Getting on the Right Path with Your Workplace Savings Plan Workplace Education Series

Getting on the Right Path with Your Workplace Savings Plan

Workplace Education Series


So, you’re starting to think about saving for retirementToday’s agenda:

– Benefits of saving at work

– Choosing your investments

– Determining your next steps

– Staying in touch with Fidelity

Workplace Education SeriesSave for retirement first

Your UNM Hospitals retirement plan is hard to beat

– Ease and convenience

– Investment choice

– Potentially lowers taxable income

– Tax-deferred growth

– Compounded growth potential

Some Tools to Help: Use our Contribution Calculator to try some “what-if” planning—and the Take-Home Pay Calculator to see what a bargain it can be to save in your plan.

Maximize your workplace savingsopportunities

Let’s explore:– The importance of starting early– Annual IRS limits– How consolidation can help simplify finances

Workplace Education SeriesSaving in your plan may cost less than you think

Because contributions are made before taxes are withheld

$30,000 salary $50,000 salary $75,000 salary

6% contribution

8% contribution

10% contribution

$26

$44

$35

$44

$72

$58

$65

$108

$86

This hypothetical example assumes a $30,000, $50,000, and $75,000 annual salary; filing single at a 25% federal income tax rate on the take-home-pay chart; state and local taxes are not included. The weekly contribution to your account is a tax-deferred contribution; income taxes will be due when you withdraw from the account.

$35

$46

$58

$96

$77

$58

$87

$115

$144

The net effect on take-home pay

Workplace Education SeriesFirst, maximize your employer match

Don’t put it off another day– “Free” money

– Your decision to start now could help you accumulate a lot more for retirement

– You can always increase your contribution later

Reminder: If you have not already selected your beneficiaries, or if you have experienced a life-changing event such as a marriage, divorce, birth of a child, or a death in the family, it’s time to consider your beneficiary designations.

Workplace Education SeriesIncrease contributions to the maximum allowed

10% – 15% of your pay is a good benchmark

– Strive to reach the maximum annual pretax contribution limit ($18,000 in 2015)

– Take advantage of catch-up contributions, if eligible ($6,000 in 2015)

– Continue ease and discipline of payroll deduction

Once you’re at that level, then you can think about other tax-advantaged savings vehicles outside of your workplace savings plan.

Workplace Education SeriesOver time, that can add up to big savings

Invest now, thank yourself later

$30,000 salary $50,000 salary $75,000 salary

$209,581$261,350

$313,119 $313,119

$399,400

$485,682$442,541

$571,964

$701,386

This hypothetical example assumes a beginning plan account balance of $10,000; starting annual gross salary of $30,000, 50,000 and 75,000; salary increase of 3% each year; pre-tax contributions of 6%, 8% and 10% of salary every week for 25 years and an effective annual rate of return of 7%. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Earnings and pre-tax contributions are subject to taxes when withdrawn. Distributions before age 59 1/2 may also be subject to a 10% penalty. Contribution amounts are subject to IRS and Plan limits. This example is for illustrative purposes only and does not represent the performance of any security. Individuals may earn more or less than this example. Investing on a regular basis does not ensure a profit or guarantee against a loss in a declining market.

6% contribution

8% contribution

10% contribution

Growth of investment over 25 years


Keep in mind that fees may apply when closing and consolidating accounts.

Simplify your finances by consolidating accounts

Offers compelling benefits for managing retirement savings

– Keep all of your assets in one place – Fewer statements– Track overall performance– Maintain investment strategy of choice

We Can Help: For help consolidating your retirement savings, schedule a complimentary one-on-one consultation

Plan detailsUNM Hospitals 403(b) Tax Sheltered Annuity PlanUNM Hospitals 457(b) Deferred Compensation Plan


Plan Features

This workshop only provides a summary of the main features of the Plan, and the Plan document will govern in the event of any discrepancies.

Eligibility Requirements All Contributions All UNMH Employees are immediately eligible to participate in the UNM Hospitals 403(b)

and 457(b) Plans. You may contribute in one or both plans at the same time.

Contributions

Employee Contributions

IRS Limits

2015 $18,000

Catch-up limit

2015 $6,000

Your 403(b) and 457(b) pretax contributions are deducted from your pay before income taxes are taken out. This means that you lower the amount of current income taxes deducted each payday and it means more money in your take-home pay. You may make contributions to one or both plans at the same time allowing you to maximize your retirement savings potential.

