De8 asheville savings bank 2011

Our difference is your advantage

IT’S YOUR FUTURE— PLAN FOR IT

Asheville Savings Bank Retirement Savings Plan

Presented by:Jeff Hale, AIFA®

Senior Consultant

PLAN FOR YOUR FUTURE

Understand how the plan works

Set your savings goals

Develop an investment strategy

Choose your investments

ELIGIBILITY

Joining The Plan:

12 Months of Service during which 1,000 hours have been completed

Entry Dates are monthly

YOUR CONTRIBUTIONS

Pretax Savings

You choose the amount, from 1% up to 60% of salary

2011 Maximum is $16,500

50 yrs + can make a $5,500 Catch Up

Flexibility to change contribution rate as often as once per month

It’s Completely Flexible:

MATCHING CONTRIBUTIONS

Your employer will match 100% of the first 3% that you save, plus 50% of the next 2% you save

It’s like getting free money!

If you contribute at least 5% of your pay, the bank will contribute 4% to the plan, that’s an immediate return on your savings.

An Immediate Return

VESTING

You are always 100% vested in any contributions you make to the plan

You are 100% vested in employer matching contributions immediately

When does the money become mine?

WHAT IF YOU NEED YOUR MONEY?

Hardship Withdrawals

Loans

In-Service Withdrawals

Accessing Your Account

HARDSHIP WITHDRAWALS

Allowable only for Specific Situations Purchase a Primary Residence Prevent eviction or foreclosure on your home Un-reimbursed medical expenses Tuition expenses Funeral expenses Qualifying repairs to your principal residence

Penalties and Taxes to Consider


BORROWING FROM YOUR ACCOUNT

Up to 50% of Vested Account Balance

Minimum $1,000, Maximum $50,000

Pay back with Prime +1% Interest

Convenient Repayment Through Payroll Deduction


IN-SERVICE WITHDRAWALS

Rollover amounts Age 59 ½ Penalties and Taxes to Consider


CAN I ROLLOVER MY IRA ACCOUNT?

Rollover amounts from other qualified plans or IRAs

An easy way to consolidate your retirement accounts for greater convenience, cost-savings and control

Consolidate Your Assets

WHAT HAPPENS WHEN I LEAVE?

You can leave the money in the plan (account balance must be over $1000)

You can arrange a direct rollover

You can set up installment payments

You can take your money now -- with implications: income taxes,10% penalty tax, if under age 59 1/2, and 20% withholding

SOCIAL SECURITY ISN’T ENOUGH

But Your Plan Can Help Bridge The Gap

46%

40%

36%34%

30%

42%

38%35%

31%28%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000

Perc

en

tag

e o

f In

com

e R

ep

lace

d b

y

Soci

al Secu

rity

SAVING A LITTLE CAN ADD UP TO A LOT!

ITEM

SAVINGS INCREASE SAVINGS BY

Movies, once a month $10 month/ $120 a year $9,574

Buying lunch, twice a week $10 week/ $520 a year $41,519

Compact disc, once a month $15 month/ $180 a year $14,360

Gourmet coffee, once a week $4 week/ $208 a year $16,608

Take out for dinner, once a week $30 week/ $1,560 a year $124,469

Hypothetical examples of savings are based on contributions made to a tax-deferred retirement account earnings an 8% annual rate of return compounded at the same rate as contributions over a 25-year period. Your own investment returns may earn more or less than this example.

YOUR INVESTMENT STRATEGY

Understanding Asset Classes

Three general asset classes--stocks, bonds and fixed income investments

Each asset class has different risk and return characteristics

Determining which are most appropriate for you is the first step in building an investment strategy

FIXED INCOME FUNDS

Invest in short-term securities issued by banks, corporations, and the U.S. government

Fixed income investments can protect the value of your money over short periods of time; but run the risk of not keeping up with inflation

Consider fixed income investments if you are a conservative investor and will need your money in one to three years or to balance a more aggressive portfolio

BOND FUNDS

Invest in bonds and other interest-earning securities issued by governments and corporations

As interest rates rise and fall, the value of a bond rises and falls in the opposite direction

Consider bonds if you are willing to accept moderate levels of risk and may not need your money for at least several years

STOCK FUNDS

Invest in shares of stock in companies

Stocks offer the highest potential return over time, but also involve the greatest amount of risk to your principal.

