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The Benefits of Your AllianceBernstein 401(k) Plan
Overview Consider Your Retirement Needs Learn About Your 401(k) Plan
Understand Your Options Take Action
2
• Why should you save?
Consider Your • Facts about Social Security of inflation Retirement Needs •• Effects Retirement income sources
Why Should You Save? • How much might you spend on groceries if retirement lasts 25 years?
A: $46,706 B: $112,984 C: $155,900
4
Retirement Reality • How much might you spend on groceries if retirement lasts 25 years?
A: $46,706 B: $112,984 C: $155,900
5
Why Should You Save? • 25% of your life that could be spend in retirement. • 75 to 85% of current working income that could be needed each year in retirement.* • 14% of workers feel very confident in having enough money to live comfortably in retirement.** • 26% of workers who feel very confident in having enough money to pay for the basic expenses in retirement.** * Georgia State University RETIRE Project Report, 2010 ** 2012 EBRI Retirement Confidence Survey
6
Effects of Inflation 1967
2012*
2042**
First Class stamp
$0.05
$0.42
$1.23
Gallon of milk
$1.03
$3.87
$10.86
New car
$2,990
$28,715
$80,600
* 2012 price estimates from U.S. Census Bureau ** 2042 price estimates are based on 3.5 percent annual inflation.
7
Retirement Income Sources
2.5% Earned Income
17.8%
16.1% 43.7%
Social Security
Pension
44.9% 19.1%
Investment Income Other
18.7%
Pension includes all defined benefit and defined contribution plans. Estimates are not guaranteed. © 2013 Morningstar. All Rights Reserved. 3/1/2013
17.3%
17.9%
8
• Why invest in the 401(k) Plan Learn About • 401(k) Plan features Your 401(k) Plan • 401(k) Plan account access
Why Invest in your 401(k) Plan?
Annual pay Before-tax contribution (10%)
After-Tax
Before-tax
$70,000
$70,000
0
Income subject to tax
(7,000)
70,000
63,000
Federal taxes (25% bracket)
(17,500)
(15,750)
Net income
52,500
47,250
After-tax contributions (10%)
(5,250)
0
$47,250
$47,250
$5,250
$10,500*
Spendable income Savings
Based on hypothetical $70,000 annual salary. For illustration purposes only. Assumes a flat 25% tax bracket with the standard deduction. Does not include state and local taxes. Systematic investing does not ensure a profit nor guarantee against loss. Investors should consider their financial ability to continue their purchases in up as well as down markets. * Assumes a 5% company match for participation in the AllianceBernstein 401(k) Plan, which is not guaranteed for the future.
10
401(k) Plan: Eligibility Eligibility • Self-Enrollment: as soon as administratively feasible after your date of hire.
Plan website: https://alliancebernstein.ingplans.com. Log In and follow the instructions for enrolling in the 401(k) Plan. If you have not logged in, your initial password is month/day of your birthday. Example: January 4, 1979 - 0104.
Phone: 877.4AB.401K (877.422.4015). Press “0” to speak with a Customer Service Associate available from 8:00 am to 8:00 pm Eastern Time, Monday to Friday, except New York Stock Exchange holidays.
• Auto-Enrollment: if you do not self-enroll, you will be automatically enrolled effective with the first administratively feasible payroll occurring 60 days after your date of hire or rehire.
11
401(k) Plan: Eligibility Highly Paid Employees • Employees whose total AllianceBernstein W-2 earnings plus applicable pre-tax deductions were $400,000 or more in 2013 are considered Highly Paid Employees in 2014. • Limited to a maximum 10% total contribution for the sum of pre-tax and post-tax Roth deferral percentages.
12
401(k) Plan: Contributions Personal Contributions • You may contribute 3% to 35% of your pay on a pre-tax basis up to the 2014 IRS limit of $17,500. • If you are age 50 (or older) before calendar year-end, you may make a catchup contribution of up to $5,500 for the year 2014.
Company Matching Contributions • AllianceBernstein may match your Plan account contributions from 1% to 100% of your pre-tax and/or Roth after-tax 401(k) contributions. Catch-up contributions are not matched.
