The Pentegra Millennial SmartPath

Views:
 
     
 

Presentation Description

The Pentegra Millennial SmartPath™ provides valuable information to help you master the financial strategies you should look to adopt at this point in your life, and help you on the path to greater financial wellness and retirement readiness. Know more at https://www.pentegra.com

Comments

Presentation Transcript

slide 1:

The Pentegra Millennial SMARTPATH TM The Path to Greater Financial Wellness

slide 3:

The early years of your working career are full of frsts and are busy years entering the workforce buying a home raising a family advancing your career. There’s a lot going on and you’re probably trying to juggle many things—including money. There are many fnancial goals that are likely on your plate right now: paying off college loans saving for long term goals including retirement and keeping debt under control. As the frst true “post-pension” generation millennials must save enough for retirement largely on their own. This can be challenging for a generation saddled with record levels of student loans. But millennials are rising to the challenge. In fact despite the stereotypes some studies show that millennial money habits are just as good—or better—than those of other generations. According to a recent J.D. Power study nearly two thirds of millennials say they have saved 25000 for retirement. The survey also found that 51 percent of millennials have set retirement goals 1 and 63 percent are actively saving money. 2 The Pentegra Millennial SmartPath™ provides valuable information to help you master the fnancial strategies you should look to adopt at this point in your life and help you on the path to greater fnancial wellness and retirement readiness. 1 J.D. Power 2018 Group Retirement Satisfaction Study 2 2018 “Better Money Habits Millennial Report” Bank of America The Pentegra Millennial SmartPath™

slide 4:

2 PENTEGRA Hey Millennials — Retirement Matters When you are in your twenties and just starting out in your career saving for retirement might not seem that important. It can be hard to save for retirement when you have so many other demands on your money. One of the top stressors for millennials is falling short on savings whether it is not saving enough repaying student loans spending more than they should or not planning and saving for retirement. 3 But did you know that getting a head start on saving while you’re young could have a signifcant impact on your future fnancial security Y ou hear a lot about the tax benefts of saving in a qualifed retirement plan. But did you know that every time you contribute pretax money to your plan you’re potentially saving twice First you’re putting money away for retirement. Second you’re paying less in current income taxes. Although competing fnancial priorities—such as paying off student loans—may make it diffcult to maximize your retirement savings right away contribute as much as you can afford. Be sure to set your contributions at a high enough level to qualify for the maximum in matching funds or you will be leaving free money on the table. And while experts recommend annual contributions of between 10 and 15 of pretax pay even small sums have the potential to grow over time. One of the biggest advantages of your retirement plan is that it puts saving on autopilot—making it easy to save and invest—and does it in a way that offers potential tax benefts. Research has shown that automatic features such as auto-enrollment and auto-escalation have better positioned millennials in terms of retirement readiness than other generations. 3 2018 BetterMoney Habits Millennial Report” Bank of America 4 Benefts Pro “Millennials Reap Benefts of Pension Protection Act” July 17. 2018 5 Benefts Pro “Millennials Reap Benefts of Pension Protection Act” July 17. 2018 Four in T en millennials surveyed were automatically enrolled in a defned contribution plan compared to 38 of Gen Xers and 33 of Baby Boomers 4 . Millennials are on track to replace 75 of their working income in retirement a higher replacement rate than older workers 5 .

slide 5:

Getting a head start on saving while you’re young could have a signifcant impact on your future fnancial security.

slide 6:

4 PENTEGRA Put Time on Your Side with the Power of Compounding Saving for retirement while you’re in your twenties and thirties gives your savings more time to beneft from potential compounding. Compounding occurs when investments generate earnings and the reinvested earnings generate additional earnings. The longer the compounding process has to repeat itself the larger your account balance may be at retirement. Fast forward to your future. T wo coworkers Michael and Mitchell are attending a retirement party in their honor. With almost 803000 in personal savings and investments Michael is confdent he can afford a comfortable retirement. Mitchell has about 271000 — approximately one third that amount — and has already scaled back his plans because he worries that his nest egg won’t be enough to last throughout his retirement years. Penny pincher Compared to Mitchell it looks as though Michael really pinched pennies. But that’s not the case. Over the years Michael and Mitchell saved the same amount of their pay—110400 each. Fabulous investor Then you say Michael must have earned better investment returns than Mitchell. Again not so. Their investments both earned average annual total returns of 8 compounded monthly. Why the difference In a word—time. By starting to save earlier than Mitchell Michael used the power of compounding to his advantage. What they did. When Michael was 25 he began a program of saving 230 a month. He didn’t withdraw money from his retirement fund for cars home repairs or his daughter’s summer camp expenses. He just kept putting 230 a month into his fund every year for 40 years. Mitchell waited until he was 45 to begin saving. He socked away 460 a month for 20 years never missing a contribution or withdrawing money from his account. Despite his efforts Mitchell never caught up to Michael. 1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 Michael Mitchell 803000 271000 110400 110400

slide 7:

Use the power of compounding to your advantage.

slide 8:

6 PENTEGRA Finding Extra Dollars T o Save and Invest Where can you fnd extra dollars to put toward your savings and investments While it might not be as easy as digging through your pockets for misplaced cash you may be able to come up with additional money to invest just by making a few simple changes to your spending habits. The simple truth is that coffee and bagel on your way to work every morning and lunch at the sandwich shop may cost more than you realize. Everyday items may cost only a few dollars but when those same dollars are put toward retirement savings and invested they really can add up. The 16000 Cup of Coffee By saving just a few extra dollars every week you could signifcantly increase your retirement savings. Saving just 4 weekly or the cost of a cup of gourmet coffee over the course of 25 years can boost your retirement savings by 16608. Saving these few extra dollars is easy when you think of it in these terms. Could you set aside an extra few dollars each week If so here’s some motivation to actually do it: Buying lunch once a week 10/week – 520 a year 41519 boost in savings Movies once a month 15/month – 180 a year 14360 boost in savings Gourmet coffee once a week 4/week – 208 a year 16608 boost in savings Take out for dinner once a week 30/week – 1560 a year 124469 boost in savings Hypothetical examples of savings are based on contributions made to a tax-deferred retirement account earning an 8 annual rate of return compounded at the same rate as contributions over a 25-year period. Y our own investment returns may earn more or less than this example.

slide 9:

By saving just a few extra dollars every week you could signifcantly increase your retirement savings.

slide 10:

8 PENTEGRA Debt Can Hold You Back High monthly debt payments can dead-end your cash fow and prevent you from saving as much as you should toward your goals. And carrying too much debt can lower your credit score which can affect your ability to get a job buy affordable insurance or qualify for low mortgage or car loan rates. Are You Spending Beyond Your Means Y our debt-to-income ratio is one measure that can tell you if you are spending beyond your means. Calculating the ratio yourself can give you a snapshot of your fnancial health. Get Started The frst step is to add up all your monthly payments—housing costs either your rent or your mortgage insurance property taxes association fees etc. credit card payments car loans student loans and any other fxed obligations. The next step is to fgure out your monthly income from all sources. Include your gross before tax pay investment income bonuses self-employment income and any other income you regularly receive. Do the Math Calculate the ratio by dividing your total monthly debt payments by your monthly gross income to fnd what percentage of your money is going out to pay current debts. Multiply by 100 to get your ratio as a percentage. Most lenders consider a debt-to-income ratio of no more than 36 to be desirable for mortgage loan purposes housing-related expenses should not exceed 28. But the lower the ratio the better. OWN IT If you’re feeling overwhelmed by consumer debt there’s no time like the present to start tackling it. These strategies can help. Develop a spending plan. Small changes in spending habits can lead to signifcant savings over time. Downscale your life. Consider downsizing and cutting back on expensive vacations and frequent dinners out and think twice before buying expensive items. Use cash. Paying with cash straight out of your wallet may make you stop and reconsider unnecessary purchases. Pay more than the minimum. Making only minimum payments on credit cards could signifcantly increase the amount you’ll eventually pay. Have a plan to pay off your balances one by one. Pay your bills on time. Late payments may result in fees and a lower credit score.

