a step by step guide . . . . . . . . . . . . . . . . . . . . . 2 Bull and Bear Market

Transcripción

GuidancePlus: a step by step guide. . . . . . . . . . . . . . . . . . . . . . 2
Bull and Bear Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Distribution Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Go The Distance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Instructions to Complete the
Enrollment/Change Election Form . . . . . . . . . . . . . . . . . . . . . 15
Mutual Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Your Investment Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mercados Alcistas (bull) y Bajistas (bear) . . . . . . . . . . . . . . . 20
Terminos y Explicaciones de Distribucion . . . . . . . . . . . . . . 21
Ir a la Distancia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Fondos Mutuos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Figuracion de Inversion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1
GuidancePlus
a step by step guide
Dreaming about retirement is fun... Living in retirement can be fun, too —
if you’ve done some planning.
MasteryPOINT GuidancePlus (GP) helps you with that planning — right from the comfort of your home.
You know that you rarely get something for nothing. That’s true of retirement, too. Maybe you’re one
of the lucky few with no concerns about your retirement nances. But, if you’re like most of us, you’ve
got more than a few questions.
GuidancePlus can provide you with some answers. The only cost is some time...and you won’t have to
spend a whole lot of that.
Getting Started
Step 1
Log in to MasteryPOINT GuidancePlus (GP) using the
instructions provided.
When you log in, GP secures certain information
from your retirement plan account, so you don’t
have to enter it.
Once you’ve logged in, you may want to see
results without providing much information.
Clicking the First Look icon allows you to do
that by taking you directly to your Action Plan
in Step 7. The plus side of First Look is that it’s
quick. The minus side is that it relies on a bunch
of assumptions that may or may not be correct.
If you’d rather have a more hands-on approach
to your planning, click the “Next” button.
You’ll have to provide some information about
yourself on subsequent screens. Having a
recent paycheck handy will help.
GuidancePlus-0312 CPI
First Look icon
Step 2
Answer the Getting Started questions.
You’ll see that we’ve provided default answers
to these questions already, so you can breeze
by them if you want. If you want to include
more information about your spouse, other
retirement or household accounts, pensions,
expected income, or expense items, indicate
that here. We’ll ask you more about those
things later.
Step 3
Provide your basic personal information.
We use your age and current salary to project
the income you’ll need at retirement and how
much you may be able to save between now
and then.
Step 4
Check your current investments.
We get your account balances directly from
your plan recordkeeper. If you indicated you
had assets outside your plan, you can click the
“Add Other Investments” button to detail those
investments.
NOTE: If you’ve indicated that you want to add other
information for you, your spouse, or your signicant
other, you’ll be prompted to do so here.
Participant Service Center: 800.279.4015 ext. 206 | Website: www.MyRetirementFuture.com®
Step 5
Conrm your goals and assumptions.
The key question here is the amount of
replacement income you’d like to have.
“Replacement income” is the percentage of
your current income you think you’ll need at
retirement. Advisors recommend between
70% and 85% of your current income.
First Look assumes 80%.
Step 6
Conrm your risk tolerance.
First Look assumes you’re a moderate investor
(i.e., a “50” on a scale of 1 to 100). You can
conrm that assumption by clicking on “Risk
Advisor” and answering a series of questions.
Or you can leave well enough alone for the
moment and come back to the Risk Advisor
later.
?
Note the “?” icon next to some of the questions.
Place your cursor over the icon to get help with
your answer.
Step 7
Review your Action Plan.
Ready for some guidance? Here it is. Whether
you’ve gotten here via the First Look shortcut
or taken the long way, the Action Plan tells
you if you’re likely to meet your goals — and
suggests what steps you should consider if
you’re not.
Action Plan
Step 8
Have some fun.
Step 9
Implement your strategy.
You can, of course, accept the retirement
Based on the information you’ve provided,
strategy as proposed. But just for the heck of
MasteryPOINT GP tells you where you should
it, select the “Custom” option and bring up the
invest your retirement plan resources. Before
Custom Strategy screen. You can adjust in one
you take this step, however, you may want
place the four factors that will most affect your
to provide GP with additional information.
retirement nances: your retirement age; your
(Remember that First Look is intended to
replacement income assumption; your plan
provide a quick overview of your situation. If
contribution level; and your risk tolerance.
you want a more in-depth analysis, take the
time to walk through GP from the beginning.)
Custom Strategy
Education — MasteryPOINT GP includes
Other Features — Include additional portfolios
a wealth of information on investing and
in your planning; factor in extraordinary income
retirement planning. If you need additional info,
and expense items; include your spouse’s or
select the “Education” option on the toolbar
signicant other’s resources and you’ll achieve
and scroll down to the subject you’re interested
more complete results.
in. We suggest, however, that you start at the
beginning and get the full picture. Estimated
Additional Tools — MasteryPOINT GP offers
time: 15 minutes.
a number of valuable tools to assist in your
nancial and retirement planning. Check the
Sophisticated Planning — Remember the
impact of your plan loans with the plan loan
Getting Started page? The default answers
calculator. Weigh your distribution options with
were mostly “No.” Answer “Yes” to those
the distribution planner. Determine the impact
questions, and MasteryPOINT GP becomes a
of saving for your children’s college educations.
much more sophisticated planning tool.
These tools — and more — are available under
the “Calculator” option.
Bull and Bear Markets
Running with the Bull
There is an old adage that states, “Those who fail to plan, plan to fail.”
A Bear Market
A bear market is a market where stocks are expected to go down; a long-term downward trend lasting
months to years.
A bear market can be dened as a decline of at least 15% in each of three important stock averages:
S
The Dow Jones Industrials
S
The S&P 500 Index
S
The Value Line Index*
A Bull Market
Bull markets refer to a rising of the market where the prices of stocks are expected to go up; a long-term
upward trend that can last months to years where stocks often post substantial gains coming out of a bear
market and the biggest percentage increases happen early in the rebound. The rebound usually does not
correspond with an upturn in the economy, but often precedes it. And it is fairly easy to spot … about three
months after it happens.
