401(k) Enrollment Meeting May 2014 The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Warren Averett, LLC • In business since 1972 • Top 30 CPA firms in nation • Employs over 800 individuals • INSIDE Public Accounting consistently rates Warren Averett among the Top 30 CPA firms in the US • Registered Investment Advisor with over $1.6 billion in assets under advisement • Team of investment advisors are highly qualified and have professional designations such as CPA, CFP, CIMA, CRPC, CFA, and AIF • Independent – not tied to any bank, mutual fund company, or insurance product/service The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Why Plan for Retirement? • Need about 80% of your pre-retirement income – Put another way: balance of 8-12 times salary • 20+ years in retirement • Where will this money come from? – Personal Savings – Social Security * – Company Retirement Plan * To get a better idea of your estimated Social Security benefit, go to www.ssa.gov or call 1-800-772-1213. The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Retirement Income Replacement Ratios Source: AON 2008 Retirement Income Replacement Ratio Study The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Benefits of 401(k) plans • Provides retirement income • It’s easy: automatic deductions • Reduces current income taxes • Earnings grow tax deferred • Company contribution The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Per-Paycheck Example Salary of $30,000 401(k) savings After tax savings Paycheck $ 1,250.00 $ 1,250.00 401(k) (5%) (62.50) 0 Taxes (20%) (237.50) (250.00) Net 950.00 1,000.00 Retirement Account 62.50 0.00 Company Contribution 12.50 0.00 Total to 401(k) Account $ 75.00 $ 0.00 The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Retirement Account Balance at Age 65 Beginning Age 25 35 45 Rate of Return $96,000 $72,000 $48,000 8% $644,216 $281,710 $113,800 $96,000 $72,000 $48,000 10% $1,110,070 $412,568 $143,652 $96,000 $72,000 $48,000 12% $1,940,204 $610,402 $182,242 Total amount contributed ($200/month) Account balance at retirement The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Difference 1% Increases Make $300,000 $250,000 Total Steady Deferral Account Value Total Inc. Deferral $200,000 $150,000 At age 65 increasing deferrals by 1% from 5% until you reach 10% equates to $244,254 compared $100,000 to $134,834 if you stay at 5%. $50,000 $0 35 40 45 50 55 60 65 Assuming a $30,000 salary, hypothetical return of 6% and a 5% deferral rate increasing by 1% from years 1-5 until reaching 10% contribution rate. The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Saver’s Tax Credit – It Pays to Save For 2014, if your adjusted gross income is less than $60,000 (filing jointly) or $30,000 (filing single) and you contribute to the 401(k) Plan, you can take a tax credit when you file your taxes next year. This is FREE money the government is giving back to you! Joint Filers' Head of Other Filers' Saver’s Credit Maximum Adjusted Gross Household AGI (as a % of Credit Income (AGI) Filers' AGI Contribution) $0-$36,000 $0-$27,000 $0-$18,000 50% $1,000 $36,601-$39,000 $27,001-$29,250 $18,001-$19,500 20% $400 $39,001-$60,000 $29,251-$45,000 $19,501-$30,000 10% $200 Over $60,000 Over $45,000 Over $30,000 0% $0 The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Investment Options • 5 diversified risk-based model portfolios – Aggressive Growth – Growth – Moderate – Conservative – Ultra-Conservative • 16 individual fund options – Stock, Bonds, Stable Value, Real Estate, TIPS The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Model Allocations * The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Underlying Funds • – Equity funds Legg Mason ClearBridge Small Cap Growth – Vanguard Equity Income – Dodge & Cox International – Vanguard Growth Index – First Eagle Overseas – Vanguard Mid Cap Value Index – Lazard Emerging Markets Multi-Strategy – Vanguard Mid Cap Growth Index – Vulcan Small Cap Value • – Merger Fund * Alternative funds – – Calamos Mkt Neutral * T. Rowe Price Real Estate – – DFA Micro Cap * SteelPath MLPs * – – PIMCO Real Return Robeco Partners Long/Short Research* – – AQR Managed Futures * PIMCO Commodity * • – DoubleLine Total Return * Fixed Income funds – – Federated High Yield Bond PIMCO Total Return – – Loomis Sayles Bond Stable Value – – Pioneer Strategic Income JP Morgan Strategic Income* – Vanguard Total Bond Index * Investments only available through the model portfolios. The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Employee Eligibility Eligible to enter the Plan on January 1 st or July 1 st • following: – 12-months of service – Age 21 or older Eligible for company contributions January 1 st or July 1 st • following: – 12-months of service – Age 21 or older The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Employee Contributions • Types of Contributions: – Pre-tax 401k contributions – After-tax Roth contributions • Can defer up to $17,500 of compensation for 2014 – Additional catch-up contribution of $5,500 if age 50 or older The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Company Contributions • Company contribution: – Company will contribute amount equal to 100% of the first 1% of the money you contribute to the plan – Discretionary Profit Sharing contribution: – Subject to years of service vesting schedule 2 years – 25% • 3 years – 50% • 4 years – 75% • 5 years – 100% • The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
Leaving Company or Retirement • Do nothing – Minimum account balance of $1,000 – Must start taking Required Minimum Distributions (RMDs) the year you turn 70 ½ • Rollover to another 401(k) plan or IRA – No taxes or penalties • Take a lump-sum cash distribution – Mandatory 20% withholding for Federal Income Tax – Subject to a 10% early withdrawal penalty if under age 59 ½ The information contained in this document is privileged and confidential and is protected from disclosure. Dissemination, distribution or copy of this communication without the express permission of Warren Averett is strictly prohibited.
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