slide 11:

Debt can prevent you from saving as much as you should.

slide 12:

10 PENTEGRA Don’t Push the Pause Button With a retirement savings plan you’re in control of your fnancial future. Y ou can fast-forward by making extra contributions to your plan account. Or you can reduce—or even stop—your contributions if you want to. The power to pause your contributions is meant to be a safety valve. It’s there in case you ever have a serious need. Y ou might be tempted to cut back on your contributions for other reasons however. Maybe you’d like to be taking home more money. Perhaps you’re upset by disappointing investment results. But before you make any changes think about this: Pausing your contributions can be very expensive in the long term. This is a hypothetical example that assumes contributions are made monthly and investments earn a 6 average annual total return compounded monthly. Y our contributions investment returns and balances will be different. Juan Jane Years Annual Contributions 1-40 1-5 6-10 11-40 2000 2000 None 2333 Plan Account Balance At Year 40 Juan Jane 331922 289783 Both Juan and Jane Contributed a T otal of 80000 THE COST OF INTERRUPTING YOUR SAVINGS Juan and Jane contributed the same total amount. Both Juan and Jane contributed a total of 80000. But Juan retired with 62971 more because he never pushed the pause button on saving.

slide 13:

Pausing your contributions can be very expensive in the long term.

slide 14:

12 PENTEGRA What Happens When You Switch Jobs As you build your career you may be job hopping–and not always by choice. The gig economy is here to stay. In fact millennials expect to have eight or more jobs in their lifetime. What happens to the money in your retirement plan account when you switch jobs is up to you. T ypically one of your options may be to take your savings in a single sum. Sounds like a windfall right Wrong. Here’s why you should think long and hard about cashing out your retirement savings. More Now Less Later Y ou might like the idea of having some extra cash to pay bills buy a car or do something else. But remember this: Spending money you’ve earmarked for retirement before you retire will eventually mean less income after you retire. Will you be able to rebuild your account balance Even if it’s still early in your career taking a distribution paying the taxes and any penalty that applies and spending what’s left could make it harder to reach your retirement savings goals. Even if your balance is relatively small the impact could be signifcant. T ake a look at the chart to see what the “cost” of withdrawing just 8000 at age 30 might be by the time a person reaches age 65. Don’t Forget Taxes Using your retirement money early can also have an immediate—and potentially substantial—tax cost. Before you withdraw your account make sure you understand how a cash-out works. Since the money in your retirement savings account generally has not been taxed you’ll have to include the distribution in your income on your federal and possibly state income tax return. Additional income means you’ll owe additional federal and possibly state income tax. The retirement plan is required to withhold 20 to send to the IRS as a “down payment” of sorts on your overall federal income-tax liability for the year. And the fnal surprise: Y ou may also owe a 10 early withdrawal penalty depending on your age. Retirement Account Balance 8000 8000 at Age 30 Withdrawal 8000 0 at Age 30 Contributions Age 30-65 100 per month 100 per month Balance at Age 65 142471 207459 Cost of withddrawing 8000-64988 Assumes 6 average annual total investment return. Money will be taxed upon withdrawal. This is a hypothetical example with investment returns compounded monthly. Your investment returns and contributions will be different. The Cost of An Early Withdrawal

slide 15:

13600 4400 2000 SOME FOR YOU SOME FOR THE IRS Think long and hard about cashing out your retirement savings. Here’s what cashing out a 20000 retirement plan account might look like. n 22 federal taxes n 10 early withdrawal penalty n Cash remaining This hypothetical example is for illustrative purposes only and assumes a federal income tax rate of 22. Y our tax rate may be different and you may be eligible for an exception to the 10 penalty for early withdrawals. Cash Remaining Federal Taxes Early Withdrawl Penalty

slide 16:

14 PENTEGRA The Beneft Of Keeping Your Savings Tax Deferred Ima Saver and her friend Al Spendit both had 15000 in their retirement accounts when they changed jobs. Ima rolled over her balance into her new employer’s plan and contributed 200 a month for the next 25 years. Al cashed out and started over. He also joined his new employer’s plan and like Ima contributed 200 a month for 25 years. However his account balance never caught up. Even though they contributed the same amount and had identical earnings Ima’s account balance was signifcantly more than Al’s because she kept her savings going. How Does a Rollover Work When you choose to “roll over” your retirement money into your new employer’s retirement plan or an individual retirement account IRA the plan administrator will move the money in a trust-to-trust transfer for you and you’ll avoid tax problems. Since the distribution isn’t paid to you no income taxes are due and no penalty applies. If you take the money in a check your plan must withhold 20 to pay federal income taxes even if you intend to complete the rollover yourself. Y ou’ll have to replace the missing 20 to accomplish a tax-free rollover of 100 of your funds. 205573 138599 Ima Saver’s account balance Al Spendit’s account balance This hypothetical example is for illustrative purposes only. It assumes a monthly contribution of 200 and an average annual return of 6 compounded monthly. It does not represent any specifc investment product offered by your plan and does not include any investment fees and expenses. Y our investment returns will differ and it is unlikely that your contribution amount will remain the same over a long period. Pretax contributions and related plan earnings will be subject to ordinary income taxes and a possible early withdrawal penalty upon distribution.

slide 17:

Keep your savings going.

slide 18:

Retirement: Your First Priority Saving as much as possible in an employer’s tax-favored retirement plan or an individual retirement account IRA can potentially help you accumulate a healthy nest egg. Generally assets in IRAs 401ks and similar plans won’t be included in the calculation of your expected family contribution to education costs. And if you need cash for college you’ll be able to withdraw money from your IRA without penalty to pay qualifed higher education expenses although income taxes may apply. Next: By starting to save for college while your child is young you may be able to amass substantial assets. Section 529 college savings plans allow savings to accumulate tax deferred and distributions to pay qualifed higher education expenses at an eligible institution are tax free. Plans are set up to beneft a designated benefciary but if that child doesn’t use the funds the benefciary can be changed to another family member without tax consequences. Funds in 529 plans typically are treated as parents’ assets for fnancial aid purposes. College and Retirement: Making It Work When you created your fnancial plan you may have put some money aside for a new baby’s future college expenses. And you probably started saving for retirement in your employer’s tax-deferred plan. But chances are good that your more immediate goals were the ones on your mind. Then your kids started kindergarten and suddenly you realized college wasn’t so far off after all. In fact 27 of millennials are already saving for their kids’ education 6 . But how can you possibly save for both goals at the same time Get Your Priorities in Order It’s not easy to save for your retirement at the same time you’re saving for a child’s college education. So you might be tempted to put saving for retirement on the back burner and concentrate your efforts on building a college fund. But before you cut back on your contributions to your retirement account keep these two important facts in mind: • Y ou’ll probably need more money for your retirement than for any other goal you have. • While your child can borrow money to pay for college you can’t borrow money to fund your retirement. 16 PENTEGRA 6 2018 “Better Money Habits Millennial Report” Bank of America.

slide 19:

Plan to save for both goals.

slide 20:

18 PENTEGRA Get on the Same Page When It Comes to Investments It’s not uncommon for couples to own multiple investment accounts—individual retirement accounts IRAs or employer-provided retirement accounts such as 401ks. Some couples share investment duties equally while other couples may agree that one individual in the relationship takes on the more active role in buying and selling investments. But what happens when couples disagree when it comes to choosing investments Or can’t agree on what percentage of their salaries they should set aside for long-term goals Or can’t even get on the same page about the whole issue of money and spending Millennial couples are more likely than other generations to keep their fnances separate. In fact fnances are the top source of tension in millennial households 7 . Identify Different Saving Priorities Y ou will have to fnd some common ground if one of you wants to invest every extra dollar when the other wants to spend it. While fnancial security is important it shouldn’t be at the expense of an enjoyable interesting life. Why not choose a realistic amount to invest toward your goals and then set aside another amount to spend on yourselves Coming to an agreement that considers one person’s desire for fnancial security without leaving the other partner feeling deprived can satisfy both the saver and the spender. 7 2018 “Better Money Habits Millennial Report” Bank of America CONSIDER THE ISSUE OF RISK It’s not just different attitudes toward money that create problems for couples. Y ou and your partner might have very different feelings about how much investment risk you are willing to take in pursuit of gains. What happens if each of you are at different ends of the risk scale One of you might be an aggressive investor that seeks assets with the potential for earning higher returns over the long term such as stocks. The other could be a conservative investor whose focus is on preserving principal and would prefer fxed-income and cash investments even if it means earning returns that don’t keep pace with infation. The immediate issue is to come up with an investment plan that satisfes both of you. A good start would be to meet your fnancial professional and ask for help in working out an investment strategy that allows for growth while addressing volatility. Having someone who is objective and can offer useful suggestions might help you reach a compromise.

slide 21:

Planning ahead can help you save enough money to reach all of your important goals.

slide 22:

20 PENTEGRA Understanding Investments There are two broad categories of retirement plan investments—passive and actively managed. Passive funds also called index funds attempt to replicate the performance of a broad market—or a market segment—by buying the same securities that make up a market index. With an actively managed fund the fund’s managers actively direct the portfolio in an attempt to outperform market benchmarks. Both passive and actively managed funds invest in the three main categories of investments—stocks bonds and fixed income funds. Stock Funds Stock funds invest in shares of stock in companies. A stock fund’s risk and return will depend on the types of stocks it purchases. • Large-capitalization funds hold stocks of large well-known companies. They offer the potential for long-term capital appreciation. • Mid-capitalization funds hold stocks of medium-sized companies. Like large-capitalization funds they offer the potential for long-term growth. • Small-capitalization funds generally own shares in companies in the early stages of their growth whose shares could rise or fall in value significantly. Stock funds also may follow a growth or value strategy. Growth stocks are stocks of companies thought to be capable of higher than average earnings growth. Value stocks are considered to be “bargain priced” since they are priced lower than stocks of similar companies in the same industry. The premise behind value investing is that the stocks may realize their potential down the road. What kind of investor should consider stocks Stocks offer the highest potential investment returns over time but also involve the most amount of risk to your principal. Stocks may be a good option if you are investing for the long term may not need your money for at least several years and are comfortable with the natural investment risk inherent in stocks.

slide 23:

What types of investments best suit your needs Bond Funds Bond funds invest in bonds and other interest-earning securities issued by governments and corporations. Some bond funds hold only U.S. government bonds while others specialize in municipal securities or corporate bonds. Other funds hold a combination of government and corporate securities. Bonds are sold to raise money—to build factories or bridges or to expand public services. Bonds promise to pay fixed interest payments and at the end of the loan called the bond’s maturity to pay the original investment principal. Bond maturities generally range from 1 year to 30 years. In general the longer the maturity the higher the interest payments the market will pay more for a longer-term loan. Conversely the longer the maturity the greater the risk as bonds are interest rate sensitive. As interest rates rise and fall the value of a bond rises and falls in the opposite direction. Fixed Income Funds Fixed Income investments are designed to protect the value of your money over short periods of time. These types of investments generally present a low risk of losing principal. Fixed income funds include money market investments as well as stable value funds. Money market funds invest in short-term securities issued by banks corporations and the U.S. Government and its agencies. Because these monies are held for shorter periods of time the return is generally lower. What type of investor should consider bonds During periods of stock market volatility bonds may provide some stability since they often increase in value when stock values fall. A portfolio that includes funds holding intermediate- or long-term bonds commonly has the potential to earn returns that are greater than the rate of inflation. As with any investment however bond investors face various risks. Bond prices often fluctuate due to interest rate changes. Bonds may be a good option for investors willing to accept moderate risk who may not need their money for at least several years. What type of investor should consider fixed income investments Many investors choose short-term funds for their relatively high degree of safety—but there is a price for this safety the risk of not keeping up with inflation.