Company Profit Sharing Contributions • Each year, the Company decides whether or not to make a Company Profit Sharing Contribution (“Company Annual Contribution”), and if so, determines the amount of the contribution.
13
401(k) Plan: Vesting and Rollovers Vesting • Immediately 100% vested in your own contributions and any earnings on those contributions. • Immediately 100% vested in the AllianceBernstein matching contributions, profit sharing contributions and any earnings on those contributions.
Rollovers • You can rollover pre-tax money from another qualified retirement Plan and /or Rollover IRA into your 401(k) Plan. • Forms available on the Plan website at https://alliancebernstein.ingplans.com • Call the 401(k) Service Center at 877.4AB.401K (877.422.4015) then press “0” to speak with a Customer Service Associate from 8:00 am to 8:00 pm Eastern Time, Monday through Friday, except New York Stock Exchange holidays.
14
401(k) Plan: Account Loans Plan Account Loans* • Maximum 2 outstanding loans at a time
• Minimum loan amount: $1,000 • Maximum loan amount: 50% of vested balance
No more than $50,000 in a 12 month period
• Interest rate = Prime Rate + 1.00% • Loan Processing Fee of $75.00 * Loans may impact your withdrawal value and limit participation in future growth potential.
15
401(k) Plan: Account Loans Plan Account Loans* • Pros
Access money for emergencies
No credit check
Pay yourself not a bank
• Cons
Interest paid on principle for the life of loan
Opportunity cost of money being out of financial markets
* Loans may impact your withdrawal value and limit participation in future growth potential.
16
401(k) Plan Access Service Center • 24-hour phone system interactive voice response • Customer Service Associates available 8:00 a.m. to 8:00 p.m. Eastern Time, except on New York Stock Exchange holidays
Plan website • Fund fact sheets / prospectus
• Change elections for future contributions
• Daily information on Plan account
• Change deferral percentages
• Transfer money among funds
• News articles and calculators
• Investment options with performance
17
Understand Your Options
• Investment Types • Historic Asset Class Returns • 401(k) Plan Options
Investment Types Asset Class
Asset Source
Overview
Cash equivalents
Short-Term I.O.U.s
Securities with a low-risk, low-return profile that include U.S. government Treasury bills, bank certificates of deposit, bankers' acceptances, corporate commercial paper and other money market instruments.
Bonds
Intermediate & LongTerm I.O.U.s
Securities in which an investor loans money to an entity for a defined period of time at a fixed interest rate. Companies, municipalities, states and U.S. and foreign governments use bonds to finance a variety of projects and activities.
Stocks
Ownership
Securities that offers a claim to a part of the corporation's assets and earnings. The shareholder is an partial owner of a company determined by the number of shares a person owns relative to the number of outstanding shares.
19
Ibbotson® SBBI® ─ Stocks, Bonds, Bills, and Inflation 1926–2012 $18,365 $10,000
1,000
100
Historic Compound Annual Return • Small stocks 11.9 % 9.8 • Large stocks • Government bonds 5.7 • Treasury bills 3.5 • Inflation 3.0
$3,533
$123
$21 $13 10
1 0.10 1926 1936 1946 1956 1966 1976 1986 1996 2006 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2013 Morningstar. All Rights Reserved. 3/1/2013
401(k) Plan: Investments Three Ways to Invest • Pick A Date ─ the fully diversified AllianceBernstein Retirement Strategies, managed by experienced portfolio management teams targeting specific future dates until 2055.
• Mix and Monitor ─ create an investment mix by choosing a combination of the 401(k) Plan’s investment options and monitor that investment mix, making adjustments as your goals change over time. • Mutual Fund Window ─ investment of Plan account assets in an array of approximately 13,000 mutual funds—including a variety of AllianceBernstein mutual funds.
21
401(k) Plan: Investments High
RISK
Now
Retirement Strategy Portfolio asset allocation grows more conservative by holding more bonds/cash and less stock as the target date is approached 10 years 20 years 30years years 30
40 years
Low
This hypothetical example is for illustrative purposes only. The chart represents potential risk and return and does not reflect actual Retirement Strategy Portfolio allocations.