Strategy
Your best strategy is to stay invested during downturns. By staying invested, you do not miss the bottom of
the market or the subsequent gains on the upside. It is difcult to watch the value of your portfolio drop in a
bear market, but study after study has shown that staying invested with a well-balanced portfolio is the best
strategy.
The rst key to successful investing is to have a well-thought-out plan. Your plan should include several factors.
S
Understanding the nature
of the risks involved in
investing.
S
Accepting the inevitability
of a bear market and
planning for down trends in
your investment plan.
*World Wide Web/Website Walker, Jeff, LowRisk.com, 3-13-2009 http://www.lowrisk.com/bullbear.htm
201089-0312 CPI
S
And nally, having the
discipline to stay the
course even when the
road ahead seems painful.
Distribution Terms and Explanations
Effective distribution procedures are an important part of a successful qualified retirement
plan. CPI’s distribution process was designed to provide a participant’s distribution quickly,
while still meeting Internal Revenue Service and Department of Labor requirements.
Following are common terms specic to the
If the distribution is to be directly deposited to a
distribution process that are good to know
checking or savings account, the Direct Deposit
and understand.
box must be completed.
Payment Options
Distributions
The participant or Beneciary selects the form
Termination or nal payout
of payment. They may elect to have the account
distributed in the following ways: all paid in cash,
A distribution paid to a participant (or beneciary)
all paid as a direct rollover, a portion paid in cash
when service with the current employer has
and the remainder paid as a direct rollover.
ceased due to death, disability or termination of
employment.
All cash distributions (other than hardship
distributions) are subject to 20% federal income
In-Service Distribution
tax withholding. However, if any portion of the
distribution is to be paid in cash over a period of
A distribution paid to a participant who is still
10 years or more, the participant has the option
employed; usually at age 59 ½ when available.
to elect no federal income tax withholding on that
The in-service distribution option must be
portion. Otherwise, a withholding rate of 10%
included in the plan’s document.
applies to that portion of the distribution. The
participant may also have the option to elect no
state withholding, if applicable.
If the distribution is to be directly rolled over,
the participant or Beneciary must complete the
Direct Rollover box on the CPI Distribution Options
form and provide information on the name of the
institution holding the IRA or the name of the
eligible retirement plan receiving the distribution.
201087-0312 CPI
Required Minimum Distribution (RMD)
A mandatory distribution paid to the participant
beginning at age 70 ½. The RMD amount is
calculated based on the life expectancy of the
participant and his account balance as of a
certain date.
Loan
Beneciary Distribution
An amount the participant borrows from the plan
A distribution from the plan to the named
that must be repaid. Most plans provide for a
beneciary of a deceased participant.
minimum loan amount of $1,000. The maximum
loan amount is the lesser of one-half of the
Qualied Domestic Relations Order (QDRO)
participant’s vested account balance or $50,000
within a 12-month period. A reasonable interest
A QDRO is an order issued by a court of law in
rate must apply to the loan. A promissory note
conjunction with a divorce settlement. The QDRO
and amortization schedule are prepared for the
describes how the retirement account is to be
repayment of the loan.
divided between the the participant and his or
her ex-spouse.
Statutory Hardship Distribution
This type of distribution has certain criteria that
must be met under law. Reasons for a hardship
distribution include:
S
Purchase a house (primary residence)
S
Secondary education expenses
S
Certain medical expenses
S
Prevent eviction from or foreclosure
on your home
S
Burial or funeral expenses
S
Repair damage to your home
Only the participant’s deferrals can be used for
hardship distributions (no earnings). Once a
hardship distribution is taken, the participant is
not allowed to make deferral contributions to the
plan for six months.
Glossary of General Retirement Plan Terms
Each industry has its own language; the retirement plan industry is no different. Here are some
definitions that will have you speaking fluid “retirement plan” in no time at all!
Allocation
Fund Fact Sheet
Dividing your contributions among the major asset
A brief summary of information regarding the
categories to reduce risk in your portfolio.
Catch-up
A provision that is found in some retirement plans
holdings, style, and returns of a particular mutual
fund or other investment.
Equity
that allows eligible employees who are age 50 or
A stock or any other security representing an
older to make an additional annual contribution.
ownership interest.1
Contribution
Rate of Return
For retirement plan purposes, an amount of
The gain or loss on an investment over a specied
money designated for deposit to a participant’s
period, shown as a percentage of increase or
retirement account.
decrease, over or under the initial investment
cost.
Diversication
The practice of spreading money among different
investments to reduce risk.
Mutual Fund
An investment vehicle that is made up of a pool
of funds collected from many investors for the
Fiduciary
A person legally appointed to hold the property
of another party. He or she is expected to act
in that person’s best interests when holding,
investing, or otherwise handling that individual’s
property.
purpose of investing in securities such as stocks,
bonds, money market instruments and similar
assets. Mutual funds are operated by money
mangers, who invest the fund’s capital and
attempt to produce capital gains and income for
the fund’s investors. A mutual fund’s portfolio
is structured and maintained to match the
investment objectives stated in its prospectus.2
201096-0312 CPI
Participant
Short-term Redemption Fees
With regard to qualied retirement plans, an
employee who meets the eligibility requirements
Fund companies assess short term redemption
as dened in the retirement plan document, and
fees on select mutual funds when an investor
who may or may not have an account balance in
sells shares of a fund within a short period of
the plan.
time after purchase. Each individual mutual
fund company determines how the fees are
Plan Sponsor
calculated and what is considered “short
term.” This fee is intended to discourage
With regard to retirement plans, the entity,
market timing and other abusive short term
or employer, responsible for establishing and
trading practices. Short-term redemption fees
maintaining the plan.
are intended to protect the interests of all
investors in the mutual fund.
Prospectus
A formal legal document, which is required
Vesting
by and led with the Securities and Exchange
The participants’ ownership right to company
Commission, that provides details about an
contributions generally earned by completing
investment offering for sale to the public. A
years of service as outlined in the vesting
prospectus should contain the facts that an
schedule contained in the plan document.
investor needs to make an informed investment
decision.3
Rebalance
The process of bringing a portfolio account back to
http://dictionary.reference.com; http://www.reference.com
1 “Equity.” Investopedia.com - Your Source For Investing Education.