slide 24:

22 PENTEGRA Choosing Investments Deciding on an appropriate asset allocation is a matter of balancing the potential for earnings and investment risk. There is no single ideal asset allocation. The mix that’s right for you won’t be the same as the one that suits your co-worker or your best friend. T o find an asset allocation that’s right for you look at three key things: your investing time horizon your risk tolerance and your overall financial goals. Measuring Time Horizon Determining your investing time horizon is straightforward—it’s the amount of time you have left to invest before you’ll need your money. If you have lots of time before you intend to retire you might want to make the most of those years by building up your savings. Y ou may be more comfortable investing a portion of your account in stocks because you’ll likely have time for your investments to recover from any downturns. Measuring Risk T olerance Deciding how much to allocate to the various asset classes also depends on your risk tolerance. One aspect of your risk tolerance is your attitude—how you feel about taking risk. If the potential for higher returns far outweighs the risk of losing money you may be inclined to invest heavily in stocks. But that’s only part of the picture. Y ou may feel comfortable with a high level of investment risk but there are other factors to consider. For instance if your spouse’s job situation is tenuous it may be wise to reduce your risk exposure until things are more settled financially. Ask yourself how much you’re willing to lose in a year. Any time investment losses would leave your financial situation in jeopardy your capacity to take risk is reduced.

slide 25:

Consider your time horizon and risk tolerance. Average Annual Returns January 1978 - December 2018 4.6 7.1 11.2 6.3 8.7 10.1

slide 26:

A Lesson in Losses Sometimes investments don’t just underperform they fall into negative territory but price fluctuations are part of long-term investing. Keep in mind that you don’t have an actual loss until you sell an investment for less than you paid for it. Until then a loss that appears on your retirement plan statement is a “paper loss. ” If you sell an investment that has lost value not only do you lock in the loss you also could miss out on significant gains if that investment recovers. Y ou may intend to jump back into the market in time to catch the rebound but it’s extremely difficult to get the timing right. Changes can occur very quickly. By the time you realize the market is recovering it may be too late. Look at the Long T erm Market downturns are inevitable. But when you’re investing for something that is years in the future you probably have time to ride them out. The best strategy is to choose investments that fit your time frame goals and risk tolerance and then keep your eye on them. If a paper loss does crop up the best course of action might be to do nothing and just give your portfolio some time. The chart below illustrates how much of a difference it can make if you miss out on months with strong performance. It compares the results of being invested in stocks all year with being invested for all but the month with the highest return. 24 PENTEGRA Average Annual Excluding Year T otal Return the Best Month 2012 2013 2014 2015 2016 2017 16.00 32.39 13.69 1.38 11.97 21.83 11.03 25.87 8.72 -6.50 4.85 17.18 As measured the SP 500 an index of the stocks of 500 major U.S. corporations. It is not possible to invest directly in an index. Index performance does not reflect the effects of investing costs and taxes. Actual results would vary from benchmarks and would likely have been lower. Past performance is not a guarantee of future results MISSING THE BIGGEST MONTH MAKES A BIG DIFFERENCE

slide 27:

Price fuctuations are part of long-term investing.

slide 28:

