Transcript Document

Prepare for
retirement …
wisely
with
Today’s
SoonerSave Agenda



The Nuts and Bolts of SoonerSave
Prepare for Retirement … Wisely
Your SoonerSave Investment Options
The Nuts and Bolts
of SoonerSave

What is a Deferred
Compensation (457) Plan?

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Section 457 of the Internal
Revenue Code
For public employees only
It can help you save extra
retirement dollars
You voluntarily set aside some
of your income before you pay
current taxes! Withdrawals are
subject to ordinary income tax.
You can contribute 100% of
your taxable income up to
$16,500 (whichever
is less) in 2011

What is a Savings Incentive
[401(a)] Plan?

Section 401(a) of the
Internal Revenue Code
 Allows your employer to
help you save extra
retirement dollars!
 Your employer contributes
money on your behalf and it
grows tax-deferred1
1 For the 401(a) Plan, withdrawals made prior to age 59½ may be subject to a 10% federal tax penalty.
Getting
Started

Who is eligible to enroll?


All current employees
are eligible immediately
How much can you
contribute?

You contribute a
minimum of $25 per
month to the 457 Plan
 State contributes
$25 per month to the
401(a) Plan

What is “Catch-Up”?2
 Age 50 and Over Catch-Up
 You may contribute
an additional $5,500
in 2011
 Regular 457 Plan Catch-Up
 You may be able to
contribute up to $33,000
per year for the last three
years prior to eligible
retirement age, based on
contributions not made in
previous years
2 Age 50+ Catch-Up and Regular 457 Catch-Up cannot be used simultaneously.
Managing
Your Account

Monitor your progress with:

Website
www.soonersave.com3
 KeyTalk®3
(877) 538-3457

You can:

Check your account balance
 Transfer among investment
options3
 Change how your payroll
contributions are invested
 And much more!
3 Access to KeyTalk and the website may be limited or unavailable during periods of peak demand,
market volatility, systems upgrades/maintenance or other reasons. Transfer requests made via the
website or KeyTalk received on business days prior to close of the New York Stock Exchange (3:00
p.m. Central Time or earlier on some holidays or other special circumstances) will be initiated at the
close of business the same day the request was received. The actual effective date of your
transaction may vary depending on the investment option selected.
Transfers
and Rollovers

You can transfer approved
balances from a former
employer’s plan4:

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457 plan
403(b) plan
401(k) plan
401(a) plan
Or an Individual Retirement
Account (IRA)
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If you leave employment
with the State of Oklahoma,
you can transfer your
account to your new
employer’s (if allowed) plan:
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457 plan
403(b) plan
401(k) plan
401(a) plan
Or an IRA
4 Keep in mind that if you transfer your 457 dollars to a 403(b), 401(k), 401(a) or IRA,
you will no longer be able to take a withdrawal before age 59½ if you leave employment
without possibly incurring the 10% federal tax penalty.
Withdrawals from 457(b) Plan

You can withdraw when you:

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Retire
Terminate employment5
Suffer an unforeseeable
emergency5
Reach age 70½
Die (your beneficiary(ies) receive

Distribution options

Lump sum
 Periodic payments
 Transfer to another plan if
allowed by the employer or
to an IRA
your account)
5 As defined by the Internal Revenue Code and/or your Plan’s provisions.
Fees

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Great-West Retirement Services® fee = $0
457 Plan fee = $2 deducted each quarter
401(a) Plan fee = $1 deducted each quarter
Various investment operating expenses6
6 The investment options have annual operating expenses, which differ depending on
the options you choose.
Income Taxes


Contributions are deducted before income taxes are calculated,
so you pay less in current income taxes
Contributions and any earnings are taxed as ordinary income
when withdrawn, usually at retirement
Withdrawals are subject to ordinary income tax. A 10% early withdrawal penalty may apply to withdrawals
made prior to age 59½. The 10% early withdrawal penalty does not apply to 457 plan withdrawals.
Prepare for Retirement … Wisely

Learn the value of SoonerSave
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Easy enrollment and saving
$25 from the State of Oklahoma
Tax-deferred saving
Investment choice
Convenient account management
Savings and investment education
Representatives of GWFS Equities, Inc. are not registered investment advisers, and cannot offer
financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax adviser as
needed.
Start Saving Now
for Your future