Investopedia ULC. Web. 9 June 2010. <http://www.investopedia.com>.
2 “Mutual Fund.” Investopedia.com - Your Source For Investing Education.
3 “Prospectus.” Investopedia.com - Your Source For Investing Education.
its original investment allocation.
Rollover
The transfer of retirement funds from one
retirement plan to another eligible plan or to an
IRA without incurring a tax liability.
Salary Deferral
Also known as “elective deferral” or “salary
reduction contributions.” A contribution
arrangement under which the participant elects
to contribute part of his/her compensation to the
401(k) or 403(b) plan on a pre-tax basis.
Go the Distance
Social security has become a supplement, not a principal. On average, Social Security pays
around 40% of pre-retirement earnings. As the baby boom generation retires, this average is
expected to drop due to the reduction in the active work force funding social security.
Are you ready for retirement? Smart saving now, though, will help you prepare for the day when you
decide to join the ranks of America’s retirees. What should you do now? First, ask yourself these questions:
When should I start saving for retirement?
How much will I need to save?
What is the best way to save?
The rst questions are easy… now!
The sooner you start, the easier it is to reach your goals. Albert Einstein was once asked what he considered
to be the most powerful force in the universe. His answer? Compound interest! Starting early is the key.
Saving even a little puts compound interest to work for you. The earnings on your contributions are
reinvested. Now earning on both your contributions and your earnings… and it just keeps growing.
How much do you need?
That one isn’t quite as easy to answer. Studies show that in retirement you’ll need 70%-80% of what
you’re living on now. If you want to replace more of your current income, you’ll need to save more. You
should also take into consideration ination and unexpected expenses. Will you work after you retire? Many
Americans do. Saving now will help you work because you want to, not because you have to, when you’re
ready to retire. The savings calculator at www.myretirementfuture.com™ can help you determine just
how much you need to save. You can nd calculators under the Retirement Plan Resources menu within the
Investment Guidance module.
201093-0312 CPI
The best way to save.
Your employer has offered you the most valuable tool available for planning your retirement future: a
retirement plan. The best and easiest way to reach your goal is to participate in the plan:
S
Your deferral contributions are deducted from your salary before federal and state income
taxes, which reduces your taxable income.
S
Tax-deferred earnings let your money grow faster because you pay no current taxes on your
investment earnings.
S
Your deferral contributions are yours, no matter what. If you leave the company, you can roll
over the money in your account into an IRA or other company-sponsored retirement plan.
Finally… talk to your nancial advisor; discuss your goals, time-frame and risk tolerance.
Americans now spend more years in retirement than ever before.
Make sure your savings goes the distance.
Inflation
inflation (in-’fl ā shən) noun 1. a continuing rise in the price level usually attributed to an
increase in the volume of money and credit relative to available goods and services.1
In 1964, when you punched the time clock from your $3.88 an hour job, you could drive your brand
new Ford Mustang that you paid $2,358 for, to the grocery store and buy a Hershey chocolate bar
costing 5¢. Today, after you clock out from your $19.00 an hour job, you can drive your new $34,000
Mustang to the Convenience store and pick up a candy bar for a $1.05.2
Mr. Webster can define inf lation, but can he explain how it works?
Too much money can be a bad thing. When the government releases more currency into circulation,
businesses tend to increase prices to maintain the value of their products. A high demand for products can
also trigger ination.
Ination is not always a bad thing either, many times consumers feel little, if any, impact; however, in
retirement ination eats away at your savings, which may be your only source of income, especially if you
choose not to work after retirement age.
Generally speaking, ination increases the prices on goods causing wages to rise, lowering interest rates and
stimulating the economy. Ination can also lower your purchasing power, creating the risk that you could
outlive your retirement savings, your xed income.
How much more money will you need in retirement to offset ination? Speculating the ination rate can
be tricky at best; it tends to uctuate over time and is as hard to predict as the stock market. Over the
last decade, however, ination is the lowest it’s been since 1919 at 2.78%, (the highest was 1920-1929 at
7.09%).2
Plan for inflation.
Talk to a retired person, and he or she will tell you that having more money at retirement is good…it’s
smart…it gives peace of mind. The more money you have saved when you are ready to retire, the greater the
likelihood that you will not run out of money in retirement. But how can you accomplish that, especially with
the effects of ination on your buying power?
201099-0312 CPI
Pay raises, bonuses and loans that you pay off will have a positive affect on your monthly budget. Look
closely at your current budget. Can you increase your deferral contribution?
As you repay loans and credit card debt, look at your budget again. Can you increase your deferral?
Your nancial advisor is uniquely equipped to help you plan for retirement. With professional guidance based
on your personal needs, you will know what you will need to do to make your retirement dreams become a
reality.
1 Merriam-Webster online, worldwide web (http://www.merriam-webster.com/)
2 The Digeratilife, worldwide web, http://thedigeratilife.com/blog/index.
php/2007/09/17/watch-prices-go-up-interesting-facts-about-ination/.com)
Instructions for Completing the
Enrollment/Change Election Form
ENROLLMENT/CHANGE INVESTMENT ELECTION FORM
Plan Name:

Location ID:
Ref. No.
To En
nroll: Complete
mplete All
A Sections

To Decline Enrollment: Complete Sections A,C and D
(Plan Sponsor: Sen
Send to CPI if checked above.)

To Change Contribution
ution P
Percentage: Complete Sections A, C and D
(Plan Sponsor:: Keep for your records if checked above. Do not send
to CPI.)
Please type or print clearly
Pl
--
-
Your In
Info
Section A
S
How To
Location Name:
me:
Lastt N
Name
First Name
M. I.
Social Security Number (SSN)
The plan offe
errs
r a self-directed brokerage account (SDBA) investment option through Ameritrade. To direct all or part of your future contributions
to the SDBA, you
y
will need to set up your account online. Go to www.myretirementfuture.com, select “Transactions” and “Change Investment
Elections”. Am
mong
m
the
h Location
investment choices,
find the SDBA
A option, select “Sign up” and follow the instructions.