26 PENTEGRA Dollar-Cost Averaging—Taking the Guesswork Out of Investing What will the stock market do today Soar to new heights plunge to new lows or settle somewhere in between Ever since the beginning of stock trading investors have looked for signs to indicate when stock prices will rise or fall. But so far no one has come up with a foolproof method for consistently predicting market upswings or downturns. Some investors use a “market timing” strategy by buying shares when they think stock prices are at their lowest and selling their investments when they believe the market has reached its peak. Although they may be successful some of the time few investors can repeatedly time their buy-sell decisions to correspond with market movements. If you sell your investments when values start dropping and don’t get back in the market soon enough when prices start to rise again you could miss out on signifcant gains. Instead of trying to guess what the securities markets are going to do you may want to consider using an investment strategy known as “dollar-cost averaging.” With dollar-cost averaging you invest a fxed amount of money in the same investment or investment type at regular intervals. Y our money buys more shares when prices are low and fewer shares when prices are high. Although there are no guarantees your average cost per share may be less than the average share price for the same period with this method. Investing in your retirement plan is a way to take advantage of dollar-cost averaging. Dollar-cost averaging won’t completely protect your portfolio from a loss if the market takes a plunge. But it may help reduce any losses and leave you in a good position to beneft from a recovery since you’ll still be fully invested.

slide 29:

Take the guesswork out of investing.

slide 30:

28 PENTEGRA Learn from These Common Investing Mistakes Selling in a Panic When investment values decline signifcantly it’s natural to feel concern. But selling in a panic can turn paper losses into real losses. Instead investors who won’t need their retirement savings for many years might consider sticking with their long-term plan and giving their portfolio time to recover. Investing T oo Conservatively Fear of losses sometimes causes participants to invest so conservatively that they risk not earning suffcient returns to stay ahead of infation. Although they can be volatile including at least some growth-oriented investments such as stocks in an investment mix may help participants meet their goals. Forgetting to Rebalance “ Asset allocation” refers to how a portfolio is split among the major asset classes—stocks bonds and cash investments. Over time performance differences can cause a portfolio’s asset allocation—and its risk exposure—to change. By rebalancing investments periodically participants can maintain their long-term investment strategy.

slide 31:

Stick with your long-term strategy.

slide 32:

30 PENTEGRA Sound Strategies for Everyone Although everyone’s attitude toward investing and money is different most investors share some common situations throughout their lives. The following are some major life events that most of us share and some investment decisions that you may want to consider: When you get your frst “real” job: • Start a savings account to build a cash reserve. • Start a retirement fund and make regular monthly contributions no matter how small. When you get a raise: • Increase your contribution to your company-sponsored retirement plan. • Invest after-tax dollars in municipal bonds that offer tax-exempt interest. • Increase your cash reserves. When you get married: • Determine your new investment contributions and allocations taking into account your combined income and expenses. When you want to buy your frst house: • Invest some of your non-retirement savings in a short-term investment specifcally for funding your down payment closing and moving costs. When you have a child: • Increase your cash reserves. • Increase your life insurance. • Start a college fund. When you change jobs: • Review your investment strategy and asset allocation to accommodate a new salary and a different benefts package. • Consider your options for your account in your company’s retirement savings or pension plan. Y ou may be able to either keep the money in your old plan transfer it to your new employer’s plan take a cash distribution or roll the money over to an individual retirement account IRA. When all your children have moved out of the house: • Boost your retirement savings contributions. When you reach 55: • Review your retirement fund asset allocation to accommodate the shorter time frame for your investments. • Continue saving for retirement.

slide 33:

When you retire: Carefully study the options you may have for taking money from your company retirement plan. Discuss your alternatives with your fnancial advisor. Review your combined potential income after retirement and reallocate your investments to provide the income you need while still providing for some growth in capital to help beat infation and fund your later years. Discipline and a fnancial advisor can help. Establishing a relationship with a trusted fnancial advisor can go a long way toward helping you practice smart money management over your entire lifetime. Schedule annual reviews with your fnancial advisor.

slide 34:

We hope the Pentegra Millennial SmartPath™ helps put you on the path to fnancial wellness. For more information visit us at www.pentegra.com. Follow our conversation

slide 36:

2 Enterprise Drive Suite 408 Shelton CT 06484-4694 800 •872 •3473 tel 203 •925 •0674 fax www.pentegra.com © 2019 Pentegra All Rights Reserved

authorStream Live Help