Save enough to afford your future

You may need to replace about 70% of your annual
pre-retirement income*
 We’re living longer and healthier
lives than ever before
 Social Security and pensions
often won’t be enough
 Don’t forget about inflation
33
* Source: https://www.socialsecurity.gov/planners/morecalculators.htm
3 Access to the website may be limited or unavailable during periods of peak
demand, market volatility, systems upgrades/maintenance or other reasons.
Start Saving Now
for Your Future

Still not convinced?
Start now, don’t wait.
$91,465
Sarah’s contributions
Sarah’s account value
David’s contributions
David’s account value
$86,624
$37,270
$20,485
$15,000
Age 35
$37,500
$20,485
$15,000 each
Age 45
$15,000
Age 60
FOR ILLUSTRATIVE PURPOSES ONLY. This hypothetical illustration does not represent
the performance of any investment options. It assumes a 6% annual rate of return and
reinvestment of earnings, with no withdrawals. Rates of return may vary. Distributions from a
tax-deferred retirement plan are taxable as ordinary income. The illustration does not reflect
any charges, expenses or fees that may be associated with your Plan. The tax-deferred
accumulation shown would be reduced if these fees had been deducted.
The Power
of Tax-Deferred Saving
Sarah’s Paycheck Comparison
Gross Pay
Saving
Before Tax
$2,000
Saving
After Tax
$2,000
Minus Contributions to
SoonerSave (Before Tax)
- $100
-$0
Taxable Pay
$1,900
$2,000
Minus Estimated Tax
Withholding from Pay
- $361
- $380
- $0
- $100
$1,539
$1,520
Minus Contributions to Other
Savings Plan (After Tax
Spendable Pay
Before-Tax Advantage
$19
By saving
before tax in
SoonerSave,
Sarah has $19
more to spend
(or save!) each
month—that’s
$228 a year!
None
FOR ILLUSTRATIVE PURPOSES ONLY. This hypothetical illustration assumes $2,000 in monthly wages, 15%
federal income tax withholding, and 4% state and local income tax withholding. It does not account for Social
Security or Medicare tax.
Saving a Little More
Can Mean a Lot
FOR ILLUSTRATIVE PURPOSES ONLY. This hypothetical illustration does not represent the performance of
any investment options. It assumes a 6% annual growth rate and reinvestment of earnings, with no
withdrawals. Rates of return may vary. The illustration does not reflect any charges, expenses or fees that may
be associated with your Plan. The tax-deferred accumulations shown would be reduced if these fees had been
deducted.
Plan now
for Your Future

The key to meaningful planning is knowing how all of your
benefit plans work together
OPERS Defined Benefit Plan —
Not your only source of retirement income
 SoonerSave —
A supplement to your retirement savings to help maintain your
standard of living

Plan now
for Your Future
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An example – Sam, State of Oklahoma employee:

Is age 60 and is retiring now
 Earned an average of $30,327 in the last three years
 Has accrued 21 years of service credit
Average Compensation
$30,327
x Service Credit
x 21 Years
x 2%
x 2%
Sam’s Yearly Pension Benefits $12,737
FOR ILLUSTRATIVE PURPOSES ONLY. Assumes average of $30,327 annual
salary in the last three years and 21 years of state service credit. Source:
OPERS, 2011
Plan now
for Your Future

Sam, before he is eligible for Social Security at age 65 and 8 months:
 Has previous monthly income of $2,527 ($30,327÷12)
 Will receive an estimated monthly pension of $1,061 ($12,737÷12)
Previous monthly income
$2,527
- Pension benefit
- $1,061
Estimated Shortfall Each Month$1,466
FOR ILLUSTRATIVE PURPOSES ONLY. Assumes average of $30,327 annual
salary in the last three years and 21 years of State service credit. Shortfall does
not include the effects of inflation. Source: OPERS, 2011
Plan now
for Your Future
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Sam may need as much as $99,688 ($1,466 x 68 months) to
maintain his standard of living from now until he starts receiving
Social Security benefits at age 65 and 8 months.
Previous monthly income
$2,527
- Pension benefit
- $1,061
Sam’s Estimated Shortfall Each$1,466
Month Before Receiving Social Security
FOR ILLUSTRATIVE PURPOSES ONLY. Assumes average of $30,327
annual salary in the last three years and 21 years of State service credit.
Shortfall does not include the effects of inflation. Source: OPERS, 2011
Plan now
for Your Future

