2. Strategic
PARTNERS
Your employer has chosen a team of strategic business partners that
work together to provide the services your plan needs. This team
approach gives you all the resources you need to meet your
retirement goals.
RANDALL & HURLEY | TPA
• Compliance testing
• Annual reconciliation
• Plan design & consulting
• Provides reports & forms
• Provides website access
SAMPLE | CUSTODIAN
• Holds plan assets
SAMPLE CO | SPONSOR
• Ultimate service provider & fund
selection
• Transmits information
SAMPLE | INVESTMENT BROKER
• Advises fund selection
• Monitors fund and plan
performance
4. Retirement
Plans
46%
Social Security
36%
Savings &
Investments
16%
Other
2%
Retirement
Income sources
Your retirement plan is a vital source of
retirement income and provides several
advantages to traditional savings
accounts, including:
• Personal income tax savings
• Choice and flexibility in planning for
your future
• Convenience of automatic
reductions from pay
• Potential for employer contributions
to further bolster your savings
Source: Fast Facts and Figures About Social Security, 2009,
Social Security Administration
Today’s retirees rely on several income sources. Your retirement
plan is a critical component of your retirement income because you
are able to control how much is available to you at retirement. By
planning ahead, you can achieve your goals.
Retirement
Planning
6. Experts agree that the best way to save for retirement is to start
saving now.
Traditional deferrals are made on a pre-tax basis (but are taxed
later) while Roth deferrals are made on an after-tax basis (but
aren’t taxed later).
WHY SAVE?
Use the table to see how it works. You can choose
to save taxes now or at retirement based on how
you choose to defer.
Pre-Tax
Deferral
Equal
Contribution
Roth Deferral
Equal Pay Roth
Deferral
Gross Annual Pay $30,000 $30,000 $30,000
401(k) Contribution ($200/mo.) 2,400 2,400 2,040
Taxable Income 27,600 30,000 30,000
Federal Income Taxes (15%) 4,140 4,500 4,500
FICA (7.65%) 2,295 2,295 2,295
Net Take-Home Pay $21,165 $20,805 $21,165
7. After one year of making retirement contributions, your total
assets will likely grow due to investment returns and added tax
savings.
ASSETS AFTER
ONE YEAR
$28,964
Take Home Pay
Taxes
+$26,650
-$5,850
Take Home Pay
Taxes
Tax Savings
Retirement
Interest
Employer Contribs
+$23,985
-$5,265
+$585
+$3,250
+$169
$975
NoplanInvestment 10%invested inPlan
$26,650
8. The earlier you start saving, the easier it will be to
meet your goals. Starting to save now—even if it’s
just a little bit—can make a big difference at
retirement.
HOW LONG WILL IT TAKE
TO SAVE $100,000?
Number
of
Years
Monthly
Savings
Required
10 $578
20 $192
30 $82
40 $38
Starting to save now makes it easier to
achieve your retirement goals. When you
start saving early, your required savings
amount is much smaller.
Illustrations assumes a 7% annual return.
9. The earnings you accrue as your account grows makes a
dramatic impact on your retirement savings. Many call this
phenomenon the miracle of compound interest. No matter
what you call it, it’s clear that the sooner you begin to save, the
more you can rely on investment earnings—and not just
contributions—to help you meet your retirement goals!
THE MIRACLE OF
COMPOUND INTEREST
0
20
40
60
80
100
120
140
160
180
200
0 10 20 30 40
TotalAccountValue($1,000)
Years
Contribs Earnings
Illustration assumes a 7% annual return.