22
401(k) Plan: Investments Retirement Strategy Portfolios ─ Pick a Date
• For participants wanting a simple and effective investment option relying on decisions of an experienced management team.
AllianceBernstein 2000 Retirement Strategy* AllianceBernstein 2005 Retirement Strategy* AllianceBernstein 2010 Retirement Strategy*
AllianceBernstein 2015 Retirement Strategy*
• Select the Portfolio with the date closest to the date expected to retire.
AllianceBernstein 2020 Retirement Strategy AllianceBernstein 2025 Retirement Strategy AllianceBernstein 2030 Retirement Strategy
• Portfolio management team automatically adjusts the asset mix of a Portfolio as the target date nears.
AllianceBernstein 2035 Retirement Strategy AllianceBernstein 2040 Retirement Strategy
AllianceBernstein 2045 Retirement Strategy AllianceBernstein 2050 Retirement Strategy
* Portfolios intended for those participants near or in retirement.
AllianceBernstein 2055 Retirement Strategy
23
401(k) Plan: Investments Core Portfolios – Mix and Monitor
• Designed for participants wanting to select their own mix from a choice of nine asset class portfolios.
AllianceBernstein Wealth Strategy ─ Appreciation AllianceBernstein Wealth Strategy ─ Balanced AllianceBernstein Wealth Strategy ─ Conservative AllianceBernstein US Style Blend AllianceBernstein International Style Blend AllianceBernstein Global Style Blend AllianceBernstein US Short Duration Plus AllianceBernstein US Strategic Core Plus AllianceBernstein Government Cash
24
401(k) Plan: Investments Mutual Fund Window 13,000 different mutual funds 400 mutual fund families AllianceBernstein mutual funds available, except for those funds already in the 401(k) Plan menu
25
• A brokerage account option offering a greater variety of mutual fund investing designed for participants wanting a more hands-on approach to investing.
401(k) Plan: Choosing Investments Ask yourself these questions 1. “Do I have the desire to select my own mix of individual funds?” 2. “Can I comfortably decide how much money to invest in each fund?” 3. “Do I have the time and interest to choose and monitor investments from multiple investment options?”
Potential choice • Pick A Date may be appropriate if you answered “No” to one or more questions.
• Mix & Monitor may be appropriate if you answered “Yes” to one or two questions. • Mutual Fund Window may be suitable for you by answering “Yes” to all three questions.
26
• Factors to consider
Take Action
• Develop a strategy • Make the most of the Plan
Factors to Consider
Personal Financial Situation
• Marital status • Income level • Current Savings
Time Horizon
Retirement Savings Strategy
Sensitivity to Risk • Investment risk • Inflation risk
• When will resources be needed?
Life Events Contact your financial advisor if you need assistance determining the right retirement savings strategy for you.
• New home • Medical care
• Interest rate risk
• Starting a family
• Retirement shortfall risk
• College
28
Develop a Wealth Management Strategy Wealth decisions • Based on age, personal goals, risk tolerance and future need for assets saved
Components
Using asset allocation/ diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.
• Asset allocation • Buy and sell guidelines • Risk guidelines
Investment focus • Capital appreciation • Wealth protection • Plan for beneficiaries
29
Make the most of your 401(k) Plan Join • Plan website: https://alliancebernstein.ingplans.com • Plan Service Center: 877.4AB.401K (877.422.4015)
Set retirement savings goal • Evaluate all your risks and their potential reward
Review investment options carefully
Using asset allocation/ diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.
• Create a diversified investment portfolio* • Review your investment portfolio regularly
Adjust accordingly for life events
Monitor portfolio personally or through a professional advisor
30
Important Notes • This presentation is designed to provide you with fundamental information on your AllianceBernstein 401(k) Plan, objectively highlight your fund options and outline other sources of information for your decisions. • The presentation does not constitute legal, investment or financial advice of any kind - please consult your own advisors for such advice. • Any fund performance illustrated in this presentation details historic returns and does not guarantee future investment returns of the funds reviewed.