Sam, after he is eligible for Social Security at age 65 and 8 months:
 Has previous monthly income of $2,527 ($30,327÷12)
 Will receive an estimated monthly pension of $1,061 ($12,737÷12)
 Will receive an estimated monthly Social Security benefit of $1,069
Previous monthly income
- Pension benefit
- Social Security benefit
Sam’s Shortfall Each Month
$2,527
- $1,061
- $1,069
$397
FOR ILLUSTRATIVE PURPOSES ONLY. Assumes average of $30,327
annual salary in the last three years and 21 years of State service credit.
Shortfall does not include the effects of inflation. Source: OPERS, 2011
Plan now
for Your Future

Sam may need an additional $95,280 ($397 x 12 x 20 years) to
maintain his standard of living after age 65 and 8 months over
his expected lifetime of approximately 20 more years.
So, Sam may need to replace a total of $194,968 to maintain
his standard of living throughout his retirement.
Source: OPERS, 2011
Plan now
for Your Future

Where SoonerSave comes in —
Sam could have saved enough through SoonerSave to prevent
his income shortfall
If Sam started
saving at
Age 25
Age 30
Age 35
Age 40
Age 45
Age 50
Sam’s
contribution
He would have
needed to save
$98 per month
$137 per month
$194 per month
$281 per month
$422 per month
$671 per month
=
=
=
=
=
=
$73
$112
$169
$256
$397
$646
State
contribution
+
+
+
+
+
+
FOR ILLUSTRATIVE PURPOSES ONLY. Assumes 6% annual rate of return, compounded annually,
with no withdrawals or fees taken into account. If such fees were deducted, tax-deferred
accumulations would be reduced. Not intended to represent performance of any particular
investment. Rates of return may vary. Source: Great-West Retirement Services, 2011
$25
$25
$25
$25
$25
$25
Asset Allocation
and Investments


Your retirement dreams
are yours alone
When you save for
retirement, do it your
way

Think of:
 Your goals
 When you want to
achieve them
 What you need to do
to get there
 How much risk you’re
willing to take
Asset Allocation
and Investments

A quick overview:
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
Risk is the possibility for gain or
loss on your investment
Return is the actual gain or loss
on your investment, usually
expressed as an annual
percentage rate
Asset Allocation
and Investments

Diversify7 with asset allocation

Invest for your risk tolerance
and savings goals
 Know your time frame
7 Diversification of an investment portfolio does not ensure a
profit and does not protect against loss in declining markets.
8 Access to KeyTalk and the website may be limited or
unavailable during periods of peak demand, market volatility,
systems upgrades/maintenance or other reasons.
Visit the website at www.soonersave.com8
to take a risk tolerance quiz and get asset allocation
suggestions for your SoonerSave accounts.
Asset Allocation
and Investments

Choose the right investment mix



Cash Equivalents
“Bank or Stable Value”
Bonds
“Fixed Income”
Stocks
“Equity”
Certificates of deposit are insured by the FDIC for up to $250,000 per depositor
and offer a fixed rate of return, whereas both the principal and yield of bonds and
stocks will fluctuate with market conditions.
Investments for Your Journey
Your SoonerSave
Investment Options
Your SoonerSave
Investment Options
 Target





Date
Vanguard Target Retirement 2010 Fund
Vanguard Target Retirement 2020 Fund
Vanguard Target Retirement 2030 Fund
Vanguard Target Retirement 2040 Fund
Vanguard Target Retirement 2050 Fund
The date in the Target Retirement Fund represents an approximate date when an investor expects
to retire. The principal value of the funds is not guaranteed at any time, including the target date.
Your SoonerSave
Investment Options

Cash Equivalents

SoonerSave Stable Value Fund
Your SoonerSave
Investment Options

Bond9


T. Rowe Price Spectrum Income Fund
T. Rowe Price High Yield Fund10
9 A bond fund’s yield, share price and total return change daily and are based on changes in interest
rates, market conditions, economic and political news, and the quality and maturity of its investments. In
general, bond prices fall when interest rates rise and vice versa.
10 Although they have higher return potential, high yield bonds are also subject to greater risk, including
the risk of default, compared to higher-rated securities.
Your SoonerSave
Investment Options