Name
The plan also
o offers
Individually
Managed
Account
(IMA) investment
option
through
. Toname
direct allof
or the
part of
your futurein
contributions
to the
Ifanyour
company
has
multiple
locations,
enter
the
location
which you
work. This
IMA, you willl need to set up your account with . The contributions you direct to the IMA will be invested with a designated default
f
fund for the
IMA and auto
omatically
m
transferred toisthe
IMA once
it is established.
information
used
when
the plan sponsor wants benefit statements divided by location. The plan
invested in accco
o
ordance
ce w
with your prior election or, if none, in the default fund noted with a “D” until a new election is completed through the IVR or web site. Failure
to complete th
his
iss section
tion isLocation
deemed to be a 100%
ID election in the default fund.)
Enter WHOLE percentages in multiples of 1% (i.e. 10%, 25%, 50%). Do not use decimals or fractions. Elections mustt total 100%.
This is only completed if there are different identifiers that will be used to divide benefit statements.
If incomplete, ccontributions will be invested in accordance with your prior election or, if none, in the Life Cycle fund that is closest to your assumed retirement age
The
location
IDuntil
is adetermined
by the
plan
(see the fundss listed
l
below noted
with a “D”)
new election is completed
through
thesponsor.
IVR or web site. Failure to complete the section is deemed to be a 100%
election in the
e applicable
a
able Life Cycle fund. For purpose of the Life Cycle funds, your assumed age is .
%
Section B
Your Investment Direction *Initial Enrollment Only
I direct that alll future
f
contributions will
be invested
in the following
funds and/or
the IMA and/or the SDBA investment options. (If incomplete, contributions will be
sponsor
determine
location
names.
How ToFund Name
%
| this section.
Select one of the three boxes listed in
Fund Name
|
To Enroll: Check this box to enroll in| the plan. Complete all sections of the form.
|
To Decline Enrollment: Check this |box if you do not wish to enroll in the plan.
|
|
Complete Sections A, C, and D |
|
To Change Contribution Percentage: Check
this box if you are already enrolled in the plan and wish to
|
|
change your salary deferral percentage.
Complete Sections A, C, and D.
|
Section A: Your Info
100%
Fund elections MUST TOTAL 100%
Enter
your last
first
middle
initial,
and
social
number
infrom
thea prior
spaces
*This election applies
a
to new contributions
onlyname,
and will not
affectname,
the investment
of existing
assets or
assets
that are security
“mapped” during
a conversion
record keeper.
provided.
Section B: Your Investment Direction

Salary
y Deferral - I instruct my employer to deduct $_________ or _________% of my pay on a pre-tax basis each pay
This section contains a list of the investments available in the plan. To choose an investment, enter
period for in
nvvestment in my account.
a percentage
the space
provided
next
to Plan,
each
name
in which
you
(In the space
e provided,
enter a whole in
percentage
in an amount
permitted
by the
as investment
described in the Plan
Highlights.)
To decline
participation,, enter 0%.
wish to invest. Your
Section C
Your Election
percentages must total 100%. Enter whole percentages only.
a Afterr -Tax - I instruct my employer to deduct
Voluntaary
$_________ or _________% of my pay on an after-tax basis each
pay period fo
or investment
nves
ve Section
into my
a whole percentage in the space provided)
C:account.
Your (Enter
Election
Roth Coontribution - I instruct my employer to deduct $_________ or _________% of my pay on an after-tax basis each pay
Check
Deferral
toportion
makeofamy
pre-tax
period for in
nvestment
intoSalary
the designated
Roth
account.contribution to the plan. Enter the percentage of your
compensation
you wish
to defer
the on
space
provided.
Enterbasis
a whole
only. Check Roth
Cash or Deferred
Bonus - I instruct
my employer
to in
deduct
a pre-tax
after-tax
(Roth) percentage
_________% (maximum
amount ) of m
my Bonus
or IncentivetoCompensation
for investment
in my account.
Contribution
make an after-tax
contribution
to
the plan. Enter the percentage of your compensation
Sign
Section D
Please refer to
o your
y
Summary
Plan Description
(SPD)
Planspace
Highlights,
which will describe
any maximum
limits
on the amount yyou
may contribute
that apply
to
you wish
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inand
the
provided.
Enter
a whole
percentage
only.
You can
make
your plan eitheerr based on the plan’s provisions or under the law. Your employer may restrict the frequency with which you may change this election. Please check
with your Plan
nR
Representative
to seeand
if there
any restrictions.
Deferral
a are
Roth
Contribution.
By signing thiss form,
f
I have
h Section
authorized the
Employer
to deduct the amount elected from my paycheck and transmit the funds to the investment funds indicated.
D:
Signature
I certify that I h
have received the prospectuses for the mutual funds I have chosen to invest in above.
Sign and date the form to complete your enrollment.
Parti
Pa
Participant
rticip
cip
pant
Enrollment/Beneficiary Election form-0412 CPI
Date
Dat
e
both a Salary
Mutual Funds: Putting it All Together
A mutual fund is basically a portfolio of several different securities so its success isn’t dependent
on how one or two holdings perform. Money that you invest in a mutual fund is pooled with
other investors creating greater buying power than if you invested in an individual stock or
bond. As a fund investor, you own shares of the fund.
Investment choices generally fall into three major asset classes: stock funds, bond funds, and money
market funds.
3 Major Asset Classes
How do they work?
Stock Funds
S More aggressive
appropriate for the fund to own, based on stated
S
Value rises and falls
S
Higher return potential
Bond Funds
S Moderate
S
Values rises and falls
S
Moderate return potential
Money market funds
S More conservative
S
Value generally stable
S
Lower return potential
Stock Funds
When you invest in stock funds, you become
part owner in companies in the United States or
around the world. When they prot, you stand to
prot. Stock fund values rise and fall with different
market conditions but they historically have
produced higher returns than funds with more
conservative investments like bonds and money
markets.
