Saving the Smart Way.. with the Pride, Inc. 401(k)/PS Plan Bell State Bank & Trust

Transcription

1 Saving the Smart Way.. with the Pride, Inc. 401(k)/PS Plan Bell State Bank & Trust

2 To Days Topics Why 401(k)? How your plan works The Investment Decision

3 How are you going to pay for Retirement? According to AARP, over 80% of the Baby Boomer Generation expect to continue to work beyond retirement age. WHY? Social Security is not enough! Average monthly benefit paid by Social Security is $1,002 ($12,024 per year). Source: SSA as of Feb 2006

4 Financial Security at Retirement EBRI Retirement Confidence Survey indicates that more than 60% of the respondents are not saving enough to be able to stop working at retirement age. Rule of Thumb Your retirement nest egg should be worth 10 times your salary at retirement.* * Source PSCA

5 How much should you save? If you are in your You should save 20s 7% 30s 10% 40s 15% 50s 20% Save as much as you can its never too late!

6 So why 401(k)? Because its one of the most important ways for you to ensure your financial security at retirement. It takes no discipline! Contributions are pre-tax Pay yourself first!

7 How can I save for Retirement if I can t pay my bills?! If you can t afford to pay your bills now when you DO have a paycheck, how will you pay them at retirement when you DON T? Suze Orman

8 Pride, Inc, Inc. 401(k)/PS Plan Eligibility All employees who are at least 21 years old and have completed at 1 Year of Service in which you work 1000 hours are eligible. Entry date is the July 1, or January 1 after completing eligibility requirements. Rollover Contributions Tax free rollover from previous employers plan Tax free rollover from IRA s

9 Pre-tax Savings Single, annual limit $17,500 for 2013 $5,500 catch-up contribution for participants who are or will be at least 50 by December 31, 2013

10 Save on Taxes Today Pre-tax Savings in the Plan After-tax Savings Annual Gross Salary $25,000 $25,000 6% Contribution to 401(k) (1,500) 0 Taxable Pay 23,500 25,000 Less est. 25% Fed/State Taxes (5,875) (6,250) 6% Savings in a Taxable Acct 0 (1,500) Take Home Pay $17,625 $17,250 Increase in Take-Home Pay! $375

11 Plan Basics Company Contributions Employer Matching Contribution :Employer matching contributions; the employer will match 100% on the first 4% of employee contributions contributed. Employer Discretionary Contributions: Must work 1,000 hours and employed on the last day of the plan year. Vesting: Salary Deferrals & Rollover contributions will be 100% Vested at all times. Vesting Employer Matching & Profit Sharing: Years of Service Vested Amount 1 25% 2 50% 3 75% 4 100% 5 100% 6 100%

12 Distributions Distributions: Hardship Withdrawals Age 59 ½ Termination of employment Death Disability

13 The Investment Decision

14 Things to Consider Risk Tolerance Time Horizon HOW MUCH DO YOU KNOW ABOUT INVESTING? Do it yourself using mutual funds Use professionally managed portfolios Bell Lifestyle Funds or Bell Target Date Fund

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16 Asset Allocation Funds Risk-based Funds Bell Disciplined Stock Fund Potential Return Bell Lifestyle Moderately Conservative Bell Lifestyle Moderately Aggressive Bell Lifestyle Balanced Bell Lifestyle Conservative Bell Disciplined Bond Fund Potential Risk The above fund array design is for illustration purposes only and is not intended to depict actual risk and return characteristics of different asset class categories or specific funds

17 Asset Allocation Funds Target Date-Funds Bell Target Retirement 2055 Bell Target Retirement 2050 Bell Target Retirement 2045 Potential Return Bell Target Retirement 2040 Bell Target Retirement 2035 Bell Target Retirement 2030 Bell Target Retirement 2025 Bell Target Retirement 2020 Bell Target Retirement 2015 Bell Target Retirement Potential Risk The above fund array design is for illustration purposes only and is not intended to depict actual risk and return characteristics of different asset class categories or specific funds

18 Single Style Funds Specialty Small Cap Mid Cap Value: International: American Euro Pacific Potential Return Stable Value Bond Core: Pimco Total Return Large Cap Value: Columbia Diversified Equity Index Columbia Contrian Core Fund Z Growth: Value: John Handcok Mid Cap Val Growth: Columbia Acorn Invesco US Small Cap INDEX Fidelity Small Cap Index Growth: Vanguard Small Cap Growth Other Nuveen RealEsate W & R Science and Technology Federated Capital Preservation Growth Fund of America Potential Risk The above fund array design is for illustration purposes only and is not intended to depict actual risk and return characteristics of different asset class categories or specific funds

19 The Investment Questionnaire takes the emotions out of the decision Younger workers can tend to be risk averse and invest too conservatively. Older workers are often trying to make up for lost time and tend to invest too aggressively based on their shorter time horizon. Investment Questionnaire removes the emotions from the decision.

20 Its never too late. If you are eligible, you can sign up now.

21 bellbanks.com myplan.bellbanks.com

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25 Not FDIC Insured No Bank Guarantee May Lose Value

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39 Any questions? BELL (2355)