Consider stocks if you are investing for the long-term and are comfortable with a higher degree of risk

HOW $1,000 GREW OVER 31 YEARS (’80 – ’10)

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000 Stocks

Bonds

Cash Equivalents

Inflation

Stocks 11.4%, Bonds 8.7%, Fixed Income 5.5%, Inflation 3.4%

1980 2010

$28,077

$13,332

$5,237

$2,858

THINGS TO REMEMBER

About Risk And Return

Generally, the higher an investment’s risk, the higher the potential return

The greater an investment’s stability, the lower the potential return

The shorter the time frame you have for investing, the less risky (more conservative) your investments should be

Pentegra Offers 2 Ways to Approach Asset Allocation

1. The hands-on, Self-Directed approach

2. The easy, hands-off way to invest based on Time Horizon (Target Retirement Funds)

SELF-DIRECTED APPROACH

Your plan offers a wide array of investment choices to help you meet your retirement and investment goals

You can choose to invest in several different investment categories

WHAT’S THE RIGHT ASSET ALLOCATION FOR YOU?

Time Frame Conservative Moderate Aggressive

11 or more Years Stocks 40-60%

Bonds 20-40%

Fixed Income 20-40%

Stocks 60-75%

Bonds 20-40%

Fixed Income 10-25%

Stocks 90-100%

Bonds 0-10%

6 to 10 Years Stocks 30-50%

Bonds 25-45%

Fixed Income 25-45%

Stocks 40-60%

Bonds 20-40%

Fixed Income 20-35%

Stocks 75-100%

Bonds 0-25%

Less than 5 Years Stocks 0-30%

Bonds 40-75%

Fixed Income 25-40%

Stocks 15-50%

Bonds 40-75%

Fixed Income 10-35%

Stocks 50-75%

Bonds 25-50%

Fixed Income 0-25%

T. ROWE PRICE RETIREMENT FUNDS

Time horizon based strategies, ready-made investment portfolios

Allows participants to put their investment strategy on “autopilot”

The funds invest in more than one asset category to reduce risk through diversification

Professionally managed, diversified portfolios

Automatically rebalance to a more conservative strategy as retirement age approaches

Participants should choose the fund that most closely matches expected year of retirement

The Easy Way To Invest for Retirement

401(k) Savings Plan Investment Selection MenuASSET CLASS INVESTMENT MENU ALTERNATIVESU.S. Equities (Stocks)

Large-Cap Blend Vanguard 500 Index Fund Signal (VIFSX)Value American Beacon Large Cap Value Fund Instl (AADEX)Value T. Rowe Price Equity Income (PRFDX)Growth T. Rowe Price Growth (PRGFX)

Midcap Blend Vanguard Mid-Cap Index Fund (VMISX)

Small-Cap Blend Royce Pennsylvania Mutual Fund Investment (PENNX)

REIT T. Rowe Price Real Estate Fund (TRREX)

Non-U.S. Equities (Stocks)Large-Cap American Funds EuroPacific Growth Fund (RERGX)

BondsCore Plus PIMCO Total Return Bond Fund Instl. (PTTRX)Fixed IncomeMoney Market Federated Treasury Obligations Fund Instl. (TOIXX)CD Fund Asheville Savings Bank CD Fund

Target Date Retirement T. Rowe Price Retirement Funds

Supplmental

Employer Stock ASB Bancorp Unitized Stock Fund

PLAN COMMUNICATIONS

Pentegra Online www.pentegra.com

Voice Response Phone 800-433-4422

Live Representatives 800-872-3473 (will supply new PIN #)

Quarterly Statements

PENTEGRA ONLINE

Manage your account and perform transaction online

Access financial planning tools

Obtain Investment Guidance

Obtain daily investment performance information

View investment fund descriptions and historical performance

Access enrollment & education materials

Use our convenient library of plan forms

www.pentegra.com

PENTEGRA ONLINE

ONLINE ENROLLMENT

PENTEGRA ONLINE

YOUR 401(k) PLAN

It’s easy

It’s convenient

It’s the smart way to build a secure future

Start saving today!

YOUR 401(k) PLAN

Questions & Answers

De8 asheville savings bank 2011

Economy & Finance

Transcript of De8 asheville savings bank 2011