10. Making small changes to your spending habits makes it easier
than you might think to meet your retirement goals.A LITTLE GOES
A LONG WAY
Average
Spent
Tax
Savings
Retirement
Savings 10 Years 20 Years 30 Years
Coffee Break $4/day $58 $2,010 $27,660 $82,071 $189,107
Use a loyalty card Save $146 $2,018 $5,987 $13,795
Limit to twice/week Save $1,040 $14,370 $42,637 $98,243
Eating Lunch Out $148/mo $68 $2,368 $24,538 $72,808 $167,762
Brown bag it 3 times/week Save $1,154 $15,945 $47,310 $109,012
Dining Out $58/wk $232 $8,043 $111,126 $329,727 $759,748
Skip one happy hour/month Save $696 $9,616 $28,533 $65,745
Entertainment $225/mo $78 $2,700 37,304 $110,688 $255,044
Watch movies at home Save $300 $4,145 $12,299 $28,338
Digital Downloads $10/mo $3 $120 $1,658 $4,919 $11,335
INVEST IT INSTEAD WATCH YOUR ACCOUNT GROW
Illustrations assume contributions are made on a pre-tax bi-weekly payroll schedule, the 25% income tax bracket, and interest of 7%, compounded annually. Data Source:
www.bls.gov, accountingprincials.com
11. YOUR RETIREMENT NEEDS
Experts recommend you will need 70% - 90% of
your annual income to maintain the quality of life
you enjoy now.
Annual Income at Retirement
Replacement Percent
Annual Retirement Need
No. of Years in Retirement
Total Retirement Savings Need
$50,000
80%
$40,000
20
$800,000
12. Allocate your investments across multiple asset classes to achieve
the right balance of growth and security for your risk tolerance.
The following tips will keep you on course:
SELECTING INVESTMENTS
Focus on THE long-term goal
UNDERSTAND risk & return
Diversify YOUR PORTFOLIO
13. FOCUS ON
LONG TERM GOALS
How much time you have to save for retirement should
impact how you investment your retirement plan
account.
Years Until Retirement
<15
Long Term Investor
You can afford to take
some risks in hopes of
a bigger payoff.
>5
SHORT Term Investor
Your goal is to
preserve capital. Your
portfolio should be
more risk-averse.
5 - 15
MID Term Investor
You have enough time
to take on some risk in
search of higher-than-
average returns.
Less Risk More Risk
5 10 15 20 25
AVERAGERATE OF Return
INVESTORPROFILE
Conservative Moderate Balanced Growth Aggressive
14. UNDERSTAND
RISK & RETURN
How much time you have to save for retirement should
impact how you investment your retirement plan
account.
RISK/RETURNRELATIONSHIP Risk/RETURNBYASSET CLASS
Risk
Return
Short Term
Investments
Bonds
Large
Cap
Mid
Cap
Int’l.
Small
Cap
15. 3.58%
Annual Range
of Return (%)
Average
Return 6.04% 7.90% 8.81% 9.42% 9.85%
-0.04
15.20 11.13
0.06
-17.67
31.06
17.24
-0.37
-40.64
76.57
23.14
-6.18
-52.92
109.55
27.27
-10.43
-60.78
136.07
31.91
-13.78
-67.56
162.89
36.12
-17.36
5%
25%
49%
21%
Data Source: Ibbotson Associates, 2011 (1926-2011). Past performance is no guarantee of future results. Returns include the reinvestment of dividends and
other earnings. This chart is for illustrative purposes only and does not represent actual or implied performance of any investment option.
RISK & RETURN
BY PORTFOLIO
This chart illustrates how asset allocation can be created
with different risk and return characteristics to meet your
goals. You should choose your investments based on
your particular objectives and situation.
Int’l. Stocks
Bonds
Short-Term/Cash
Domestic Stocks
15%
60%
25%
70%
30%
10%
40%35%
15%
30%
50%
14%
6%
Short-Term Conservative Balanced Growth
Aggressive
Growth
Most
Aggressive
16. DIVERSIFY YOUR
PORTFOLIO
By allocating your account across multiple asset classes,
you balance your risk for a variety of market conditions.
Diversification does not ensure a profit or protect against a loss in a declining market.