You pay no taxes on any earnings until you withdraw them from your accounts.

If you make the maximum contribution to your plan account, and you are 50 years of age or older during the calendar year, you can make additional “catch-up” contributions.

You choose where you would like your contributions invested.

Last 3 years of service catch-up provision in the 457(b) Plan.

403(b) Employer Contributions

UNMH contributes 5.5% of gross base pay after you complete one continuous year of benefits-eligible service.

UNMH contributions go into the MetLife Stable Value Option. You can choose where they go once you are fully vested.

Vesting

Employee Deferrals You are 100% vested in your contributions and earnings.

Employer Contributions Vesting Schedule

Years of Service Vesting Percentage

less than 3 0

3 25 4 55 5 100


Loans Available in 403(b) Plan only

Minimum loan amount: $1,000

Maximum loan amount: Generally 50% of vested account balance not to exceed $50,000

Maximum number of loans outstanding at a time: 1 (refer to the plan document for allowable loans reasons)

Loan initiation fee: $50.00 deducted from your plan account

Quarterly maintenance fee: $6.25 deducted from your plan account

Loan repayments made through the Automated Clearing House

Withdrawals

403(b) Plan

Permitted if you terminate your employment, retire, reach age 59½, become permanently disabled, or have severe financial hardship as defined by your Plan.

If under age 59½ at the time of distribution, a 10% early distribution tax penalty may apply.

If the distribution is eligible to be rolled over, but is not directly rolled over to an eligible plan or IRA, 20% mandatory withholding of federal income tax applies.

457(b) Plan

Permitted if you terminate employment, attain age 70½, or the Plan is terminated.

Taxed as ordinary income in the year withdrawn.

If the distribution is eligible to be rolled over, but is not directly rolled over to an eligible plan or IRA, 20% mandatory withholding of federal income tax applies.

Federal income tax will not be withheld if an eligible plan-to-plan transfer is made to another employer's 457(b) plan that accepts the transfer.

Plan Features (con’t)

This workshop only provides a summary of the main features of the Plan, and the Plan document will govern in the event of any discrepancies.

The fundamentals of investing

Let’s explore:– The principles of asset allocation– Different investment types– The importance of diversification

Workplace Education SeriesThe principles of asset allocation

Asset allocation = combining different investment types

Up to 91.5% of variations in returns can be attributed to asset allocation.*

* Source: "Determinants of Portfolio Performance," Brinson, Hood and Beebower, Financial Analysts Journal, July-August 1986, and "Determinants of Performance II: An Update," Brinson, Singer and Beebower, Financial Analysts Journal, May-June 1991. This represents a landmark study which has not been refuted and which stands today as a valid, widely accepted theory.

Stocks (equities)

Bonds(fixed income)

Cash(short-term)

Higher Potential RiskHigher Potential Return

Moderate Potential RiskModerate Potential Return

Lower Potential RiskLower Potential Return


The three investment types and the role they play

Each investment type offers unique advantages

Short-term investments Bonds Stocks

– Money market, T-bills, CDs

– Relatively stable value– Potential to pay interest– Lower risk, lower

potential return

– I.O.U.– Debt securities issued by

governments and corporations

– Potential to pay interest– Moderate risk, moderate

potential return

– Share of a company, “equity”

– Long-term growth potential

– Value can go up and down

– Higher risk, higher potential return

Inflation risk Investment risk

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 per share, it is possible to lose money by investing in these funds.

Workplace Education SeriesThe importance of diversification

Diversification = spreading out investments within investment types

Neither diversification nor asset allocation ensures a profit or guarantees against loss.

Diversification Spread out your investments

within investment types

Mutual FundsInclude a variety of stocks

and/or bonds

Bond Fund

Stock Fund

Bonds (fixed income)

Stocks (equities)

Cash (short-term)

Cash (short-term)

Workplace Education SeriesA smart investment mix

Asset allocation + diversification = a smart investment mixCombining them skillfully can help you

– Reduce portfolio risk and volatility

– Match your investment strategy to your time horizon, financial situation, and risk tolerance

– Tap into market opportunities

– Avoid the pitfalls of market timing

Neither diversification nor asset allocation ensures a profit or guarantees against loss.

Portfolio Review is an educational tool.

