Diocese of Davenport Employee Retirement Savings Plan

1. Diocese of Davenport Employee Retirement Savings Plan

2. Today’s Agenda • Why is it important to save for retirement? • How does the Diocese of Davenport Employee Retirement Savings Plan work? • What kind of investments are available inside the Plan? • How do you access your retirement account at TIAA-CREF?

3. Is Social Security enough? • Social Security was never designed to be the sole funding source of a worker’s retirement. • Introduced in 1935 when average life expectancy was 61.7 years old. • Didn’t start paying benefits until age 65-people were not expected to live long enough to receive benefits! • Social Security accounts for only 36.5% of a retirees income

4. Good news-we are living longer! • A 63% chance that at least one member of a couple, aged 65 today, will live to celebrate his or her 90th birthday. • A 36% chance that one member of that couple will live to be 95. • To successfully fund your retirement, you will need to save enough to support yourself for at least 20 years-are you on track to retire successfully?

5. Don’t forget about inflation • Just eating in retirement can cost two people over $200,000! • $5 a meal, 3 meals a day, over 20 years. • Add a modest 3% inflation rate, and the cost is nearly $300,000!

6. Why should you save for retirement?

7. No one else is going to do it for you!

8. Benefits of saving in the Diocese of Davenport Employee Retirement Savings Plan • Contributions to the plan are tax deferred-lower your income tax bill. • Money in your account grows tax deferred-don’t pay taxes on it until you withdraw the money at retirement. • It’s easy! Contributions are withheld from your paycheck and submitted to the plan on your behalf. • You decide how to invest the money-broad range of investments available from TIAA-CREF.

9. Enjoy the benefits of tax-deferred savings

10. You may also benefit from tax-deferred growth

11. How much should you save?

12. Diocese of Davenport Employee Retirement Savings Plan Provisions • Immediately eligible to make 401(k) contributions starting the January 1st or July 1st following your hire date. • Example-Employee hired March 1, 2013 enters the plan July 1, 2013. • Can contribute up to $17,500 of your pay to the plan on a pre-tax basis. • Employees age 50 + can contribute an extra $5,500, for a total of $23,000 • You can change the amount of your contribution anytime by contacting your payroll processor.

13. Diocese of Davenport Employee Retirement Savings Plan Provisions • Eligibility for employer matching contributions: • Age 21 • One Year of Service • 1,000 hours of service in 12 months for hourly workers • Salaried workers credited with 45 hours of service for each week worked • Diocese will match 100% of the first 2% you contribute to the plan • 2% contribution=2% employer match • 1% contribution=1% employer match • No contribution=no employer match • Some locations may make additional discretionary contribution-see your payroll processor for more information.

14. Diocese of Davenport Employee Retirement Savings Plan Provisions • Retirement accounts with previous employers can be rolled into this plan. Some benefits of consolidating your retirement accounts include: • Everything is in one place-easier to get a clearer picture of your retirement outlook. • Fewer statements to keep track of and fewer websites to access to manage accounts. • Potential cost savings of having all investments together.

15. Diocese of Davenport Employee Retirement Savings Plan Provisions • Withdrawal Options • Termination of employment • Retirement • Death • Disability • Financial Hardship-IRS Definition • Purchase of a principal residence, or to prevent foreclosure from principal residence. • Medical expenses for self, spouse, or dependents. • College tuition for self, spouse, or dependents. • Burial or funeral expenses for parent, spouse, or dependent. • Repair of damage to principal residence that qualifies for a casualty deduction.

16. Diocese of Davenport Employee Retirement Savings Plan Provisions • Hardship Distribution (Continued) • TAXABLE! • If under age 59 ½, additional 10% penalty for early withdrawal • Cannot make contributions to the plan for 6 months • The best thing to do with your retirement account is to leave it alone!

17. Investing-The “Basics” • Stocks (Equities) • Bonds (Fixed Income) • Money Market/Stable Value

18. What do you get when you buy a stock? • Ownership in a company • Typically more volatile than bonds • Since 1926, the average large cap stock has returned 10%

19. What do you get when you buy a bond? • You get an I.O.U • You are essentially loaning money to a government or a corporation • Bond issuer agrees to pay a specified rate of interest during the life of the bond and then to repay the face value of the bond when it becomes due. • Bonds are typically less risky and less volatile than stocks. • Long-term US Treasury bonds have historically returned 5%.

20. What to do to avoid any and all risk?

21. What is your risk tolerance? • To determine your risk tolerance, you need to answer a number of questions: • How old are you? • How long do you have to save and when do you need the money? • How much money do you need to fund a successful retirement? • How much have you already saved?

22. Diversification

23. Diocese of Davenport Employee Retirement Savings Plan Investment Options (Performance and Expenses as of 3/31/2013)

24. Diocese of Davenport Employee Retirement Savings Plan Stock (Equity) Options

25. CREF Equity Index Account • Diversified portfolio selected to track the overall market for all publicly traded stocks in the US. • All US stocks-less than 1% international exposure.

26. CREF Stock Account • Diversified portfolio of stocks, with both domestic and international exposure. • 67% in US companies and 32% in international companies.

27. CREF Growth Account • Invests primarily in large, well-known US companies that present exceptional growth opportunity-think Apple, Google, Microsoft, etc. • 93% in US companies and 5% in international companies.

28. CREF Global Equities Account • This is a GLOBAL fund-invests in companies of all sizes, both inside and outside of the US • 52% in US companies and 46% in international companies.

29. CREF Social Choice Account • 60% stocks/40% bonds • 70% US/30% International • Only invests in companies who meet the fund manager’s socially responsible criteria.

30. TIAA Real Estate Account • Seeks favorable long-term returns through rental property and appreciation of real estate. • Currently holds 80% in real estate and 20% in short-term instruments.

31. Diocese of Davenport Employee Retirement Savings Plan Bond (Fixed Income) Options

32. CREF Inflation-Linked Bond Account • Seeks long-term rate of return that outpaces inflation. • 99% of this fund is invested in US Treasury inflation-indexed bonds.

33. CREF Bond Market Account • Mix of US Government and agency securities, corporate bonds and mortgage-backed bonds. • Can have international exposure as well, and up to 20% in lower-quality bonds.

34. CREF Short-Term Bond Account • 80% of assets in short-term bonds, which means less volatility than longer-term bonds. • Remember risk VS reward!

35. CREF Money Market • Cash-equivalent • Non-existent rate of return

36. TIAA Traditional Annuity • “Guaranteed” Investment, paying 3% return • Withdrawal restrictions on this investment • Cannot take a lump sum withdrawal • Withdrawal paid out over ten-year period

37. TIAA Access Account-Lifecycle Funds

38. TIAA Access Account-Lifecycle Funds (Continued)

39. TIAA Access Lifecycle Funds

40. TIAA Access Lifecycle Funds

41. Accessing your account with TIAA-CREF • Contact TIAA-CREF by calling (800) 842-2776 • Access your account online at www.tiaa-cref.org