201098-0312 CPI
Fund managers decide which securities are most
objectives.
Small-cap funds. Buy stocks of smaller sized
companies with market capitalization values that
are less than $1 billion.
Mid-Cap funds. Invest in stocks from companies
with market capitalization values that fall between
$1 billion and $4 billion.
Large-cap. Buy stocks of larger, well established
companies with market capitalization values that
exceed $4 billion.
Index funds are designed to mirror the
performance of a specic index, such as Standard
& Poor’s 500 index, which is composed of 500
widely held US corps. Index funds are not actively
traded, meaning the fund manager will purchase
the stocks and holds them resulting in lower
operating expenses and management fees.
Growth funds invest in stocks of corps with a
history of solid earnings. The object of these funds
an increase in fund share prices.
Value funds are investments in underpriced
stocks, in other words, inexpensive stock.
Bond funds
Another thing to keep in mind is stock
In comparison, bond funds traditionally
options. An option is the right to buy stock
have produced lower but steadier returns. It’s
of the issuing corporation at a specic price
important to recognize, however, that bond funds
within a stated period. What that basically
can also rise and fall in value. Generally, when
means is when a company gives stock options
interest rates go up, the value of bonds go down.
to their employees, they are giving a promise.
When interest rates go down, bond values go
If the company does well, the stock goes up
up. Bond funds invest in a portfolio of individual
and the employees benet when they decide
bonds, which work like an I. O. U. from the
to purchase their shares at a previously
government. You lend the institution your money
agreed upon price. If the share price has risen
and typically receive interest payments over the
above the agreed price of the option by the
life of the bond. When it matures, you receive
time the employee exercises their right, they
your original principal back.
stand to make a prot.
Investment-grade bond
S Issued by the US Government or other
well established corp.
S
Standard & Poor’s Guide to Money & Investing: Virginia B. Morris,
Kenneth M. Morris; Lightbulb Press
Sold history of paying off debt
Below investment-grade bond
S Issued by smaller establishments
S
Lack a solid history of paying debt
S
Referred to as ‘Junk Bonds’
Money Market funds
Money market funds are typically the most
stable asset class, they invest in US government
securities and high quality investments such
as cash instruments, back certicates and
guaranteed investment contracts issued by
insurance companies, but they generally produce
the lowest returns over time. Stable value funds
offer the least amount of risk to your retirement
savings. Also keep in mind that these funds are
not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government
agency. While they seek to maintain a stable net
asset value of $1.00 per share, it is possible to
lose money by investing in these funds.
Your Investment Profile
In order to assist you in the prudent management of your retirement account(s), please
complete this confidential profi le. Read the questions carefully and circle the number that best
describes your response.
Personal Financial Profi le
1
How long can I HANDLE FINANCIAL EMERGENCIES with the money I have
in savings (not counting money in my retirement plan)?
Less than 2 months of living expenses ................................................................ 1
2 to 4 months of living expenses ....................................................................... 2
More than 5 months of living expenses ............................................................... 3
2
Of my GROSS HOUSEHOLD INCOME, I spend the following percentage on
debts such as credit cards, car payments, and rent or mortgage payments:
More than 33% ............................................................................................... 1
Between 10% and 33% .................................................................................... 2
Less than 10% ................................................................................................ 3
3
What is the time frame for my retirement investment i.e., how many years
before I withdraw funds for my retirement?
Less than 5 years ............................................................................................ 1
At least 5 years, but less than 10 years .............................................................. 2
At least 10 years, but less than 15 years ............................................................ 3
More than 15 years .......................................................................................... 4
Risk Tolerance and Investment Objectives
4
Regarding the risk of investments, I am more likely to change from one
investment to another if:
The value drops by 5% during a given year ......................................................... 1
The value drops by 15% during a given year ....................................................... 2
I will not make investment changes and may even buy more
since prices are low ......................................................................................... 3
201081-0312 CPI
5
How long am I prepared to wait for my account to return to its original
value after experiencing a down market?
Less than 18 months ........................................................................................ 1
Between 18 months and 2 years ........................................................................ 2
More than 2 years ........................................................................................... 3
6
Which of the following statements best describes how I feel about
risk and investing?
Slow and steady is a smart way to get ahead ...................................................... 1
Taking some extra risk is OK, but it’s smart to keep the risk small .......................... 2
Risk means that in the long run I may be gaining substantial growth,
and it is key to take informed risks, not to avoid them .......................................... 3
7
My portfolio consists of:
CDs, Savings/Checking accounts, Money Market funds, and/or Treasury bonds ........ 1
Stocks from large corporations, mutual funds, high-quality corporate bond funds ..... 2
Predominantly small company stocks, or aggressive mutual funds .......................... 3
8
My investment objectives:
I prefer investments that exhibit the least amount of risk, where my
principal investment is stable, even if it means I earn a lower rate of return. ........... 1
I want investments that show steady, long-term growth; I can assume
some risk for the potential of long-term gain. ...................................................... 2
I prefer a more aggressive mix of investments, some with moderate
growth, but mostly those that carry higher risk and the chance for the
maximum capital appreciation. .......................................................................... 3
Your Investment Risk Score
Please add all of your scores from the previous questions and
write your answer here. .................................................................... _______
8 to 11
12 to 20
21 to 25
Conservative Investor
This portfolio is for investors who can bear some risk, but want to emphasize
protection of principal more than capital growth.
Moderate Investor
This portfolio is for investors who consider growth of capital important, but
want to safeguard a portion of their money to meet retirement objectives.
Aggressive Investor
This portfolio is for investors who consider capturing a majority of the market’s
gains their primary objective. These investors place less emphasis on protection of principal and are willing to accept the price swing of the general market.
Mercados alcistas (bull) y bajistas (bear)
Corriendo con el alcista
Hay una vieja frase que dice, “Aquellos que fallan para planear, planea fallar.”
