounding: The Value of an Early Start Twenty-five-year-old Eve 5 is an early bird. She puts $100 a month into her Traditional IRA plan every year until she s 35. After contributing $12,000 for those 10 years, though, she never adds another dime. Paul, on the other hand, is a procrastinator. He doesn t tuck anything away until he s 35. He also saves $100 a month for 10 years, and then doesn t add another dime, totaling $12,000 in contributions. At an annual return of 6%, who wins? Despite saving the same amount, Eve maintains a substantial edge almost 45% over Paul. Her extra 10 years of compounding pays off substantially in the long run. Eve, the early investor, comes out $42,524 ahead in 40 years. $100,000 Eve Early investor Paul Late investor Eve $96,295 by age 65 80,000 60,000 Saves $100 a month for 10 years starting at age 25. Saves $100 a month for 10 years starting at age 35. Paul $53,771 by age 65 40,000 20, Age This chart assumes a fixed annual rate of return of 6%, on a tax-deferred basis, with earnings reinvested. This hypothetical example is not intended to show the performance of any Oppenheimer fund for any period of time, or fluctuation in principal value or investment return. At withdrawal, taxes must be paid on the amount withdrawn. Periodic investment plans do not ensure a profit or protect against loss in declining markets. 5. The persons portrayed in this example are fictional. This material does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted. 3

4 Retirement IRA OppenheimerFunds Benefits of Dollar Cost Averaging Dollar cost averaging is simply the process of investing a specific amount of money in the same security at regular intervals. In doing so, you acquire more shares when prices are down and fewer when prices are up. Though dollar cost averaging doesn t guarantee you ll make a profit or avoid a loss it generally lowers your average cost per share while reducing your chances of investing too much at a market peak. 6 Regular Investing May Smooth the Ride Investing $1,200 All at Once vs. $100 a Month for One Year Lump Sum $ shares at 8 $10/share 4 0 Jan Feb Mar April May June July Aug Sept Oct Nov Dec Share Price Dollar Cost Averaging $16 Shares purchased each month Jan Feb Mar April May June July Aug Sept Oct Nov Dec Share Price Total Shares Purchased 120 shares Average price: $10/share Total Shares Purchased 144 shares Average price: $9/share 4 6. Since dollar cost averaging involves continuous investments regardless of price levels of fund shares, investors should consider their financial ability to continue purchases through periods of low price levels. Systematic investment plans do not guarantee profit or protect against losses in declining markets.

5 The Right Way to Invest Which IRA Is Right for Me? IRAs are one of the best ways to save for retirement. They offer a high degree of personal control and feature a range of investment options to suit your individual objectives. Most significantly, IRAs enjoy considerable tax advantages. Each IRA type has its own features and benefits besides the ones mentioned here, and you should talk to your financial advisor about which IRA is appropriate in your individual case. The OppenheimerFunds Payroll Deduction IRA allows you to make automatic, regular contributions into one or both of the following account types. The maximum permitted cannot exceed $5,500 or $6,500 if you are age 50 and above. Traditional IRA Roth IRA Available to all investors and their nonworking spouses. Contribution amount may not exceed total income. Some investors will get a current year tax deduction for part or for all of their contributions. Earnings accumulate on a tax-deferred basis (taxes are paid when you withdraw your money). Eliminates federal taxes on investment earnings, and withdrawals are tax free as long as the account has been open for at least five years and the distribution is made after age 59½, or due to death or disability, for the purchase of a first home or other allowable distributions. No current year tax deductions. How Do I Enroll? Easily. Evaluate Your Options. Read through the information OppenheimerFunds has provided and review the fund prospectuses before investing. Complete the Payroll Deduction IRA Application. Determine which type of IRA you would like to invest in, indicate the amount of your salary you want to contribute, and specify the percent asset allocation for the funds you choose. There is a minimum contribution of $50 per fund per pay period. Return the Completed Application to Your Employer. Be sure to retain a copy for your own records. If you have any additional questions, please contact your financial advisor or OppenheimerFunds IRA Resource Center at For additional information and to learn more about how IRAs work, review the IRA Choices brochure (RB ) and the Planning a Successful Retirement brochure (RB ) or log on to oppenheimerfunds.com. 5

6 The earlier you start saving for retirement, the harder your money can work for you. The OppenheimerFunds Payroll Deduction IRA is a simple, disciplined way to save. Contributions are automatically deducted from each paycheck into an OppenheimerFunds Traditional IRA and/or Roth IRA if eligible. Speak to your financial advisor about whether the OppenheimerFunds Payroll Deduction IRA is the right choice to help you build your retirement savings. Visit Us oppenheimerfunds.com Call Follow Us Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. This material is provided for general and educational purposes only, is not intended to provide legal or tax advice, and is not for use to avoid penalties that may be imposed under U.S. federal tax laws. OppenheimerFunds is not undertaking to provide impartial investment advice or to provide advice in a fiduciary capacity. Contact your attorney or other advisor regarding your specific legal, investment or tax situation. Before investing in any of the Oppenheimer funds, investors should carefully consider a fund s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com or calling CALL OPP ( ). Read prospectuses and summary prospectuses carefully before investing. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. 225 Liberty Street, New York, NY OppenheimerFunds Distributor, Inc. All rights reserved. RE May 2, 2018