Chart your retirement course. It s easier than you think. Page 1
What can you control? Page 2
Today s discussion. 1. Your goals and vision 2. 4. 3. Set contribution Establish an investment strategy Roth or traditional 5. Keep it on track Page 3
Your vision translates to a goal. Consider that replacing 80% of your pre-retirement income equals about your ending take-home pay. Page 4
The biggest factors. At what age will you retire? How much debt will you have when you retire? What is your vision of your retirement lifestyle? Page 5
Coordinate your plans. Have the conversation now. Find areas where you agree. Pinpoint areas of disagreement. Page 6
How much is enough? Maximum amount is $18,000 per year plus $6,000 catch-up Absolute minimum is the employer match Calculate a targeted amount Page 7
The power of RetireOnTarget. View a snapshot of your savings Run scenarios See what you can do now to meet your goals Page 8
Focus on saving enough. Always set your contribution as a percentage Over-fund it now if you re able If you can t get there right away, plan to get there over time Take a holistic approach Page 9
Setting your investment strategy. Diversification Asset allocation Rebalance your investments Help me do it versus do it myself Think long term Page 10
Diversification. Money Market/Stable Value Funds Intl./Emerging Markets Stocks Large Cap. Stocks Your Retirement Funds Short-term Government Bonds Medium Cap. Stocks Long-term Government Bonds Page 11
Asset allocation. Stocks Cash/stable value Bonds Other Asset Classes Page 12
Asset allocation Bonds Aggressive Moderate Conservative More risk/higher potential return Steady/moderate growth Less risk/lower potential return Stocks Bonds Cash Page 13
Returns over the long run. Average Annual Real Return (1928-2015) S&P 500 11.41% 10-Year Treasuries 5.23% 3-month Treasuries 3.49% More risk/higher return Less risk/lower return New York University (2016) Page 14
Rebalance your investments. Bonds Original mix It became this Reset to original mix Stocks Bonds Cash Page 15
Avoid the emotional roller coaster. Euphoria: Don t buy here! Exhilaration Point of greatest risk Apprehension Exhilaration Apprehension Optimism Fear Optimism Fear Panic Point of greatest opportunity Excitement Despair: Don t sell here! For illustrative purposes only. This is neither a graph of actual performance nor a guarantee of future price appreciation. Page 16
What if it was easy? Make one fund decision You get professional diversification Auto-adjusts to be more conservative over time Page 17
Target-date investment example. Years to Retirement 30 + 20 <10 Bond 5% Cash 5% Bond 10% Cash 5% Bonds 40% Cash 10% Target Date Date 2055 2050 Target Date 2045 Target Date 2025 Stock 90% Stock 85% Stocks 50% The portfolios above are samples only and not intended to represent an actual security or investment account. Page 18
Traditional vs Roth contributions. Traditional Roth Pre-tax contributions Immediate tax savings Tax-deferred earnings Taxable withdrawals After-tax contributions Deferred tax savings Tax-free earnings Tax-free withdrawals* *if withdrawal qualifies Page 19
The bottom line. Upon retirement, you can access your Roth money tax-free. Some conditions apply. Page 20
A big deal for an early saver. $25,000 investment Earnings grow tax-free* Over $289,000 of tax free earnings at retirement Age 25 45 65 85 *for qualifying withdrawals A seven percent growth rate was assumed for this illustration. This graph does not reflect any fees or charges. If fees and charges had been used the performance shown would have been lower. The hypothetical investments are not indicative of the future performance of any investment and do not represent the performance of any specific fund. Page 21
When to consider Roth 401(k). You re early in your career You don t need a current tax deduction Your income and tax rate will likely be higher when you withdraw the money Page 22
When to stay with traditional contributions. You need to lower your taxable income now You expect to be in a lower tax bracket when you retire Page 23
A combination might be right. You re not sure whether taxes will be higher or lower in retirement You still need some current income tax savings You want to diversify your tax strategy Page 24
Keep your retirement on track. Keep increasing your contribution and don t cash out Avoid loans and hardship withdrawals Avoid market timing keep to your strategy Stay engaged Page 25
Personalized support resources. Make the most of RetireOnTarget and resources on BenefitsForYou. Call the Investor Guidance Center, 800.999.8786, Mon. Fri., 7 a.m. 5 p.m. CT. Nearing retirement? Plan your transition with RetiredOnTarget (also on BenefitsForYou). Page 26
CUNA Mutual Retirement Solutions is a division of CUNA Mutual Group and the marketing name for CPI Qualified Plan Consultants, Inc., a CUNA Mutual Group member company. CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Annuity insurance products are issued by CMFG Life Insurance Company, located in Madison, Wisconsin. Each insurer is solely responsible for the financial obligations under the policies and contracts it issues. Securities distributed by CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 866.512.6109. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value, and are not obligations of or guaranteed by the financial institution. Representatives offer retirement and investment education but do not provide investment, legal or tax advice. Participants are encouraged to consult their own advisors. CMRS-1404589.1-0116-0218 CUNA Mutual Retirement Solutions, 2016 All rights reserved Page 27