enrollment retirement funds date presenter name. 2 welcome informationprocessyour role...

EnrollmentRetirement Funds

Date

Presenter Name

2

TodayIntroduction

YOUR ROLEPROCESSINFORMATIONWELCOME

Welcome

Sit Back – Relax – Ask Questions – Get Info – ACT!

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This presentation has been prepared by T. Rowe Price Investment

Services, Inc., for informational purposes only. T. Rowe Price

Investment Services, Inc., its affiliates, and its associates do not provide

legal or tax advice. Any tax-related discussion contained in this presentation,

including any attachments, is not intended or written to be used, and cannot

be used, for the purpose of (i) avoiding any tax penalties or (ii) promoting,

marketing, or recommending to any other party any transaction or matter

addressed herein. Please consult your independent legal counsel

and/or professional tax advisor regarding any legal or tax issues

raised in this presentation.

4

TodayIntroduction


Allow me to introduce myself

• I’m _________________________________

• I work for ____________________________

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TodayIntroduction


Allow me to introduce myself

• I’m _________________________________

• I work for ____________________________

• Retirement specialist

• Series 7 and 63 registered representative

• Series 66 investment advisor representative

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TodayIntroduction


What we’ll cover today

• Info– Why save and the benefits of your plan

• Process– How to make the plan work for you

• Your role– What you need to do

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BenefitsWhy Save


Social insecurity?

Source: Social Security Administration, 2006 OASDI Trustee Report.

2005: 3.3 workers per Social Security recipient



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BenefitsWhy Save


Social insecurity?

• Full Social Security benefits age is on the rise– Born 1937 or earlier: age 65

Born 1938-1942: age 65 + set number of monthsBorn 1943-1954: age 66Born 1955-1959: age 66 + set number of monthsBorn 1960 or later: age 67

• Receiving Social Security at age 62 reduces benefits– Born 1937 or earlier: 80% of full benefits

Born 1938-1942: between 75% and 80% of full benefits Born 1943-1954: 75% of full benefitsBorn 1955-1959: between 70% and 75% of full benefitsBorn 1960 or later: 70% of full benefits

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Pop Quiz

What was the average life expectancy for U.S. citizens in 1930?

A. Age 87 for men and age 91 for women

B. Age 67 for men and age 70 for women

C. Age 58 for men and age 62 for women

D. Age 52 for men and age 55 for women

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Pop Quiz

What was the average life expectancy for U.S. citizens in 1930?

C. Age 58 for men and age 62 for women

(Eligibility for Social Security benefits began at age 65!)

Source: Life Expectancy for Social Security (www.socialsecurity.com).

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BenefitsWhy Save


What’s in it for you?

• Power of compounding

Take note…!

Investing as little as $1 a day can really add up over time.

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BenefitsWhy Save


The power of compounding

See how just $1 a day can add up

10years

20years

30years

$5,265

$37,107

$15,845

7% annual rate of return, compounded monthly. This is for illustrative purposes only and not meant to represent the return of any of your plan’s investment options. Your situation will vary.

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BenefitsWhy Save


The power of compounding

See how just $20 a week can add up

7% annual rate of return, compounded monthly. This is for illustrative purposes only and not meant to represent the return of any of your plan’s investment options. Your situation will vary.

10years

20years

30years

$15,001

$105,731

$45,147

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BenefitsWhy Save




• Free money Take note…!

Your employer will match your contributions.

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BenefitsWhy Save


Your employer match

[Add customized text for dollar for cents employer match here.]

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BenefitsWhy Save


Your employer match

[Add customized text for dollar for dollar employer match here.]

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BenefitsWhy Save


Vesting schedule

• Your entitlement to the employer’s contribution portion of your account– 20% after 1 year

– 40% after 2 years




• You are always 100% vested in the salary deferral portion of your account

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Now add the match (25%)

10years

20years

30years

Assumes a $20 weekly contribution, 25% match, and a 7% annual return compounded monthly. This is for illustrative purposes only and not meant to represent the return of any of your plan’s investment options. Your situation will vary.

