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UMB Employee Benefits Retirement Planning

Customize. UMB Employee Benefits Retirement Planning. How To Achieve Your Retirement Dreams Basics of Planning and Investing Features of your XYZ Profit Sharing Plan. Agenda. Introduction Retirement Goals Retirement Obstacles Key Strategies Investments Plan Features Questions?.

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UMB Employee Benefits Retirement Planning

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  1. Customize UMB Employee Benefits Retirement Planning How To Achieve Your Retirement Dreams Basics of Planning and Investing Features of your XYZ Profit Sharing Plan

  2. Agenda • Introduction • Retirement Goals • Retirement Obstacles • Key Strategies • Investments • Plan Features • Questions?

  3. What Is Your Retirement Dream?

  4. Retirement Plan 1. Win the Lottery 2. Retire!

  5. Does saving for retirement seem like Mission Impossible?

  6. Customize Sources of retirement income • Social Security • Personal savings • IRA or other retirement savings • Your XYZ Profit Sharing Plan

  7. Why you should save for retirement • You could spend 25% of your lifetime in retirement--20 or 30 years or more! • When you retire, you will probably need 70-90% of your existing salary

  8. Fast Food Today - $4 Fast Food in 2031 - $19 New Car Today - $20,000 New Car in 2031 - $94,200 Dinner for 2 Today - $32 Dinner for 2 in 2031 - $151 The potential impact of inflation Examples assume an inflation rate of 5.3%

  9. $52,802 $35,203 Large pizza - $15 per week Morning coffee - $10 per week Little savings add up • Your savings after 20 years* $17,599 Rent a video instead of going to the movies- $5 per week *Assumes you save the cost of each item, plus 27% assumed tax rate every week for 20 years, and earn an annual 8% on your investments

  10. Pat, the Procrastinator Lives the high life Starts saving at age 45 Contributes $4,200 each year for 20 years to the Company Plan ($350 per month) Terry, the Planner Lives more modestly at first Starts saving at age 25 Contributes $2,100 for 40 years to the Company Plan ($175 per month) Time Is Your Greatest Ally

  11. Pat saves twice as much each year and at age 65 ends up with $300,000 for retirement Terry sets aside the same total sum of money but accumulates $1,200,000 for retirement. Assuming an average rate of return of 8%. Time Is Your Greatest Ally

  12. Pat, the Procrastinator,at retirement Terry. The Planner, at retirement Who would you rather be?

  13. Make Your Savings Goals Reachable • Start as early as you can • Save as much as you can • Select investments that have growth potential

  14. Advantages to Saving in a 401(k) • Contributions are made before taxes • Earnings are tax deferred • 401(k) contributions are payroll deductions • Contribution rate may be changed at the beginning of each quarter Plan specific • Your investment portfolio is selected by you

  15. Inflation 90-day US Treasury Bills Bonds Stocks Stocks Outperform other Securities over Time Growth from 1970-2000 $4,383 $6,832 $12,539 $44,912

  16. The Importance of Diversification 91.5% of your return is based on your investment diversification Financial Analysts Journal, B.G.P. Brinson, B.D. Singer & G.L. Beebower, May - June 91

  17. Customize The Plan • 401(k) - eligibility • Enter the first day of the month following the completion of one year of service • Defer up to 15% of compensation • Change deferral rate quarterly • Minimum age - 21

  18. Customize Profit Sharing Plan • Employer discretionary Company Match • Up to 4% of compensation • Last day - 1000 hour requirement

  19. When Can I Get My Money? • Termination of service • Retirement • Disability • Elective deferrals -age 59½ • Hardship withdrawals • Loans

  20. Customize Questions • Consult with your UMB team of experts • Plan questions - call your HR contactat • Tax questions - see financial planner or CPA

  21. Plan YOUR tomorrow

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