17. ASSET CLASS
DIVERSIFICATION
Certain asset classes do better in different market
conditions. For example, stocks tend to rise when bond
rates fall.
Past performance is no guarantee of future results.
18. SAMPLE ASSET
ALLOCATIONS
The diagram below illustrates how asset allocations change
based on your risk tolerance and time horizon.
10%
40%
50%
20%
40%
40%
30%
40%
30%
20%
50%
30%
40%
40%
20%
50%
40%
10%
70%
20%
10%
80%
20%
90%
10%
Long Term Investor
15+ Years
Short Term Investor
0 - 15 Years
Mid Term Investor
5 – 15 Years
Conservative Moderate Aggressive
Stocks Bonds Short-Term/Cash
19. o Contact Information
Is your street address and email current?
o Contribution Level
Can you save a little more?
o Beneficiary Designations
Marriage, divorce and children may
necessitate a change.
o Investment Elections
Is your current investment strategy a good
fit for your long-term goals?
o Rebalance Options
Should you rebalance your account to align
with your investment strategy?
PERIODIC REVIEW
At least once each year, you should complete a plan
review to verify:
20. ANYTIME ACCOUNT ACCESS
1-888-454-0334
VRU System
(888) 454-0334
Basic Account Inquiry
Online & Mobile Website
www.randall-hurley.com
Comprehensive Account Management
22. YOUR PLAN HIGHLIGHTS
General Plan Information
Plan Type: 401(k) Plan
Trustees: John Smith
Effective Date: January 1, 2012 (for employer contributions)
Normal Retirement Age: Age 62 (with 5 years of participation)
Vesting Percent:
• Account balance from elective deferrals is 100% vested;
• Account balance from employer 3% Safe Harbor Nonelective
contributions is 100% vested;
• Account balance from Employer Profit Sharing and Matching
contributions is subject to a 6 year graded vesting schedule
(0-1 years = 0%, 2 years = 20%, 3 years = 40%, 4 years = 60%, 5 years =
80%, 6+ years = 100%). Years of service start effective 1/1/2012.
Investments:
Plan assets will be invested in accounts held at Thrivent. Participants will
be able to direct 100% of their account balance and will have access to
their account through Thrivent’s website.
Timing of Statements:
Thrivent will issue monthly/quarterly participant statements. Plan assets
are daily valued.
23. YOUR PLAN HIGHLIGHTS
Plan Eligibility & Entry
Eligibility Requirements: Attainment of age 21 and one year of service (working over 1000 hours).
Entry Date: January 1 or July 1 following completion of eligibility requirements.
Contribution Types
Employee Pre-Tax or Roth
Salary Deferrals:
Participants are allowed to elect pre-tax or Roth salary deferral
contributions up to 100% of compensation not to exceed $17,000 (2012).
Participants who are age 50 by December 31 may contribute an additional
$5,500 “catch-up” contribution. These limits are adjusted each plan year.
Employer 3% Safe Harbor
Nonelective Contribution:
The employer will make a Safe Harbor contribution to each eligible
participant’s account equal to 3% of compensation.
Employer Discretionary
Profit Sharing
Contribution:
The employer may make a discretionary profit sharing contribution that
will be a designated percentage of each participant’s compensation.
Employer Discretionary
Matching Contribution:
The employer may make a discretionary matching contribution.
24. YOUR PLAN HIGHLIGHTS
Distributions from the Plan
In-Service Withdrawals: None permitted.
Distributions:
Processed as soon as administratively feasible following termination of
employment.
Forms of Payment:
One-time Lump-sum of account balance that can be received as taxable
income or rolled over (to an IRA or another qualified plan).
25. CUSTOMER SERVICE
Monday – Friday
8 am – 5 pm PST
(888) 682-4406
info@randall-hurley.com
Messages will be routed
Monday – Friday, 8 am – 5 pm PST
www.randall-hurley.com
For general questions, from the home
page, click For Individuals/Resources.