$132,164

$56,434

$18,751

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$22,501

$67,720

$158,596



10years

20years

30years

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10years

20years

30years

$30,001

$90,294

$211,462

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BenefitsWhy Save




• Free money

• Multiple tax advantages

Take note…!

When you make before-tax contributions to the plan, you can lower your current taxable income and you won’t pay taxes until you take a distribution from the plan.

[USE THIS SLIDE IF NO ROTH AND DELETE SLIDES 25 THROUGH 27]

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Lower current taxable income

* An investment in a savings account at a bank may be FDIC insured; an investment through the plan is not. **This example assumes a 15% tax rate. This is a hypothetical example for illustrative purposes only; your situation will vary.

Ed’s 6% Regular Savings*

Jane’s 6% Plan Savings

$25,000 Annual base wage $25,000

0 Before-tax contributions -1,500

25,000 Pay subject to income tax 23,500

-3,750 Tax** -3,525

-1,913 Social Security -1,913

-1,500 Regular savings 0

$17,837 Spendable income $18,062

Jane’s taxable income is lower, and she will have $225 more in spendable income than Ed.


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No taxes along the way

Pat:$250/month401(k) plan

$304,993

$236,630

Year 1 Year 30

This example assumes that both invest over a 30-year period, at an 18.75% tax rate, and earn a 7% annual return, compounded monthly. Taxes are taken from the 401(k) account upon withdrawal. This is a hypothetical example for illustrative purposes only and is not meant to represent the investment return of any of your plan’s options. Your situation will vary.

Chris: $250/month taxable account outside the plan


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BenefitsWhy Save




• Free money


Take note…!

The plan offers before-tax and Roth contributions. Compare the tax advantages of both.

[USE THIS SLIDE IF ROTH IS OFFERED AND DELETE SLIDES 22 THROUGH 24]

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Compare the different tax advantages of contributing

Your plan offers you two great ways to save for retirement. Now you can choose the tax advantage you prefer by making Roth contributions, before-tax contributions, or both as

long as your combined savings do not exceed plan or IRS limits.

Before-Tax Contributions Roth Contributions

Are made before taxes are taken out of your pay Are made after taxes are taken out of your pay

Give you a tax break by helping you lower your current taxable income

Don’t give you a tax break today—contributions are made with money you’ve already paid taxes on

Allow more of your income to stay in your paycheck (compared to Roth contributions)

Will cause you to see less take-home pay (compared to before-tax contributions)

Accumulate tax-deferred—once you begin making withdrawals, you will pay taxes on your contributions and associated earnings

Accumulate tax-free—the balance of your contributions and any associated earnings are tax-free when you take a qualified distribution*

* A qualified distribution is tax-free if taken at least five years after the year of your first Roth contribution AND you’ve reached age 59½, become totally disabled, or died. If your distribution is not qualified, any withdrawal from your account will be partially taxed. These rules apply to Roth distributions only from employer-sponsored retirement plans. Additional plan distribution rules apply.


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How using before-tax or Roth contributions could affect your annual pay and income in retirement

These charts assume a participant is age 45, earns $50,000 a year, gets a 3% raise each year, contributes 10% of pay annually to his or her retirement plan, has an annual rate of return of 7% before retirement, has a 28.75% tax rate, retires at age 65, and withdraws 4% of the account balance in the first year of retirement. The annual income estimate is in today’s dollars and assumes a 3% rate of inflation. Chart and estimates only account for future contributions and not current balances in an effort to illustrate characteristics of each contribution type. Any current tax benefit from contributing to a before-tax account is assumed to be spent and not factored into retirement income. The tax rate reflects estimated federal and state taxes. For illustrative purposes only. This is not meant to represent the performance of any investment options for your plan. Your results will vary.

