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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
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
Agenda
  • Introduction
  • Retirement Goals
  • Retirement Obstacles
  • Key Strategies
  • Investments
  • Plan Features
  • Questions?
retirement plan

Retirement Plan

1. Win the Lottery

2. Retire!

sources of retirement income
CustomizeSources of retirement income
  • Social Security
  • Personal savings
  • IRA or other retirement savings
  • Your XYZ Profit Sharing Plan
why you should save for retirement
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
the potential impact of inflation
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%

little savings add up
$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

time is your greatest ally
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
time is your greatest ally1
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
make your savings goals reachable
Make Your Savings Goals Reachable
  • Start as early as you can
  • Save as much as you can
  • Select investments that have growth potential
advantages to saving in a 401 k
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
stocks outperform other securities over time
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

the importance of diversification
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

the plan
CustomizeThe 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
profit sharing plan
Customize Profit Sharing Plan
  • Employer discretionary

Company Match

  • Up to 4% of compensation
  • Last day - 1000 hour requirement
when can i get my money
When Can I Get My Money?
  • Termination of service
  • Retirement
  • Disability
  • Elective deferrals -age 59½
  • Hardship withdrawals
  • Loans
questions
CustomizeQuestions
  • Consult with your UMB team of experts
  • Plan questions - call your HR contactat
  • Tax questions - see financial planner or CPA
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