31
Overview Consider Your Retirement Needs Learn About Your 401(k) Plan
Understand Your Options Take Action
2
• Why should you save?
Consider Your • Facts about Social Security of inflation Retirement Needs •• Effects Retirement income sources
Why Should You Save? • How much might you spend on groceries if retirement lasts 25 years?
A: $46,706 B: $112,984 C: $155,900
4
Retirement Reality • How much might you spend on groceries if retirement lasts 25 years?
A: $46,706 B: $112,984 C: $155,900
5
Why Should You Save? • 25% of your life that could be spend in retirement. • 75 to 85% of current working income that could be needed each year in retirement.* • 14% of workers feel very confident in having enough money to live comfortably in retirement.** • 26% of workers who feel very confident in having enough money to pay for the basic expenses in retirement.** * Georgia State University RETIRE Project Report, 2010 ** 2012 EBRI Retirement Confidence Survey
6
Effects of Inflation 1967
2012*
2042**
First Class stamp
$0.05
$0.42
$1.23
Gallon of milk
$1.03
$3.87
$10.86
New car
$2,990
$28,715
$80,600
* 2012 price estimates from U.S. Census Bureau ** 2042 price estimates are based on 3.5 percent annual inflation.
7
Retirement Income Sources
2.5% Earned Income
17.8%
16.1% 43.7%
Social Security
Pension
44.9% 19.1%
Investment Income Other
18.7%
Pension includes all defined benefit and defined contribution plans. Estimates are not guaranteed. © 2013 Morningstar. All Rights Reserved. 3/1/2013
17.3%
17.9%
8
• Why invest in the 401(k) Plan Learn About • 401(k) Plan features Your 401(k) Plan • 401(k) Plan account access
Why Invest in your 401(k) Plan?
Annual pay Before-tax contribution (10%)
After-Tax
Before-tax
$70,000
$70,000
0
Income subject to tax
(7,000)
70,000
63,000
Federal taxes (25% bracket)
(17,500)
(15,750)
Net income
52,500
47,250
After-tax contributions (10%)
(5,250)
0
$47,250
$47,250
$5,250
$10,500*
Spendable income Savings
Based on hypothetical $70,000 annual salary. For illustration purposes only. Assumes a flat 25% tax bracket with the standard deduction. Does not include state and local taxes. Systematic investing does not ensure a profit nor guarantee against loss. Investors should consider their financial ability to continue their purchases in up as well as down markets. * Assumes a 5% company match for participation in the AllianceBernstein 401(k) Plan, which is not guaranteed for the future.
10
401(k) Plan: Eligibility Eligibility • Self-Enrollment: as soon as administratively feasible after your date of hire.
Plan website: https://alliancebernstein.ingplans.com. Log In and follow the instructions for enrolling in the 401(k) Plan. If you have not logged in, your initial password is month/day of your birthday. Example: January 4, 1979 - 0104.
Phone: 877.4AB.401K (877.422.4015). Press “0” to speak with a Customer Service Associate available from 8:00 am to 8:00 pm Eastern Time, Monday to Friday, except New York Stock Exchange holidays.
• Auto-Enrollment: if you do not self-enroll, you will be automatically enrolled effective with the first administratively feasible payroll occurring 60 days after your date of hire or rehire.
11
401(k) Plan: Eligibility Highly Paid Employees • Employees whose total AllianceBernstein W-2 earnings plus applicable pre-tax deductions were $400,000 or more in 2013 are considered Highly Paid Employees in 2014. • Limited to a maximum 10% total contribution for the sum of pre-tax and post-tax Roth deferral percentages.
12
401(k) Plan: Contributions Personal Contributions • You may contribute 3% to 35% of your pay on a pre-tax basis up to the 2014 IRS limit of $17,500. • If you are age 50 (or older) before calendar year-end, you may make a catchup contribution of up to $5,500 for the year 2014.
Company Matching Contributions • AllianceBernstein may match your Plan account contributions from 1% to 100% of your pre-tax and/or Roth after-tax 401(k) contributions. Catch-up contributions are not matched.