Impact to your current annual pay

BEFORE-TAX

Annual Income

10% Before-Tax Contribution

Taxable Income

28.75% Tax Rate Income Tax

$50,000 $5,000 $45,000 .2875 $12,938

ROTH

Annual Income

10% Roth Contribution

Taxable Income

28.75% Tax Rate Income Tax

$50,000 $5,000 $50,000 .2875 $14,375

Estimate of annual income in first year of retirement

$8,000

$6,000

$4,000

$2,000

$0 Before-Tax Roth

$6,037

$4,302


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BenefitsWhy Save




• Free money


• Automatic services

• The auto-enroll service makes it easy to get started.

*All trades must comply with the fund’s excessive trading policy. Each T. Rowe Price fund prospectus defines its excessive trading policy.

• The auto-increase service helps you gradually boost your contribution rate over time.

• The auto-rebalancing* service helps you maintain your allocation strategy.

Take note…!

[OPTIONAL IF THE CLIENT OFFERS AUTO-ENROLL, AUTO-INCREASE, AND AUTO-REBALANCING]

**DELETE FOOTNOTE BELOW IF NO AUTO-REBALANCING**

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Auto-enroll service

• Automatically enrolls eligible employees into the employer’s retirement plan.

• You must give specific instructions to be excluded (opt out) during a specific grace period.

• You are enrolled with a default deferral percentage and investment option.

[DELETE SLIDE IF NO AUTO-ENROLL]

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Auto-rebalancing service

• Automatically rebalances your account to your selected investment allocation strategy.

• Lets you select quarterly, semiannual, or annual rebalancing.

• Helps you stay in line with your risk tolerance and helps reduce long-term account volatility.

[DELETE SLIDE IF NO AUTO-REBALANCING]

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BenefitsWhy Save




• Free money



• Flexible withdrawals

Take note…!

When the time comes, you have a variety of ways to get your money out of the plan.

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Flexible withdrawals

• Termination of service

• Retirement

• Age 59½

• Death

• Disability

• Financial hardship

Withdrawals prior to age 59½ may be subject to a 10% penalty tax unless rolled over to an IRA or eligible employer plan.

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BenefitsWhy Save




• Free money



• Flexible withdrawals

• Loans

Take note…!

Loans offer access to your money to meet special needs.

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Loans

• Borrowing from your account

– Minimum = $1,000

– Maximum = 50% of your vested account balance, up to $50,000*

• Interest = prime rate + 1%

• Pay your account back– Plus interest, over five years (10 years if buying a primary home)

• $50 fee for each loan

• Up to two loans at a time

*Reduced by the highest outstanding balance during the prior 12 months.

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InvestingSavings


Decide how much to save

• Experts suggest a 15% to 20% savings goal– Includes employer contributions

35

InvestingSavings


Plan contribution limits

• You can contribute between 1% and ____% of your before-tax pay up to $17,000 for 2012.

• If you will be 50 or over by the end of the year, and contribute the maximum amount allowed by your plan, you can contribute up to an additional $5,500 into the plan for 2012.

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InvestingSavings




• Start with ____% or more– Ensures you get the maximum match

37

InvestingSavings




• Start with ____% or more– Ensures you get the maximum match

• Increase your contributions annually– Helps you get closer to your goal

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Auto-increase service

• Automatically increases your payroll deduction each year so you don’t have to worry about doing it yourself.

• You choose the amount of the increase and the month you want it to occur.

• There is less time required to manage your account.

[DELETE SLIDE IF NO AUTO-INCREASE]

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Annual increase in contributions and the power of compounding

0

100,000

200,000

300,000

400,000

500,000

600,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

$

Salary $30,0002% contribution rate7% annual return3% annual salary increase

This is a hypothetical example for illustrative purposes only and is not meant to represent the investment return of any of your plan’s options. Your situation will vary.