A Tool to Help: Use Portfolio Review to find your target asset mix or complete the Investor Profile Questionnaire.

Workplace Education SeriesIt’s about solving for three factors

Finding the right mix depends on your:

A Tool to Help: Use Portfolio Review to find your target asset mix and create an action plan to help align your portfolio with your goals. Or, complete the Investor Profile Questionnaire.

Portfolio Review is an educational tool.

Tolerance for risk Time horizon Financial situation

Workplace Education SeriesThen, determine what mix of investment types match your investment approach

Finding the right mixHow four hypothetical investment mixes align with different approaches to investing

For illustrative purposes only.

The purpose of the target asset mixes is to show how target asset mixes may be created with different risk and return characteristics to help meet a participant’s goals. You should choose your own investments based on your particular objectives and situation. Remember, you may change how your account is invested. Be sure to review your decisions periodically to make sure they are still consistent with your goals. You should also consider any investments you may have outside the plan when making your investment choices.

These target asset mixes were developed by Strategic Advisers, Inc., a registered investment adviser and Fidelity Investments company, based on the needs of a typical retirement plan participant.

60%10%

25%

Aggressive Growth

May be appropriate for investors: • Comfortable with

wide fluctuation• > 10 years until

retirement goal

May be appropriate for investors: • Comfortable with

moderate fluctuation

• < 5 years until retirement goal

Balanced

60%25%

15%

35%40%

15%10%

Growth

May be appropriate for investors:

• Looking to minimize fluctuation

• < 5 years until retirement goal

• Comfortable with significant fluctuation

• > 5 years until retirement goal

May be appropriate for investors:

Conservative

49%25%

21%5%

6%

14%

50%

30%

Domestic Stock Foreign Stock Bond Short-term Investments

Reviewing your plan’s investment options


Hands-on or hands-off?– Do you want to make your own investment decisions?– Are you comfortable building your own portfolio?– Do you have the time to actively manage your investments?

An investment approach for every investment style

Lifecycle funds*Provide an automatic

investment mix that becomes continually more conservativeas time goes on. Just pick the

fund with the year that’s closestto the year you plan to retire.

Let us guide youUse our investment guidance

tool, Portfolio Review**, to identify a target investment

mix, receive a model portfolio suggestion, and easily

implement your strategy.

Do-it-yourselfAccess Fidelity’s research resources, and utilize our

fund selection tools to buildyour own portfolio.

Hands-onHands-off

*Lifecycle funds are designed for investors expecting to retire around the year indicated in each fund’s name. The investment risk of each lifecycle fund changes over time as its asset allocation changes. Lifecycle funds are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.**Portfolio Review is an educational tool.Guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions.Neither diversification nor asset allocation ensures a profit or guarantees against loss.


Lifecycle Funds

Vanguard Target Retirement Income Fund Investor Shares

Vanguard Target Retirement 2010 Fund Investor Shares











Target date investments are represented on a separate spectrum because they are generally designed for investors expecting to retire around the year indicated in each investment's name. The investments are managed to gradually become more conservative over time. The investment risks of each target date investment change over time as its asset allocation changes. They are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.

Investment options to the left have potentially more inflation risk and less investment risk

Investment options to the right have potentially less inflation risk and more investment risk

Risk Spectrum for Lifecycle Funds


Lifecycle ChartYour plan has assigned lifecycle funds based on your date of birth

if you decide not to select individual investment options.Your Birth Date* Fund Name Target Retirement Years

Before 1942 Vanguard Target Retirement Income Fund Retired before 2007

January 1, 1943 – December 31, 1947 Vanguard Target Retirement 2010 Fund 2008 – 2012











The target date investments are designed for investors expecting to retire around the year indicated in each fund’s name. The investments are managed to gradually become more conservative over time as they approach the target date. The investment risk of each target date investment changes over time as its asset allocation changes. The investments are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the target dates.

* Dates selected by plan sponsor.


Investment Spectrum

This spectrum, with the exception of the Domestic Equity category, is based on Fidelity’s analysis of the characteristics of the general investment categories and not on the actual investment options and their holdings, which can change frequently. Investment options in the Domestic Equity category are based on the options’ Morningstar categories as of 12/31/2014. Morningstar categories are based on a fund’s style as measured by its underlying portfolio holdings over the past three years and may change at any time. These style categorizations do not represent the investment options’ objectives and do not predict the investment options’ future styles. Investment options are listed in alphabetical order within each investment category. Risk associated with the investment options can vary significantly within each particular investment category, and the relative risk of categories may change under certain economic conditions. For a more complete discussion of risk associated with the mutual fund options, please read the prospectuses before making your investment decision. The spectrum does not represent actual or implied performance.