Company Profit Sharing Contributions • Each year, the Company decides whether or not to make a Company Profit Sharing Contribution (“Company Annual Contribution”), and if so, determines the amount of the contribution.
13
401(k) Plan: Vesting and Rollovers Vesting • Immediately 100% vested in your own contributions and any earnings on those contributions. • Immediately 100% vested in the AllianceBernstein matching contributions, profit sharing contributions and any earnings on those contributions.
Rollovers • You can rollover pre-tax money from another qualified retirement Plan and /or Rollover IRA into your 401(k) Plan. • Forms available on the Plan website at https://alliancebernstein.ingplans.com • Call the 401(k) Service Center at 877.4AB.401K (877.422.4015) then press “0” to speak with a Customer Service Associate from 8:00 am to 8:00 pm Eastern Time, Monday through Friday, except New York Stock Exchange holidays.
14
401(k) Plan: Account Loans Plan Account Loans* • Maximum 2 outstanding loans at a time
• Minimum loan amount: $1,000 • Maximum loan amount: 50% of vested balance
No more than $50,000 in a 12 month period
• Interest rate = Prime Rate + 1.00% • Loan Processing Fee of $75.00 * Loans may impact your withdrawal value and limit participation in future growth potential.
15
401(k) Plan: Account Loans Plan Account Loans* • Pros
Access money for emergencies
No credit check
Pay yourself not a bank
• Cons
Interest paid on principle for the life of loan
Opportunity cost of money being out of financial markets
* Loans may impact your withdrawal value and limit participation in future growth potential.
16
401(k) Plan Access Service Center • 24-hour phone system interactive voice response • Customer Service Associates available 8:00 a.m. to 8:00 p.m. Eastern Time, except on New York Stock Exchange holidays
Plan website • Fund fact sheets / prospectus
• Change elections for future contributions
• Daily information on Plan account
• Change deferral percentages
• Transfer money among funds
• News articles and calculators
• Investment options with performance
17
Understand Your Options
• Investment Types • Historic Asset Class Returns • 401(k) Plan Options
Investment Types Asset Class
Asset Source
Overview
Cash equivalents
Short-Term I.O.U.s
Securities with a low-risk, low-return profile that include U.S. government Treasury bills, bank certificates of deposit, bankers' acceptances, corporate commercial paper and other money market instruments.
Bonds
Intermediate & LongTerm I.O.U.s
Securities in which an investor loans money to an entity for a defined period of time at a fixed interest rate. Companies, municipalities, states and U.S. and foreign governments use bonds to finance a variety of projects and activities.
Stocks
Ownership
Securities that offers a claim to a part of the corporation's assets and earnings. The shareholder is an partial owner of a company determined by the number of shares a person owns relative to the number of outstanding shares.
19
Ibbotson® SBBI® ─ Stocks, Bonds, Bills, and Inflation 1926–2012 $18,365 $10,000
1,000
100
Historic Compound Annual Return • Small stocks 11.9 % 9.8 • Large stocks • Government bonds 5.7 • Treasury bills 3.5 • Inflation 3.0
$3,533
$123
$21 $13 10
1 0.10 1926 1936 1946 1956 1966 1976 1986 1996 2006 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2013 Morningstar. All Rights Reserved. 3/1/2013
401(k) Plan: Investments Three Ways to Invest • Pick A Date ─ the fully diversified AllianceBernstein Retirement Strategies, managed by experienced portfolio management teams targeting specific future dates until 2055.
• Mix and Monitor ─ create an investment mix by choosing a combination of the 401(k) Plan’s investment options and monitor that investment mix, making adjustments as your goals change over time. • Mutual Fund Window ─ investment of Plan account assets in an array of approximately 13,000 mutual funds—including a variety of AllianceBernstein mutual funds.
21
401(k) Plan: Investments High
RISK
Now
Retirement Strategy Portfolio asset allocation grows more conservative by holding more bonds/cash and less stock as the target date is approached 10 years 20 years 30years years 30
40 years
Low
This hypothetical example is for illustrative purposes only. The chart represents potential risk and return and does not reflect actual Retirement Strategy Portfolio allocations.
