Back To School Webinar On 401(k)s

Transcription

1 Back To School Webinar On 401(k)s

2 Today s Agenda We ll Start With Your Questions Why Save For The Future? How Awesome Is Your 401(k) Let s Talk About Control Participating Is A Piece of Cake 2

3 Trusted Partner: Founded in 1985, Verisight s mission is to be the best service provider of retirement plans Transparency: Verisight offers unbiased solutions Expertise: Verisight is recognized as a leader in retirement plan industry 3

4 Let s Start With Your Questions First 4

5 Are You Wondering?? Question: Who Decides How Much To Contribute? What s The Max? You Decide. The Maximum for 2014 is $17,500 If You Are Age 50 or Older, You Can Contribute Up To $23,000 Question: My Company Makes a Match. Is That Part of the $17,500 Limit? No, The $17,500 Refers Only To Your Own Contributions 5

6 Are You Wondering?? Question: Finances are a Little Tight Now Can I Stop Contributing? You Can Stop Contributions At Any Time Question: What is the difference between Pre-Tax/Traditional and Roth in My 401(k)? 6

7 Pre-Tax vs. Roth After-Tax Contributions Pre-Tax 401(k) Roth After-Tax 401(k) Contributions Before taxes are paid After taxes are paid Investment Earnings No taxes paid while in 401(k) No taxes paid while in 401(k) 2014 Contribution Limits $17,500 ($23,000 if 50 or older) $17,500 ($23,000 if 50 or older) Income Restrictions No No Taxes Paid When money is withdrawn When money is contributed 7

8 A Roth 401(k) After-tax contributions to your 401(k) account Upon withdrawal, these contributions AND any earnings/growth are tax-free as long as: You are at least 59 ½ years of age The first Roth contribution was made at least 5 years previously Same investment choices You can make pre-tax contributions, Roth after-tax contributions, or a combination of the two 8

9 Are You Wondering?? Question: I Want to Make a 6% Contribution. What Is That In Dollars? $2,000 Gross Salary Each Pay Period x.06 6% That You Would Like To Contribute To 401(k) $ % of Paycheck is $120 9

10 What s An Employer Match? Sample Employer Match: 50% of the first 6% of employee contribution Two Sample Vesting Schedules: 1 year service = 20% and 100% immediate vesting 2 years service = 40% 3 years service = 60% 4 years service = 80% 5 years service = 100% 10

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12 How Does A Loan Work In A 401(k)? $1,000 minimum up to 50% of your vested account balance One (1) outstanding loan allowed at a time Interest rate is Prime Rate plus 1% - currently 4.25% Repayment within 5 years; home loan repayment 30 years No tax consequences if repayment is timely 12

13 What About My Other Retirement Plans? Rollovers Into Your Current 401(k) Rollovers of these plans may be allowed: 401(k), 403(b), 457 Benefits of rollovers: Consolidate retirement monies One statement Potential cost savings Do you have rollover? Contact our Customer Service team:

14 What Happens If I Leave This Company? Portability 1. Rollover to 401(k) at next company of employment 2. Rollover to IRA at financial institution 3. Cash Distribution Subject to 20% tax withholding by IRS 10% Penalty if under age 59 ½ 14

15 Why Save For The Future? 15

16 New Retirement Reality Company Pensions A Dying Breed Social Security Is Uncertain We re Living Longer - Savings Have to Stretch 16

17 Question: In 2013, what was the average annual Social Security payment made to retirees? A. $15,228 B. $19,563 C. $ 23,451 D. $ 26,172 17

18 Question: In 2013, what was the average annual Social Security payment made to retirees? A. $15,228 B. $19,563 C. $ 23,451 D. $ 26,172 18

19 Sources of Retirement Income Today s Retirees: Actual 0% Today s Workers: Projected by SSA 0% 20% 37% 43% 14% 66% 20% 43% 20% 37% Social Security Pension plans Personal savings 20% 14% 66% Social Security Pension plans Personal savings 19

20 Visualize Your Future 20

21 How Awesome Is A 401(k)? Let s Talk Numbers 21

22 How Would You Like To Pay Less In Taxes? Enjoy a TAX BREAK EACH YEAR on Pre -Tax Contributions Your SAVINGS GROW TAX-DEFERRED 22

23 Another Awesome Part: How Your Money Grows In A 401(k) Plan 23

24 Would You Disagree With This Man About Numbers? 24

25 Three Friends Investing For The Future Sue starts investing at age 25 Bob starts investing at age 35 Frank starts investing at age 45 Each invests $25,000 which earns 8% a year 25

26 The Power Of Time $543,113 $251,566 $116,524 Sue Bob Frank 26

27 You Have The Controls 27

28 You Decide: How Much To Contribute To Increase, Decrease, Or Stop Contributions Which Investments You re Comfortable With When To Move Money From One Investment To Another What To Do With Your 401(k) Money If You Leave the Company 28

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30 Question: In a 401(k) plan, is my money invested in the stock market? A. Yes, all my contributions B. No, none of my contributions C. Some of my contributions D. Only if I choose stocks 30

31 Question: In a 401(k) plan, is my money invested in the stock market? A. Yes, all my contributions B. No, none of my contributions C. Some of my contributions D. Only if I choose stocks 31

32 YOU DECIDE Where Your Money Is Invested and YOU CAN MOVE MONEY Among Investments Stocks Bonds Cash 32

33 Participating Is A Piece Of Cake Let s Enroll! 33

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35 First Time Users User Name: Enter Social Security number (no dashes/spaces) Password: Enter Date of Birth - MMDDYYYY 35

36 5 Easy Steps to Get Started Step 1: Personal Information Step 2: Name Your Beneficiaries Step 3: Your Retirement Goals Step 4: How Much To Contribute Step 5: Choose Investments 36

37 Accessing Your Account By phone: hour Voice Response 9 AM 8 PM EST Mon Fri Client Service Representative 37

38 It s Your Responsibility To Create The Paychecks For Your Future Your Verisight 401(k) plan can help 38

39 Thank you