Un mercado bajista (bear)
Estrategia
Un mercado bajista es un mercado donde las
Su mejor estrategia es mantenerse invertido
acciones se epsera que bajen; una tendencia
durante las recesiones. Al estar invertido, usted
descendente a largo plazo que dura meses or años.
no pierde la parte inferior del mercado o los
Un mercado bajista se define como una
disminución de al menos 15% en cada uno de los
tres promedios de valores importantes.
S
The Dow Jones Industrials
S
The S&P 500 Index
S
The Value Line Index*
benecios posteriores cuando suba. Es difícil ver
el valor de sus inversiones bajar en un mercado
bajista, pero el estudio tras estudio ha demostrado
que permanecer invertido en inversiones bien
balanceadas es la mejor estrategia.
La primera clave para invertir con éxito es tener
un plan bien pensado. Su plan debe incluir
varios factores.
Un mercado alcista (bull)
Los mercados alcistas se reeren a un aumento
del mercado donde los precios de las acciones se
S
Comprender la naturaleza de los riesgos
implicados en las inversiones.
S
Aceptando la inevitabilidad de un mercado
bajista y planeando para las recesiones en su
plan de inversión.
S
Y nalmente, tener la disciplina para
mantener en curso incluso cuando el camino
paresca doloroso.
espera que suban; una tendencia ascendente a
largo plazo que puede durar meses o años donde
las acciones muestran aumentos sustanciales
saliendo de un mercado bajista y los mayores
aumentos porcentuales ocurren al comienzo de
la recuperación. La recuperación por lo general
no corrensponde a una recuperación en la
economía, pero generalmente lo procede. Y es
*World Wide Web/Internet
Walker, Jeff, LowRisk.com, 3-13-2009
http://www.lowrisk.com/bullbear.htm
bastante fácil de detectar … como tres meses
después de que ocurre.
Centro de Servicio para Participantes: 800.279.4015 ext. 206 | Sitio de Internet: www.MyRetirementFuture.com®
201089-0412 CPI Español
Términos y explicaciones de distribución
Los procedimientos eficaces de distribución son una parte importante de un exitoso plan de
retiro calificado. El proceso de distribución de CPI se diseño para proporcionar la distrubción
de un participante con rapidez, sin dejar de cumplir los requisitos del Internal Revenue Code y
del Department of Labor.
Lo siguiente son términos comunes
especicos para el proceso de distribución
que son bien para conocer y aprender.
Opciones de pago
El participante o benciario selecciona la
forma de pago. Puede elegir que la cuenta
sea distribuida de las siguientes maneras:
todo pagado en efectivo, todo pagado
como una transferencia directa, una parte
en efectivo y el resto pagado como una
transferencia directa.
Todas las distribuciones de efectivo (que
no sean distribuciones de dicultades
nancieras) están sujetas a retención del
20% de impuestos federales. Sin embargo,
si cualquier parte de la distribución es
pagado en efectivo durante un período de 10
años o más, el participante tiene la opción
de elegir que no impuestos sean retenido
de esa parte. De lo contrario, el grado de
retención del 10% se aplica a la porción de
la distribución. El participante también puede
tener la opción de elegir no retención del
estado, en su caso.
Si la distribución va ser transferida
directamente, el participante o benciario
debe completar el cuadro de Transferencia
Directa (Direct Rollover) en la forma de CPI
de Opciones de Distribución y proporcionar
información del nombre de la institución que
posee el IRA o el nombre del plan de retiro
elegible recibiendo la distribución.
So la distribución es directamente
depositada en una cuenta de cheques o de
ahorros, la caja de depósito derecto debe
ser completada.
Distribiciones
Terminación or pago nal
Una distribución pagada a un participante (o
beneciario) cuando el servicio con el reciente
empleador ha terminado debido a fallecimiento,
inhabilidad o terminación de empleo.
Distribución de en-servicio
Una distribución pagado a un participante
que todavía es empleado; generalmente a la
edad de 59½ cuando disponible. La opción
de distribución de en-servicio debe ser
incluido en el doucmento del plan.
Distrbución minima requerida
Una distribución obligatoria pagada al
participante comenzando a la edad de
70½. La cantidad de esta distribución se
calcula basado en la esperanza de vida del
participante y el balance de su cuenta a
partir de una fecha determinada.
Prestamo
Una cantidad que el participante toma
prestado del plan que debe ser pagado.
La mayoría de los planes establecen una
cantidad mínima del préstamo de $1,000.
La cantidad máxima del préstamo es el
menor de la mitad del balance concedido
del participante o $50,000 en un plazo de
12 meses. Un grado de interés razonable
debe ser aplicado al préstamo. Una nota de
promesa y plan de amortización se preparan
para que el préstamo sea pagado.
Sólo diferimientos del participante
pueden ser usados para distribuciones de
dicultades (no ganancias). Al tomar una
distribución de dicultades, el participante
no será permitido hacer contribuciones al
plan por seis meses.
Distrbución de beneciario
Una distribución del plan al nombrado
beneciario del participante fallecido.
Orden calicada de relaciones
domésticas
Esta orden es emitida por un tribunal de
justicia en relación con un acuerdo de
divorcio. La orden descibe cómo la cuenta de
retrio será dividida entre el participante y su
ex-exposo(a).
Distrubución de dicultades legales
Este tipo de distribución tiene ciertos criterios
que deben cumplirse bajo la ley. Razones
para una distribución de dicultades incluyen:
S
Comprar una casa (residencia principal)
S
Gastos de educación secundaria
S
Ciertos gastos médicos
S
Evitar desalojo de o ejecución de una
hipoteca sobre su hogar
S
Entierro o gastos funerarios
S
Reparación de daños a su casa
Ir a la distancia…
El seguro social se a convertido en un suplemento, no lo principal. Por lo tanto, el seguro social
paga alrededor de 40% de ingresos de antes del retiro. A medida que la generación del baby
boom deje de tabajar, este porcentaje se espeara que baje debido a la reducción en la fuerza
laboral que estan financiando el seguro social.
¿Está listo para su retiro?
¿Cuánto necesita?
