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Enrollment Presentation for the Ashville Saving Bank Retirement Savings Plan
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Our difference is your advantage
IT’S YOUR FUTURE— PLAN FOR IT
Asheville Savings Bank Retirement Savings Plan
Presented by:Jeff Hale, AIFA®
Senior Consultant
PLAN FOR YOUR FUTURE
Understand how the plan works
Set your savings goals
Develop an investment strategy
Choose your investments
ELIGIBILITY
Joining The Plan:
12 Months of Service during which 1,000 hours have been completed
Entry Dates are monthly
YOUR CONTRIBUTIONS
Pretax Savings
You choose the amount, from 1% up to 60% of salary
2011 Maximum is $16,500
50 yrs + can make a $5,500 Catch Up
Flexibility to change contribution rate as often as once per month
It’s Completely Flexible:
MATCHING CONTRIBUTIONS
Your employer will match 100% of the first 3% that you save, plus 50% of the next 2% you save
It’s like getting free money!
If you contribute at least 5% of your pay, the bank will contribute 4% to the plan, that’s an immediate return on your savings.
An Immediate Return
VESTING
You are always 100% vested in any contributions you make to the plan
You are 100% vested in employer matching contributions immediately
When does the money become mine?
WHAT IF YOU NEED YOUR MONEY?
Hardship Withdrawals
Loans
In-Service Withdrawals
Accessing Your Account
HARDSHIP WITHDRAWALS
Allowable only for Specific Situations Purchase a Primary Residence Prevent eviction or foreclosure on your home Un-reimbursed medical expenses Tuition expenses Funeral expenses Qualifying repairs to your principal residence
Penalties and Taxes to Consider
Accessing Your Account
BORROWING FROM YOUR ACCOUNT
Up to 50% of Vested Account Balance
Minimum $1,000, Maximum $50,000
Pay back with Prime +1% Interest
Convenient Repayment Through Payroll Deduction
Accessing Your Account
IN-SERVICE WITHDRAWALS
Rollover amounts Age 59 ½ Penalties and Taxes to Consider
Accessing Your Account
CAN I ROLLOVER MY IRA ACCOUNT?
Rollover amounts from other qualified plans or IRAs
An easy way to consolidate your retirement accounts for greater convenience, cost-savings and control
Consolidate Your Assets
WHAT HAPPENS WHEN I LEAVE?
You can leave the money in the plan (account balance must be over $1000)
You can arrange a direct rollover
You can set up installment payments
You can take your money now -- with implications: income taxes,10% penalty tax, if under age 59 1/2, and 20% withholding
SOCIAL SECURITY ISN’T ENOUGH
But Your Plan Can Help Bridge The Gap
46%
40%
36%34%
30%
42%
38%35%
31%28%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000
Perc
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Soci
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SAVING A LITTLE CAN ADD UP TO A LOT!
ITEM
SAVINGS INCREASE SAVINGS BY
Movies, once a month $10 month/ $120 a year $9,574
Buying lunch, twice a week $10 week/ $520 a year $41,519
Compact disc, once a month $15 month/ $180 a year $14,360
Gourmet coffee, once a week $4 week/ $208 a year $16,608
Take out for dinner, once a week $30 week/ $1,560 a year $124,469
Hypothetical examples of savings are based on contributions made to a tax-deferred retirement account earnings an 8% annual rate of return compounded at the same rate as contributions over a 25-year period. Your own investment returns may earn more or less than this example.
YOUR INVESTMENT STRATEGY
Understanding Asset Classes
Three general asset classes--stocks, bonds and fixed income investments
Each asset class has different risk and return characteristics
Determining which are most appropriate for you is the first step in building an investment strategy
FIXED INCOME FUNDS
Invest in short-term securities issued by banks, corporations, and the U.S. government
Fixed income investments can protect the value of your money over short periods of time; but run the risk of not keeping up with inflation
Consider fixed income investments if you are a conservative investor and will need your money in one to three years or to balance a more aggressive portfolio
BOND FUNDS
Invest in bonds and other interest-earning securities issued by governments and corporations
As interest rates rise and fall, the value of a bond rises and falls in the opposite direction
Consider bonds if you are willing to accept moderate levels of risk and may not need your money for at least several years
STOCK FUNDS
Invest in shares of stock in companies
Stocks offer the highest potential return over time, but also involve the greatest amount of risk to your principal.
