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Tuesday, July 9th, 2013
Co-op 401(k) Plan Enrollment for
Farmer’s Cooperative
Why participate?
3
Why participate?
• Contributions are pre-tax– Amount deducted from paycheck has less
effect on take-home pay– Can reduce the overall amount you pay in
taxes on income earned today– Income not taxed until it is withdrawn
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Why participate?• Payroll deductions are convenient
– Automatically deducted from paycheck– Increase at any time via web or Benefit
Service Center– Set up automatic increases on
MillimanBenefits.com
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Why participate? • Investing pre-tax saves you money
401(k) Retirement Plan
(pretax)Regular Investment
(taxable)
Gross income $1.00 $1.00
Minus taxes -$0 -30%
Amount available to invest
$1.00 $0.70
Plus annual return +10% +10%
Balance after one year $1.10 $0.77
Are gains taxable? No Yes
Example taken from “The Power of Pretax Investing,” by David Bach.
Getting started
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Getting started
• Am I eligible? – Understand your company’s eligibility
requirements:• Age - (21 Years of Age)• Service - (1 year)• Entry date - (Monthly)
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Getting started• Contribution limits
– No more than 50% of salary– $17,500 (2013 IRS Limit)– Additional $5,500 if 50 or older (2013 IRS Limit)
• Employer Contribution– 50% of 4% match. – Profit Sharing (1000hrs/last day requirement)
(Optional)
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Getting started
• Can roll over money from: – Previous employer’s pension, profit sharing, or
savings/thrift plan– Rollover IRA– Even if you are not yet eligible to contribute to
the Plan
Roth 401(k)
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Roth 401(k)
• The Roth 401(k) is a another
retirement savings/contribution
option
• Hybrid of the Roth IRA and a 401(k)
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Roth 401(k)Roth 401(k)
Traditional 401(k)
Automatically deducted from paycheck
Yes Yes
When deducted? After-tax Pre-tax
Regular/catch-up contribution limits (2013)
$17,500/$5,500* $17,500/$5,500*
Can employers match?
Yes, treated as pre-tax money
and is taxed later
Yes, treated as pre-tax money and is taxed
later
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*Combined limit
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Roth 401(k)Roth 401(k)
Traditional 401(k)
Age at which distributions allowed without penalty
59½ 59½
Age at which you must begin distributions
After retirement or 70½
After retirement or
70½
Amount of time money must be in account
5 years No requirement
Can money be rolled over into a Roth IRA?*
Yes* No
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*Funds may not be able to be distributed until 5 years from date of rollover, unless transferred to pre-existing Roth IRA
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Is the Roth 401(k) right for you?
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• Do you believe you will be in a higher tax bracket after you retire than you are now?
• Will you be close to the income limits over which you are taxed for Social Security?
• Can you afford it?
Investing your money
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Investing your money• Your investor profile
– What is your risk tolerance?– Where does your style fall in the
range from conservative to aggressive?
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Three Tiers of InvestingInvesting
Preference:
“I’ll do it myself”
Professionally Managed Accounts
Core FundsLEAST VOLATILE MOST VOLATILERISKOMETER
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InvestMap
Professional Management
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Professional ManagementAgri-Invest – A Division of Rockbridge Investment Management
– Professionally managed accounts• Agri-Invest specializes in working with people in
agriculture • Accounts reviewed and adjusted periodically• Asset allocation based on personal demographics
– Providing objective investment management:• Since 1999• With $25 million managed assets in program• 1,000+ participants
Craig A. Buckhout,
CFA
Anthony R. Farella, CFP®,
AIF®
Patrick RoweCRPC
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Professional Management
• Objectives of the PMA– As a Registered Investment Advisor, Agri-
Invest is duty bound to act in the best interest of each participant. The two most important services include:• Objective investment decisions based on the
unique risk tolerance and goals of the participant.
• Investment strategy with diversification at the lowest cost.
Core Funds
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Core FundsAsset class Fund Ticker Stable asset fund Galliard Stable Asset N/A
Bond PIMCO Total Return Institutional PTTRX
Inflation Protected Bond Vanguard Inflation-Protected Securities Fund VAIPX
Balanced Vanguard Wellington Admiral VWENX
Large-cap value Vanguard Windsor II Admiral VWNAX
Index stock Vanguard Institutional Index VINIX
Large-cap growth MainStay Large Cap Growth I MLAIX
Mid-cap value JP Morgan Mid-Cap Value Select JMVSX
Mid-cap growth T. Rowe Price Mid-Cap Growth RPMGX
Small-cap value Allianz NFJ Small Cap Value Fund PSVIX
Small-cap index Vanguard Small-Cap Index Signal VSISX
Small-cap growth Vanguard Explorer Admiral VEXRX
Intnat’l large-cap value Dodge & Cox International Stock DODFX
Intnat’l large-cap blend Vanguard Internat’l Growth Admiral VWILX
Intnat’l large-cap growth Artisan International Fund ARTIX
InvestMap
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InvestMap
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• What is InvestMap?– age-appropriate investment allocation
approach• Uses the Plan’s underlying funds
– Automatically becomes more conservative as you near retirement age.
– Agri-Invest has constructed 5 different allocations to allow personalization in retirement strategy.
Keeping track of your account
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Keeping track of your account• Three ways to access account
information and initiate transactions1 www.millimanbenefits.com
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Keeping track of your account• Three ways to access account
information and initiate transactions:
8887 0 8 6 9 8 8
2 Benefits Service Center
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Keeping track of your account• Three ways to access account
information and initiate transactions:
Mobile App for iPhone and AndroidView account asset allocation and deferral only
3
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Keeping track of your account• Account statements
• For each investment fund:– Balance at beginning of quarter– Contributions– Investment earnings– Distributions– Balance at end of quarter– Percent of total account
balance– Personal rate of return
PlanAhead for Retirement
Tools to assist participants
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www.millimanbenefits.comPlanAhead for RetirementTM
Withdrawing money
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Withdrawing your money• When you leave your company
– If more than $1,000, can leave it in the account until age 70½
– Lump sum distribution– Roll money over into another retirement
account– Partial distribution– Combination of distribution and rollover– Recurring payments– Taxes and penalties may apply
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Withdrawing your money• Vesting
– Your contributions always fully vested
• Company Contribution– 6 year vesting on employer match– 6 year vesting on optional profit sharing
Thank you!