[IMPORTANT INFORMATION BEFORE YOU BEGIN: Please note: This presentation is designed to be easy to use with no customization required by you. Therefore, it should be presented AS IS without modification. The information contained in this presentation has been compiled from sources believed to be reliable, but the accuracy of the information is not guaranteed. The content and accuracy of such information is the responsibility of the source and not of Vanguard. The presentation is provided solely for general educational and informational purposes. It is not intended and should not be construed as legal, tax, accounting or investment advice. Not all products, features, and services covered in the presentation are available to all plans. Any use of the presentation, in whole or in part, is done so at the user s sole risk. Before giving this presentation, carefully review the contents of each slide as well as the speaker s notes. The speaker s notes can help you prepare for the animation built into this presentation. This presentation is designed to be completed within 20 minutes.] We re here to talk about your future. Saving for retirement is about giving yourself choices. You re putting yourself in the best 1
position to determine when you will stop working, how you will spend your time, and how comfortable you will be. The good news is that your employer has chosen a retirement plan that can help you prepare. 1
To help you understand your options, we are going to keep it simple and focus on these four questions: Why save now? Why use your plan? How much is enough? What type of investor are you? [click to go to the next slide] 2
Raise your hand if you want to retire someday Great. If your hand is in the air, there are some things to consider. Retirement won t just happen at least not the retirement you may be envisioning. You have to take steps to prepare for a long, enjoyable retirement. Retirement is expensive. Saving for retirement is a personal responsibility, and your retirement plan will likely be your largest source of income. Social Security will only cover a small portion of what you ll need the rest is up to you. [click to go to the next slide] 3
And living expenses are on the rise. The key is knowing how much you need and what it takes to achieve that goal. [click to go to next slide] 4
Time makes all the difference No matter what point you are at in your life, now is always better than later to start saving. Consider the case of Sam and Sally Sam starts saving early and keeps saving for the long term. Sally starts saving later, but saves double what Sam saves per year. Who do you think comes out ahead in the end? [click] The results: Sam saves the most by more than $300,000. Although Sally doubles her contributions for more than half the time that Sam contributed, she is still behind. She would have to save even more to catch up. The message is clear: there is a cost to delaying saving. Put time on your side and let your money work for you. [click to go to next slide] [For reference: Retirement Income Criteria: The illustrations above assume a retirement age of 65 and that the individual receives the 5
monthly retirement payment shown until age 90. The amount saved until retirement assumes an annual investment return of 7%. The monthly payment amount in retirement assumes an annual investment return of 5%. The investment performance shown does not represent the return of any particular investment and does not guarantee any future rate of return. The final account balance does not reflect any taxes or penalties that may be due upon distribution. Withdrawals from a tax deferred account before age 59½ are subject to a 10% federal penalty tax unless an exception applies.] 5
The good news: Your retirement plan provides a great way to save with many advantages. Convenience Automatic payroll deductions make saving second nature. Ownership The money you contribute and any earnings belong to you. Take it with you throughout your career and every phase of life to use in retirement. Tax advantages Your money is invested before taxes and grows tax deferred until it s withdrawn. This reduces your taxable income each year and allows your savings to grow faster over time. [click to go to the next slide] 6
Raise your hand if you know exactly the right amount to save If you don t have your hand raised, don t worry you re not alone. [click] Many people make the mistake of underestimating how much they need to save. Saving enough can help you maintain the lifestyle you desire. Most experts recommend saving anywhere from 12 to 15 percent of your income. If you aren t quite at that point, contribute as much as possible and plan to increase the amount each year. [If applicable, suggest that, at the very minimum, they should consider contributing enough to reach the company match.] If you need additional assistance, use Vanguard s savings calculator and tools to help you determine how much you can save. [click to go to the next slide] 7
Getting there is possible: Prioritize retirement. Make saving a habit. And seek out ways to boost your savings. [click to go to the next slide] 8
Raise your hand if you think you are great at picking investments? How about if you have the time to research and understand the best investment options for you? For those without your hands raised No problem. [click] You are likely a guided investor. This means you: have little time or desire to research investment options on your own, and/or are looking for a solution to take the complexity out of investment decision making. For those who had their hand raised Great. [click] You are likely an engaged investor. This means you: want to stay actively involved in the investment selection process, and/or have the time and desire to make investment decisions on your own. You should feel comfortable making investment selections. Knowing what type of investor you are will help you find a suitable approach to keep your savings strategy on target. 9
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For guided investors, there s more good news your employer has helped make the decision easy. Your plan offers options that provide a straightforward way to begin saving meaningfully. [You can identify the plan s default investment.] Once you ve enrolled, you can also build a personalized investment strategy using Morningstar Retirement Manager SM, a web based resource. When you provide basic information about your situation and goals, the experts at Morningstar Associates, LLC, can generate a personalized investment strategy. [discuss the options for plan, including whether plan offers Morningstar s fee based managed account solution.] [click to go the next slide] 10
For those savvy and confident engaged investors, your plan offers resources to help you make your own investment decisions. [click] Use the online tools to help you plan. [click to go to next slide] 11
So, hopefully by now you ve made the decision that you want to save for your future What s next? Enroll in the plan. Getting started is easy. [Direct them to the web, phone or form as appropriate.] Remember, while enrolling is an essential part of saving it doesn t stop there. There are other key steps to helping you become retirement ready. Track your progress. Stay connected and track your progress [If applicable, this is a good opportunity to let them know they can access their account from their smartphone.] Stay informed. Update your strategy. This is particularly important if you experience a major life event. Register online today to access a wide range of planning resources designed to help you succeed. 12
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As a parting thought: put your retirement plan into action today and you can thank yourself tomorrow. [Reference the ability to get more information, including plan highlights, in the enrollment guide or online.] [This is a good slide to leave up during your closing comments.] 13