Consider stocks if you are investing for the long-term and are comfortable with a higher degree of risk
HOW $1,000 GREW OVER 31 YEARS (’80 – ’10)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000 Stocks
Bonds
Cash Equivalents
Inflation
Stocks 11.4%, Bonds 8.7%, Fixed Income 5.5%, Inflation 3.4%
1980 2010
$28,077
$13,332
$5,237
$2,858
THINGS TO REMEMBER
About Risk And Return
Generally, the higher an investment’s risk, the higher the potential return
The greater an investment’s stability, the lower the potential return
The shorter the time frame you have for investing, the less risky (more conservative) your investments should be
Pentegra Offers 2 Ways to Approach Asset Allocation
1. The hands-on, Self-Directed approach
2. The easy, hands-off way to invest based on Time Horizon (Target Retirement Funds)
SELF-DIRECTED APPROACH
Your plan offers a wide array of investment choices to help you meet your retirement and investment goals
You can choose to invest in several different investment categories
WHAT’S THE RIGHT ASSET ALLOCATION FOR YOU?
Time Frame Conservative Moderate Aggressive
11 or more Years Stocks 40-60%
Bonds 20-40%
Fixed Income 20-40%
Stocks 60-75%
Bonds 20-40%
Fixed Income 10-25%
Stocks 90-100%
Bonds 0-10%
6 to 10 Years Stocks 30-50%
Bonds 25-45%
Fixed Income 25-45%
Stocks 40-60%
Bonds 20-40%
Fixed Income 20-35%
Stocks 75-100%
Bonds 0-25%
Less than 5 Years Stocks 0-30%
Bonds 40-75%
Fixed Income 25-40%
Stocks 15-50%
Bonds 40-75%
Fixed Income 10-35%
Stocks 50-75%
Bonds 25-50%
Fixed Income 0-25%
T. ROWE PRICE RETIREMENT FUNDS
Time horizon based strategies, ready-made investment portfolios
Allows participants to put their investment strategy on “autopilot”
The funds invest in more than one asset category to reduce risk through diversification
Professionally managed, diversified portfolios
Automatically rebalance to a more conservative strategy as retirement age approaches
Participants should choose the fund that most closely matches expected year of retirement
The Easy Way To Invest for Retirement
401(k) Savings Plan Investment Selection MenuASSET CLASS INVESTMENT MENU ALTERNATIVESU.S. Equities (Stocks)
Large-Cap Blend Vanguard 500 Index Fund Signal (VIFSX)Value American Beacon Large Cap Value Fund Instl (AADEX)Value T. Rowe Price Equity Income (PRFDX)Growth T. Rowe Price Growth (PRGFX)
Midcap Blend Vanguard Mid-Cap Index Fund (VMISX)
Small-Cap Blend Royce Pennsylvania Mutual Fund Investment (PENNX)
REIT T. Rowe Price Real Estate Fund (TRREX)
Non-U.S. Equities (Stocks)Large-Cap American Funds EuroPacific Growth Fund (RERGX)
BondsCore Plus PIMCO Total Return Bond Fund Instl. (PTTRX)Fixed IncomeMoney Market Federated Treasury Obligations Fund Instl. (TOIXX)CD Fund Asheville Savings Bank CD Fund
Target Date Retirement T. Rowe Price Retirement Funds
Supplmental
Employer Stock ASB Bancorp Unitized Stock Fund
PLAN COMMUNICATIONS
Pentegra Online www.pentegra.com
Voice Response Phone 800-433-4422
Live Representatives 800-872-3473 (will supply new PIN #)
Quarterly Statements
PENTEGRA ONLINE
Manage your account and perform transaction online
Access financial planning tools
Obtain Investment Guidance
Obtain daily investment performance information
View investment fund descriptions and historical performance
Access enrollment & education materials
Use our convenient library of plan forms
www.pentegra.com
PENTEGRA ONLINE
PENTEGRA ONLINE
PENTEGRA ONLINE
PENTEGRA ONLINE
PENTEGRA ONLINE
PENTEGRA ONLINE
PENTEGRA ONLINE
ONLINE ENROLLMENT
ONLINE ENROLLMENT
ONLINE ENROLLMENT
ONLINE ENROLLMENT
ONLINE ENROLLMENT
ONLINE ENROLLMENT
ONLINE ENROLLMENT
ONLINE ENROLLMENT
PENTEGRA ONLINE
PENTEGRA ONLINE
YOUR 401(k) PLAN
It’s easy
It’s convenient
It’s the smart way to build a secure future
Start saving today!
YOUR 401(k) PLAN
Questions & Answers
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