22
401(k) Plan: Investments Retirement Strategy Portfolios ─ Pick a Date
• For participants wanting a simple and effective investment option relying on decisions of an experienced management team.
AllianceBernstein 2000 Retirement Strategy* AllianceBernstein 2005 Retirement Strategy* AllianceBernstein 2010 Retirement Strategy*
AllianceBernstein 2015 Retirement Strategy*
• Select the Portfolio with the date closest to the date expected to retire.
AllianceBernstein 2020 Retirement Strategy AllianceBernstein 2025 Retirement Strategy AllianceBernstein 2030 Retirement Strategy
• Portfolio management team automatically adjusts the asset mix of a Portfolio as the target date nears.
AllianceBernstein 2035 Retirement Strategy AllianceBernstein 2040 Retirement Strategy
AllianceBernstein 2045 Retirement Strategy AllianceBernstein 2050 Retirement Strategy
* Portfolios intended for those participants near or in retirement.
AllianceBernstein 2055 Retirement Strategy
23
401(k) Plan: Investments Core Portfolios – Mix and Monitor
• Designed for participants wanting to select their own mix from a choice of nine asset class portfolios.
AllianceBernstein Wealth Strategy ─ Appreciation AllianceBernstein Wealth Strategy ─ Balanced AllianceBernstein Wealth Strategy ─ Conservative AllianceBernstein US Style Blend AllianceBernstein International Style Blend AllianceBernstein Global Style Blend AllianceBernstein US Short Duration Plus AllianceBernstein US Strategic Core Plus AllianceBernstein Government Cash
24
401(k) Plan: Investments Mutual Fund Window 13,000 different mutual funds 400 mutual fund families AllianceBernstein mutual funds available, except for those funds already in the 401(k) Plan menu
25
• A brokerage account option offering a greater variety of mutual fund investing designed for participants wanting a more hands-on approach to investing.
401(k) Plan: Choosing Investments Ask yourself these questions 1. “Do I have the desire to select my own mix of individual funds?” 2. “Can I comfortably decide how much money to invest in each fund?” 3. “Do I have the time and interest to choose and monitor investments from multiple investment options?”
Potential choice • Pick A Date may be appropriate if you answered “No” to one or more questions.
• Mix & Monitor may be appropriate if you answered “Yes” to one or two questions. • Mutual Fund Window may be suitable for you by answering “Yes” to all three questions.
26
• Factors to consider
Take Action
• Develop a strategy • Make the most of the Plan
Factors to Consider
Personal Financial Situation
• Marital status • Income level • Current Savings
Time Horizon
Retirement Savings Strategy
Sensitivity to Risk • Investment risk • Inflation risk
• When will resources be needed?
Life Events Contact your financial advisor if you need assistance determining the right retirement savings strategy for you.
• New home • Medical care
• Interest rate risk
• Starting a family
• Retirement shortfall risk
• College
28
Develop a Wealth Management Strategy Wealth decisions • Based on age, personal goals, risk tolerance and future need for assets saved
Components
Using asset allocation/ diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.
• Asset allocation • Buy and sell guidelines • Risk guidelines
Investment focus • Capital appreciation • Wealth protection • Plan for beneficiaries
29
Make the most of your 401(k) Plan Join • Plan website: https://alliancebernstein.ingplans.com • Plan Service Center: 877.4AB.401K (877.422.4015)
Set retirement savings goal • Evaluate all your risks and their potential reward
Review investment options carefully
Using asset allocation/ diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.
• Create a diversified investment portfolio* • Review your investment portfolio regularly
Adjust accordingly for life events
Monitor portfolio personally or through a professional advisor
30
Important Notes • This presentation is designed to provide you with fundamental information on your AllianceBernstein 401(k) Plan, objectively highlight your fund options and outline other sources of information for your decisions. • The presentation does not constitute legal, investment or financial advice of any kind - please consult your own advisors for such advice. • Any fund performance illustrated in this presentation details historic returns and does not guarantee future investment returns of the funds reviewed.
31
