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Employee Financial Resource Program
- 1. The Employee Financial Resource Program SM Helping you reach financial security Insurance products from the Principal Financial Group are issued by Principal National Life Insurance Company (except in New York) and Principal Life Insurance Company. Securities and advisory products are offered through Princor Financial Services Corporation, 800-247-1737, member SIPC. Principal National, Principal Life and Princor ® are members of the Principal Financial Group, Des Moines, IA 50392. BZ1179-01 | 3/2010 | t100218001w
- 2. Presented by David C. Cochrane Principal Financial Group Rochester Business Center
- 3. While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal ® is not rendering legal, accounting or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
- 5. Do you fully understand and appreciate your benefits? What is the average cost of employee benefits for employees of Your company? $XXX per year
- 9. Could you live on 80 percent of your income?
- 10. Age: 35 62 70 90 Your net worth Where are you on the lifeline? accumulate preserve spend down What are the obstacles? What can you do to ensure success? Note: This is a hypothetical example only and is intended to illustrate the potential accumulation through the retirement lifecycle. It is not intended to predict or project any investment results.
- 15. For those seeking an individual analysis , our Financial Strategies program assesses where you are now, where you want to go, and strategies to get there. Financial Strategies
- 16. David C. Cochrane 585-429-9220 Principal Financial Group Rochester Business Center Thank You!
Notes de l'éditeur
- Welcome and thanks for joining me today as we announce the latest employee benefit offered by (xyz company). The benefit is called the Employee Financial Resource Program and it is designed to help you get from here to security.
- My name is ______________ and I am here as a guest of (company). (Company) is interested in having you understand your benefits and how to maximize them. (Company) also want you to have an opportunity to access financial strategies and solutions.
- 2 Before I review the objectives of our time together today, I do want to say that... [Read this and remind employees that Principal National, Principal Life and Princor are prohibited from providing tax and legal advice and that if the employee needs either, he of she needs to get it from his/her own advisor. ]
- One of the biggest reasons many of us work is to enjoy not only the income and what the income provides, but also the benefits offered by our employer that we might not otherwise be able to afford. Here at (Company), you enjoy a wealth of employee benefits. Among these benefits are (Get the benefit list from the HR department and list the specific benefits offered by the company and briefly describe what they are). Employee benefits are really a hidden paycheck because although you don’t see the value reflected on your pay stub, it may be as much as (40%) of your employer’s payroll costs.
- NOTE: You will need to consult with the HR department to get the average cost of benefits per employee. This is important to point out the value of the hidden paycheck and can be stated as a dollar amount, or a as a percentage of payroll.
- These benefits are great but several questions still exist. Do you understand your benefits, and are you maximizing their potential? Do your benefits solve all of your financial needs? Are you likely to stay in your current job until you retire, and if so, what are the ramifications? Will your benefits keep up with inflation over time, and are they guaranteed? These are some of the issues we will explore in, “The Journey to Financial Success.”
- Personal savings rates are disturbingly low and statistics show that few Americans are saving enough for retirement.
- While many experts recommend life insurance equal to seven to 10 times income, many households site gaps in their life insurance coverage.
- Another potential problem may be that the higher your income grows, a lesser percentage of that income will be replaced in retirement by workplace retirement plans. As this chart demonstrates, Social Security and qualified retirement benefits may replace about 80% of your pre-retirement income until you make over about $40,000. As your income increases, however, less and less of your income will be replaced by those traditional means, and more will have to be provided on your own.
- Let’s think about where you are on your financial lifeline. When Social Security was introduced in 1936, the life expectancy was about to age 60. The retirement age was set at 65 with the expectation that a majority of people would not even live to retirement, and the majority of those that did, would not live long after retirement. Well today, the full Social Security retirement age is still 65 and will be graduating up to 67 over the next few years. Many people are retiring earlier than that, and still more want to or intend to. How many of you want to retire before 65? Tell me, what is the life expectancy today for someone who is age 35? It is approximately 80 years of age and rising constantly. In your grandparents time, the average person worked 40-50 years to fund less than 10 years of retirement on average. Today, people work fewer years to fund many more years of retirement. By the time some of you retire, you may expect to live almost as long in retirement as you worked. What does this mean? Simply that you will have to have a plan which anticipates a long life and factors in such things as taxes and inflation if you are going to meet your goals. Let’s look at this lifeline and assume the person is age 35. Where is he or she? How much has he or she accumulated to date? The way we define this is called net worth. Who can tell me what net worth is? That’s right, it is what we own minus what we owe, and hopefully that produces a positive number. As we move down the lifeline, we see this individual has 27 more years that he or she plans to work full time – we call this the accumulation period. During this time, he or she is accumulating the assets to sustain him or her through retirement. At age 62, this individual will retire, but not fully – he or she will work for eight more years on a part-time basis until retiring fully at age 70. This is a phenomenon we will see more and more as time goes on and people become more aware of the pitfalls of retiring too soon and living too long. During this period of time, his or her primary goal for retirement assets is preservation. At full retirement, he or she will begin liquidating and spending the assets, hoping to spend down, but not out, of money before death. After death, the assets will be distributed to his or her heirs, and estate planning may ensure that the remaining assets go to the right place in the right way. As I am sure you are aware, managing this process can be full of pitfalls such as, 1) where you are, what you have today, and the opportunities available to you, 2) where are you going (if you have a plan, you are ahead of the game; if not, it is time to assess your goals make sure your efforts are going to achieve them), 3) obstacles, such as taxes, inflation, and illness, and 4) coming up with strategies that can help ensure your success in meeting your goals.
- Are you saving enough for retirement? Are you adequately protecting your savings or their income? How are you doing?
- Preparing for your future is critical, and in Financial Strategies, we will help you: Set and prioritize your goals Create action steps Understand ways to implement these steps Make you aware of how to monitor your progress Even if you do not set goals and implement them, you may still get you where you want to go, but let me share a startling fact with you. In a Harvard Business School Study, it was found that of 100 graduates of the school, three out of 100 had written goals and action steps and updated them regularly. The other 97 either had no specific written goals, or they were outdated. After 20 years, the three with a written roadmap had more wealth than the other 97 combined. Were other factors involved? Probably, but people with specific and defined goals can be more successful than those who leave their financial future to chance.
- Next steps (read) Please sign up for individual meetings as sheets are passed around, and begin your journey to financial security.
- Many people want an individual analysis of all areas of their finances. For those people, we offer Financial Strategies. Strategies will help give you a picture of where you are, where you want to go financially, and strategies to help you get there. We make the analysis available through this program at no charge. Financial Strategies examines all aspects of your financial picture, including college funding, tax issues, budgeting, retirement, asset allocation and investment strategies, wealth accumulation, estate planning, survivor benefits, disability insurance, executive benefits, and business continuation if you are a business owner. This approach focuses on understanding you and what you want to accomplish.
- Do you have any questions?