$83,358


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Annual increase in contributions and the power of compounding

0

100,000

200,000

300,000

400,000

500,000

600,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

$

Salary $30,0002% contribution rate7% annual return3% annual salary increase

This is a hypothetical example for illustrative purposes only and is not meant to represent the investment return of any of your plan’s options. Your situation will vary.

$83,358

$385,289

1% annual contributionincrease with a 12% cap


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InvestingSavings


What are my investment choices?

• Pre-assembled Retirement Funds or

• Do-it-yourself investments based on your time horizon and risk profile

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InvestingSavings



• T. Rowe Price Retirement Funds– Professionally managed portfolios

– Easy for retirement investing

– Diverse portfolio combining stocks, bonds, and other securities

– Automatic adjustments for approximately 30 years after the target date

The principal value of the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate date when investors turn age 65. The funds invest in a broad range of underlying mutual funds that include stocks, bonds, and short-term investments and are subject to the risks of different areas of the market. The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus more on income and principal stability during retirement. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility.

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InvestingSavings


Select one and your decision is done

Participants born: Would select:In 1988 or after Retirement 2055Between 1983 and 1987 Retirement 2050Between 1978 and 1982 Retirement 2045Between 1973 and 1977 Retirement 2040Between 1968 and 1972 Retirement 2035Between 1963 and 1967 Retirement 2030Between 1958 and 1962 Retirement 2025Between 1953 and 1957 Retirement 2020Between 1948 and 1952 Retirement 2015Between 1943 and 1947 Retirement 2010Between 1938 and 1942 Retirement 2005In 1937 or before Retirement Income

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How Retirement Funds are managed

Retirement2055 Fund

Retirement2050 Fund

Retirement2045 Fund

Retirement2040 Fund

Retirement2035 Fund

Retirement2030 Fund

10.0%

90.0%

Retirement2025 Fund

Retirement2020 Fund

Retirement2015 Fund

Retirement2010 Fund

Retirement2005 Fund

RetirementIncome Fund

10.0%

90.0%

10.0%

90.0%

10.0%

90.0%

11.5%

88.5%

16.5%

83.5%

Stocks

Emerging Markets StockEquity Index 500Growth StockInternational Growth & Income

International StockMid-Cap GrowthMid-Cap ValueNew HorizonsOverseas StockReal AssetsSmall-Cap StockSmall-Cap ValueValue

Bonds

Emerging Markets BondHigh YieldInflation Focused BondInternational BondNew Income

22.5%

77.5%

30.0%

70.0%

38.0%

62.0%

48.0%52.0%

56.0% 44.0% 40.0%*60.0%

Underlying funds as of 1/1/12.

*Does not invest in the Growth Stock Fund or the Value Fund.

This chart shows the long-term neutral allocations for the funds as of January 1, 2012. The allocation for each fund may vary from the long-term neutral allocation. Call 1-800-638-7780 for the most current asset allocation.

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How your investment mix changes over time

0%

20%

40%

60%

80%

100%

35 40 45 50 55 60 65 70 75 80 85 90 95

Age

Stocks Bonds

The performance and risks of each Retirement Fund will directly correspond to the performance and risks of the funds in which it invests. By investing in many underlying funds, the Retirement Funds have partial exposure to the risks of many different areas of the market, including possible loss of principal.

Less Market Risk

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InvestingSavings



• Pre-assembled Retirement Funds or

• Do-it-yourself investments based on your time horizon and risk profile

47

InvestingSavings



Take note…!

Your plan offers several stock funds.

StocksHigherrisk/returnpotential

Lowerrisk/returnpotential

48

InvestingSavings


What is a stock fund?

• Invests in stocks

• Is risky, yet has the most potential for long-term returns

• A long time horizon is very important

49

InvestingSavings


Stock options

• [Customize per the plan lineup]

50

InvestingSavings


Your company stock

• Only invests in [CUSTOM] company stock, with minimal cash holdings

• Allows you to share in your company’s profits or losses

• Nondiversified investment

• Greatest volatility of principal

51

InvestingSavings



Take note…!