Balanced

T. Rowe Price Balanced Fund
Your SoonerSave
Investment Options

Large-Cap




American Century Income & Growth Fund
BlackRock S&P 500® Stock Fund
T. Rowe Price Blue Chip
Growth Fund
T. Rowe Price Total Equity
Market Index Fund
S&P 500® Index is a registered trademark of Standard & Poor’s Financial Services
LLC.
Your SoonerSave
Investment Options

Mid-Cap11



American Century Vista
Advisor Fund
Artisan Mid Cap Value Fund
Columbia Acorn Fund
11 Equity securities of medium-sized companies may be more volatile than securities
of larger, more established companies.
Your SoonerSave
Investment Options

Small-Cap12


BlackRock Small Cap
Growth Equity Fund Instl
Perkins Small Cap
Value Fund
12 Equity securities of small-sized companies may be more volatile than
securities of larger, more established companies.
Your SoonerSave
Investment Options

International Stock13


American Funds
EuroPacific Growth Fund
T. Rowe Price Emerging
Markets Stock Fund
13 Foreign investments involve special risks, including currency fluctuations and political developments.
Your SoonerSave
Investment Options
Self-Directed Brokerage Option

For knowledgeable and
experienced investors
 Available for an additional fee of
$15, assessed to your account
quarterly.
 Plus transaction fees
 Online service only

457 Plan account only
 Select from thousands of mutual
funds in addition to your core
investment options
 Securities for this service are
offered by TD Ameritrade
Prospectus Offer

Please consider the investment objectives, risks, fees and expenses
carefully before investing. For this and other important information,
please obtain the mutual fund prospectus and disclosure documents
from the SoonerSave website (www.soonersave.com) or by calling
KeyTalk® at (877) 538-3457. For prospectuses related to
investments in the Self-Directed Brokerage account, contact TD
Ameritrade at (866) 766-4015. Read them carefully before investing.
 Access to KeyTalk and the website may be limited or unavailable
during periods of peak demand, market volatility, systems
upgrades/maintenance or other reasons.
Manage your account
Monitor your progress
KeyTalk® (Phone)
Services Available*
Website
(877) 538-3457 www.soonersave.com
Order or personalize your PIN14
X
X
Check account balance, allocations
and transactions
X
X
Check investment performance
X
X
Transfer among investment options*
X
X
Use financial calculators and tools
X
E-mail a customer service representative
X
Talk with a customer service representative
(8:00 a.m. to 9:00 p.m. Central Time)
X
* Access to KeyTalk and the website may be limited or unavailable during periods of peak demand, market volatility, systems
upgrades/maintenance or other reasons. Transfer requests made via the website or KeyTalk received on business days prior to close of the New
York Stock Exchange (3:00 p.m. Central Time or earlier on some holidays or other special circumstances) will be initiated at the close of
business the same day the request was received. The actual effective date of your transaction may vary depending on the investment option
selected.
14 The account owner is responsible for keeping the assigned PIN confidential. Please contact Great-West Retirement Services immediately if
you suspect any unauthorized use.
Questions?
Core securities (except those offered through the self-directed brokerage option), when offered, are offered through
GWFS Equities, Inc., a wholly owned subsidiary of Great-West Life and Annuity Insurance Company.
Brokerage services provided by TD Ameritrade, Division of TD Ameritrade Inc., member FINRA/SIPC. TD
Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.
©2011 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission. Additional information can be
obtained by calling (866) 766-4015. TD Ameritrade and GWFS Equities, Inc. are separate and unaffiliated. Great-West
Retirement Services® refers to products and services offered through Great-West Life and Annuity Insurance Company
and its subsidiaries and affiliates. Representatives of GWFS Equities, Inc. are not registered investment advisers and
cannot offer financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax adviser as
needed. Great-West Retirement Services® and KeyTalk® are registered trademarks of Great-West Life and Annuity
Insurance Company. ©2011 Great-West Life and Annuity Insurance Company. All rights reserved. Not intended for
plan sponsors whose situs is in New York. Form# CB1000-EnrollPres (02/11) PT120813
Thank you!
Representatives of GWFS Equities, Inc. are not registered investment advisers and cannot offer financial, legal or tax
advice. Please consult with your financial planner, attorney and/or tax adviser as needed.