Investment options to left have potentially more inflation risk and less investment risk

Investment options to right have potentially less inflation risk and more investment risk

Managed Income(or Stable Value)

Domestic Equities

International/Global EquityBond Specialty

MetLife Stable Value Option

DiversifiedDodge & Cox Income Fund

Loomis Sayles Core Plus Bond Fund Class N

Vanguard Total Bond Market Index Fund Admiral Shares

Inflation-ProtectedPIMCO Real Return Fund Institutional Class

High YieldT. Rowe Price High-Yield Fund

Large BlendVanguard 500 Index Fund Admiral Class

Mid BlendCRM Small/Mid Cap Value Fund Class Institutional

Large GrowthFidelity® Contrafund® - Class K

Mid GrowthDreyfus/The Boston Company Small/Mid Cap Growth Fund Class I

Fidelity International Discovery Fund Class K

Vanguard Total International Stock Index Fund Admiral Shares

Invesco Real Estate Fund R5 Class

Fidelity BrokerageLink®

Combines the convenience of your workplace savings plan with the additional flexibility of a brokerage account.

– Gives you expanded investment choices and the opportunity to more actively manage your retirement contributions.

– If you are an investor who is willing to take on the potential for more risk and you are prepared to assume the responsibility of more closely monitoring this portion of your portfolio, it could be appropriate for you.

– However, if you do not feel comfortable actively managing a portfolio beyond those offered through your plan's standard investment options, then a self-directed brokerage account may not be appropriate for you.

– Additional fees apply to a brokerage account; please refer to the fact sheet and commission schedule for a complete listing of brokerage fees.

– Remember, it is always your responsibility to ensure that the options you select are consistent with your particular situation, including your goals, time horizon, and risk tolerance.

Stay on track

Let’s explore:– Steps to get enrolled in your plan – The benefits of consolidating accounts– How Fidelity can help

Workplace Education SeriesStay on track

Make saving a priority– Enroll in your plan

– Set your savings contribution rate

– Choose your investments

– Pay down high-interest credit card debt

– Create a budget — and find ways to save more


Simplify your accounts– Keep all of your assets in one place

– Fewer statements

– Track overall performance

– Maintain investment strategy of choice

Keep in mind that fees may apply when closing and consolidating accounts.


Put all you’ve just learned to work for your futureWe will work one on one with you to provide:

– Information about your plan’s features and benefits

– Assistance with a range of services from plan enrollment to investment education as well as account consolidation

– Guidance on next steps to help you maximize your workplace savings plan and other retirement savings opportunities

– Assistance with more complex needs including, multi-goal and retirement income planning, charitable giving strategies, and investment management

Contact our Workplace Planning and Guidance Consultants for a complimentary consultation today!

Call: 800-642-7131Representatives are available from 6:30 am – 6:30 pm Mountain time

Stay on track


Visit NetBenefits®

www.netbenefits.com/atwork

Call your plan’s toll-free number 1-800-343-0860 to speak with a representative familiar with the features of your workplace savings plan

For additional information


Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, contact Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.Unless otherwise noted, transaction requests confirmed after the close of the market, normally 4 p.m. Eastern time, or on weekends or holidays, will receive the next available closing prices.

Foreign investments, especially those in emerging markets, involve greater risk and may offer greater potential returns than U.S. investments. This risk includes political and economic uncertainties of foreign countries, as well as the risk of currency fluctuation.

Investments in mid-sized companies may involve greater risks than those in larger, more well known companies, but may be less volatile than investments in smaller companies.

Investments in smaller companies may involve greater risks than those in larger, more well known companies.

Lower-quality debt securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer.

Because of their narrow focus, sector funds may be more volatile than funds that diversify across many sectors.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Company stock is neither a mutual fund nor a diversified or managed investment option.

The third party trademarks appearing herein are the property of their respective owners.

Retirement Income Planner is an educational tool.

© 2013 FMR LLC. All rights reserved.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

514947.61.1

Important Information

Documents

Getting on the Right Path with Your Workplace Savings Plan Workplace Education Series