Inteligente de ahorrar ahora, sin embargo, le
Esta respuesta no es tan fácil. Los estudios
ayudará a prepararse para el día en que usted
demuestran que en su retiro usted
decida unirse con los americanos retirados.
necesitará 70%-80% de lo que esta usando
para vivir ahora. Si desea reemplazar más
¿Qué debe hacer ahora?
Primero, hágase estas preguntas:
S
¿Cuándo debo comenzar a ahorrar para
mi retiro?
S
¿Cuánto tendré que ahorrar?
S
¿Cuál es la mejor manera de ahorrar?
de su reciente ingreso, tendrá que ahorrar
más. También debe tomar en cuenta la
inflación y gastos imprevistos. ¿Va a trabajar
después de retirarse? Muchos americanos
si. Ahorrar ahora le ayudará a trabajar
porque quiere, no porque tiene que, cuando
esté listo para retirarse. La calculadora de
ahorros en www.myretirementfuture.com
le puede ayudar a determinar cuánto
necesita ahorrar.
La primera pregunta es fácil…ahora!
Cuanto antes empiece, más fácil es llegar a sus
La mejor manera de ahorrar.
metas. Albert Einstein una vez le preguntaron
Su empleador le ah ofrecido el instrumento
lo qué el considera la fuerza más poderosa
en el universo. ¿Su respuesta? ¡Interés
compuesto! Comenzar temprano is la clave.
Ahorrando un poco pone al interés compuesto
a trabajar para usted. Las ganancias de sus
más valioso para planear su futuro: un plan
de retiro. La forma mejor y más fácil para
alcanzar su meta es participar en el plan:
S
Sus contribuciones diferidas se deducen
contribuciones son reinvertidas. Ahora esta
de su salario antes de impuestos federales
ganando en ambos sus contribuciones y sus
y estatales, que reducen sus ingresos
ganancias…y continúan creciendo.
sujetos a impuestos.
S
S
Las ganacias de impuestos diferidos dejan
Finalmente…hable con su consultor nanciero;
que su dinero crezca más rápido porque
discutir sus objetivos, marco de tiempo y
no paga impuestos recientes en las
tolerancia al riesgo. Americanos ahora pasan
ganancias de su inversión.
más años en el retiro que antes.
Sus contribuciones diferidas son siempre
suyas. Si usted deja la compañía, usted
puede transferir el dinero en su cuenta a un
IRA u otro plan de retiro de otra compañía.
Asegúrese de que sus ahorros vayan la distancia.
Fondos Mutuos: Poniendo todo junto
Un fondo mutuo es básicamente un conjunto de diferentes seguridades en lo que su
éxito no depende de cómo uno o dos seguridades se realizan. El dinero que usted
invierte en un fondo mutuo se reúne con otros inversionistas creando un mayor poder
de compra que si usted invirtió en una acción o bono individual. Como un inversor de
fondos, usted es dueño de acciones del fondo.
Las opciones de inversión generalmente
se dividen en tres principales clases de
activos: fondos de acciones (stocks),
fondos de bonos (bonds), y fondos del
mercado de dinero (money market).
3 Pincipales Clases de Activos
Fondos de acciones (stocks)
S Mas agresivos
S Valores suben y bajan
S Mas alto potencial de regreso
Fondos de bonos (bonds)
S Moderado
S Valores suben y bajan
S Moderado potencial de regreso
Fondos del mercado de dinero
(money market)
S Mas conservativo
S Valor generalmente estable
S Mas bajo potencial de regreso
Fondos de acciones (Stock Funds)
Cuando usted invierte en fondos de acciones,
usted se convierte en propietario parcial de
compañias en los Estados Unidos o alrededor del
201098.33-0412 CPI
mundo. Cuando ellos benecian, usted benecia.
Los valores de fondos de accoines suben y bajan
con las diferentes condiciones del mercado,
pero históricamente han producido más altos
regresos que los fondos con inversiones más
conservadoras como los bonos y los mercados
de dinero.
¿Cómo funcionan?
Los manejadores de fondos deciden qué
seguridades son los más apropiados de ser
dueño, basado en los objetivos establecidos.
Los fondos de capitalización baja (Smallcap funds). Comprar acciones de compañias
pequeñas con valores de capitalización del
mercado que son menos de $1 mil millones.
Los fondos de capitalización mediana (MidCap funds). Invertir en acciones de compañías
con valores de capitalización del mercado que
son entre $1 mil millones y $4 mil millones.
Los fondos de capitalización alta (Largecap). Compar acciones de grandes y bien
establecidas compañias con valores de
capitalización del mercado que excedan $4 mil
millones.
Los fondos de índice (Index funds) están
diseñados para reejar el funcionamiento de
un índice especíco, tales como el Standard
& Poor’s index, que se compone de 500
corporaciones sostenidas en los Estados Unidos.
Los fondos de índice no se negocian de manera
activa, es decir, el administrador del fondo
comprará las acciones y las retiene resultando
en gastos operativos y manejamiento más bajos.
Los fondos de crecimiento (Growth funds)
invierten en acciones de compañias con historia
de ganancias sólidas. El objeto de estos fondos
es el aumento de precios de acciones del fondo.
Los fondos de valor (Value funds) son las
inversiones en con valores bajos, en otras
palabras, las acciones de bajo costo.
Fondos de bonos (Bonds funds)
En comparación, los fondos de bonos (bond
funds) tradicionalmente han producido más
bajo, pero estable devoluciones. Es importante
reconocer, sin embargo, que los fondos de bonos
también suben y bajan de valor. En general,
cuando el grado de interés sube, el valor de los
bonos bajan. Cuando el grado de interés bajan,
valor de los bonos suben. Los fondos de bonos
invierten en un portafolio de bonos individuales,
que funcionan como un reconocimiento de deuda
del gobierno. Usted presta su dinero a la institución
y tipicamente recibe pagos de intereses durante
la vida del bono. Cuando madura, usted recibe su
original inversión.