[Customize per the plan lineup]



Bonds

52

InvestingSavings


What is a bond fund?

• Invests in bonds

• May balance risk of growth investments

• Moderate risk with moderate return potential

53

InvestingSavings



Take note…!

[Customize per the plan lineup]



Bonds

Money Market/

Stable Value

An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in them.

54

InvestingSavings


What is a money market/stable value fund?

• May include U.S. Treasury bills, certificates of deposit (CDs), and other short-term investment instruments

• Provides stability and income to the investor

An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in them.

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Investing for retirementIt is important to spread your savings among different categories of investments: stocks, bonds, and money market/stable value. The length of time you plan to invest your savings should determine how much money you allocate to each type of investment. As you grow older, your portfolio should move gradually from more aggressive (more stocks) to more conservative (fewer stocks).

To find an investment mix for your time horizon, consider the following age-based asset allocations.

Diversify your stock allocation among different types of stocksA typical mixture could include 60% large-cap (established companies), 20% mid-cap/small-cap (small to medium-sized companies), and 20% international (companies outside the U.S.) stocks. Diversification cannot assure a profit or protect against loss in a declining market.

The allocation pie charts above are age-based only and do not account for your personal circumstances.

Your Age: 20s 30s 40s 50s 60s 70s and over

0%-10%

90%-100%

0%-10%

90%-100%

0%-20%

80%-100%

0%-10%

60%-80%

20%-30%

Stocks Bonds (Fixed Income) Money Market/Stable Value

5%-15%

50%-65%

25%-35%

Stock

60% Large-Cap Stock 20% Mid-/Small-Cap Stock 20% International Stock

20%-50%

35%-50%

15%-30%

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AchieveMonitor


When should I consider making changes?

• To get your investment mix back

Take note…!

You can call your plan provider [or insert call center number] for assistance.

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AchieveMonitor




• As your time horizon changes Take note…!

Usually, investors move toward more conservative investments as they near retirement.

58

AchieveMonitor




• As your time horizon changes

• When you have a “major” life event

Take note…!

Your goals may change after you marry or have children.

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AchieveMonitor




• As your time horizon changes

• When you have a “major” life event

• NOT in reaction to market fluctuations

Take note…!

Market timing can have a negative impact on your account.

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What are some of the benefits of the plan?

Free money

Multiple tax advantages

Automatic services

Flexible withdrawals

Loans

61

AchieveMonitor


Take action today!

• Join the plan!

• Save as much as you can!

• Invest wisely!

• Get ready for a great future!

Take note…!

[Insert plan’s eligibility criteria here]

621EnrollmentWithRDFs124938

UPDATE CODE WITH FILENAME WHEN CREATING PRESENTATION FROM TEMPLATE.DO NOT KEEP TEMPLATE NAME.

DELETE LEGAL CODE WHEN CREATING PRESENTATION FROM TEMPLATE. LEGAL CODE APPLIES TO MASTER ONLY.

Call 1-800-638-7780 to request a prospectus, which includes investment objectives, risks, fees, expenses, and other information that you should

read and consider carefully before investing.

T. Rowe Price Investment Services, Inc., distributor, T. Rowe Price mutual funds.

[Insert recordkeeper logo here]

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TO PLAN SPONSORS ─ This presentation should only be used as a visual presentation for T. Rowe Price Investment

Services, Inc., client meetings. This program should not be altered, printed, distributed, or posted for employees to access.

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TO WEB MEETING ATTENDEES ─ This Web meeting may be recorded and posted for other employees to access. For security reasons, please

do not speak or e-mail any personal information during this meeting. For example, you should not give your address, Social Security number,

or account information during this Web meeting.

enrollment retirement funds date presenter name. 2 welcome informationprocessyour role...

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social security benefits

social security administration

savebenefits social

tax penalties

tax issues

women eligibility

tax advice

average life expectancy