Bonos de grado de inversión
(Investment-grade bond)
Fondos del mercado de dinero
(money market)
Los fondos del mercado de dinero (Money
market) son típicamente la clase de activos
más estables, invierten en seguridades del
gobierno de los Estados Unidos y las inversiones
de alta calidad, como instrumentos de efectivo,
certicados y contratos garantizados de inversión
distribuidos por compañías de aseguransas, pero
generalmente producen el menor regreso sobre
tiempo. Los fondos de valor estable ofrecen la
menor cantidad de riesgo a sus ahorros de retiro.
También tenga en cuenta que estos fondos no
están asegurados o garantizados por la Federal
Deposit Insurance Corporation o cualquier otra
agencia gubernamental. Mientras tratan de
mantener un valor neto de activos estable de
$1.00 dólar por acción, es posible perder dinero al
invertir en estos fondos.
Otra cosa de tener en cuenta es la opción
de acciones. Una opción es el derecho
de comprar acciones de la corporación
distribuyendolas a un precio especico
dentro un período determinado. Lo que
esto signica básicamente es cuando una
compañia da opciones de acciones a sus
empleados, están dando una promesa.
Si la compañia hace bien, la acción
sube y los empleados benecian cuando
decidan comprar sus acciones a un precio
S
Distribuido por el Gobierno de los
Estados Unidos u otras bien establecidas
corporaciones.
S
Historia sólida de pago de deuda
precio acordado la opción para cuando el
S
Bonos de grado de inversión bajo (Below
investment-grade bond)
empleado ejerce su derecho, podra tener
S
Distribuido por pequeños establecimientos
S
No tiene historia sólida de pago de deuda
S
Referido como ‘bonos sin valor’
previamente acordado. Si el precio de
la acción se ha elevado mucho más del
más ganancias.
Origen: Standard & Poor’s Guide to Money & Investing: Virginia B. Morris,
Kenneth M. Morris; Lightbulb Press
Figuración de Inversión
Para poder asistirle en dirigir prudentemente su cuenta(s) de retiro, por favor complete este
cuestionario confidencial. Lea las preguntas cuidadosamente y circule el número que mejor
describe su respuesta.
Figuración financiera personal
¿Cuanto tiempo puedo YO CONTROLAR EMERGENCIAS FINANCIERAS con el dinero
1 en mis ahorros (no contando el dinero en mi plan de retiro)?
Menos de 2 meses de gastos de vivir .............................................................................. 1
2 a 4 meses de gastos de vivir....................................................................................... 2
Más de 5 meses de gastos de vivir ................................................................................. 3
2
De mi INGRESO ANTES DE IMPUESTOS, gasto el siguiente porcentaje en deudas tales
como tarjetas de crédito, abonos de carro, y renta o abonos de casa:
Más de 33% ................................................................................................................ 1
Entre 10% y 33%......................................................................................................... 2
Menos de 10% ............................................................................................................. 3
3
¿Cuanto tiempo tengo para que mi inversión de retiro, es decir, cuántos años antes
de que yo saque dinero para mi retiro?
Menos de 5 años .......................................................................................................... 1
Por lo menos 5 años, pero menos de 10 años .................................................................. 2
Por lo menos 10 años, pero menos de 15 años................................................................. 3
Más de 15 años ............................................................................................................ 4
Riesgo y objetivos de inversión
4
Con respecto al riesgo de inversiones, soy más probable de cambiar de una inversión a otra si:
El valor cae 5% durante un cierto año ............................................................................ 1
El valor cae 15% durante un cierto año........................................................................... 2
No cambiare mis inversiones y tal vez comprare más
si los precios son bajos ................................................................................................. 3
5
¿Cuanto tiempo estoy preparado para esperar para que mi cuenta regrese a su valor original después
de experimentar un mercado bajo?
Menos de 18 meses ...................................................................................................... 1
Entre 18 meses y 2 años ............................................................................................... 2
Más de 2 años ............................................................................................................. 3
6
¿Cuáles de las declaraciones siguientes mejor describen cómo me siento sobre riesgo e inversión?
Lento y constantemente una manera inteligente de salir adelante ...................................... 1
Tomar un poco riesgo es ACEPTABLE, pero es inteligente mantener
el riesgo pequeño ........................................................................................................ 2
Riesgo signica que con tiempo puedo ganar crecimiento substancial,
y es importante tomar riesgos informados, y no evitarlos ................................................. 3
7
Mi lista de inversiones consiste en:
Certicados de depositos, cuentas de ahorros/cheques, fondos
de mercado de valores, y/o seguridades monetarias ......................................................... 1
Unidades de corporaciones grandes, fondos mutuos, seguridades
corporativos de alta calidad ........................................................................................... 2
La majoria en unidades de compañías pequeñas, o fondos mutuos agresivos....................... 3
8
Mis objetivos de inversión:
Preero inversiones que exhiben la menor cantidad de riesgo, donde mi inversión principal es
estable, aunque gane un grado de regreso más bajo. ....................................................... 1
Deseo inversiones que demuestran crecimiento constante, a largo plazo;
puedo asumir un cierto riesgo para el potencial de aumento a largo plazo. .......................... 2
Preero inversiones más agresivas, algunas con moderado
crecimiento, pero sobre todo los que llevan un riesgo más alto y la oportunidad para
apreciación de capital máximo. ...................................................................................... 3
Sus resultados de riesgo de inversión
Por favor agregue todas sus respuestas de las preguntas y escriba su respuesta aquí.
8 a 11
Inversionista conservativo
12 a 20
Inversionista moderado
21 a 25
Inversionista agresivo
Esta lista de inversiones es para inversionistas que pueden tomar poco riesgo,
pero desean protección de principal más que crecimiento de capital.
Esta lista de inversiones es para inversionistas que consideran crecimiento
de capital importante, pero desean proteger una porción de su dinero para
cumplir sus objetivos de retiro.
Esta lista de inversiones es para inversionistas que consideran capturar la mayoría de los aumentos del mercado su objetivo primario. Estos inversionistas
ponen menos énfasis en la protección de principal y están dispuestos a aceptar
los precios del mercado general.

a step by step guide . . . . . . . . . . . . . . . . . . . . . 2 Bull and Bear Market

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