Retirement
Investment Tip from New York Life
December 2010
Put time on your side and invest for the long term.
Experienced investors remain calm even during the most severe financial storms. Consider that everyday investors just like you have faced tough times before and eventually emerged stronger. Remember, successful investing relies on time rather than timing.
A check of recent history shows that even during the glory days of Ronald Reagan’s second term the stock market experienced a dramatic drop of over 30% in a four-month period. Yet those who invested $10,000 in 1984, the beginning of that same second term, would have reaped a hypothetical return of $40,141 (S&P 500 total ending value) just ten years later.(1)
Over short periods of time, diversification may appear fruitless compared to the relative safety of 100% cash or bonds. But during the last 20 years, most stock categories provided higher returns than cash or bonds, despite this decade being one of the most lackluster performers.(2)
So diversify your investments. Take a patient long-term approach. And sit back. History is on your side.
To learn more or to increase the diversification of the investments in your 401(k) plan account, go to mylife.newyorklife.com 24 hours a day, seven days a week or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
(1) Source: Investment Company of America. September 2008. Investment results for 10-year period beginning on January 1, 1984 through December 31, 1993. The unmanaged Standard & Poor’s 500 Composite Index is a widely used measure of stocks issued by relatively large U.S. companies. You cannot invest directly in an index.
(2) Source: Fidelity’s Market Analysis, Research and Education Group. “Is Diversification Dead?” 12/26/08
NYLIM-A015067
November 2010
Help uncover more money to save by setting a budget.
It’s always a good idea to set up a household budget to keep your spending under control. Track your expenses in writing for a one or two month period. You may be surprised where some of your money is going.
Setting a budget is an easy way to know what you can afford and stick to it. Learn to recognize the difference between needs and wants. By identifying the things are that are truly important in your life, you’ll be able to cut out the extras and find more to save for your future. Also, look at paying down your credit cards, especially the ones with high interest rates.
One of the rewards of budgeting is the ability to properly fund your Farm Credit Foundations Defined Contribution/401(k) Plan. There’s a wonderful peace of mind in knowing your contributions are on track to meet your long-term retirement goals.
To view your account and increase the contributions in your 401(k) plan, log on to mylife.newyorklife.com 24 hours a day, seven days a week, or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
NYLIM-A015067
October 2010
Build a solid foundation for the future with online planning tools.
Picture your ideal retirement lifestyle. It can be a reality if you plan right and start now. Many financial advisors estimate that in order to live in retirement as well as you live currently, you’ll need about 80% of your current income. Factor in inflation (3% a year) and years of retirement (if you live to 90, that’s 25 years) and you’ll have an idea of how much you need.
Then ask yourself how much can you expect from Social Security? Pensions? Savings and Investments? Part-time work? The difference between what you can expect and what you’ll actually need is a reasonable goal for your Farm Credit Foundations Defined Contribution/401(k) Plan. Of course, you can aim to save even more and live at a higher level.
To make things easier, we have the tools you need to calculate your retirement income, monitor your account growth, adjust your 401(k) contributions and even alter your investment strategy to meet your goals. Simply log on to mylife.newyorklife.com 24 hours a day, seven days a week. If you prefer, you can also call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
NYLIM-A015067
September 2010
Make sure you contribute enough to get the company match
Employer matching contributions can make your Farm Credit Foundations Defined Contribution/401(k) Plan grow faster and larger. By contributing 6% of your pay to the plan, you can maximize the employer contribution. Make sure you contribute enough to get the company match. Employer matching contributions can make your Farm Credit Foundations Defined Contribution/401(k) Plan grow faster and larger. By contributing 6% of your pay to the plan, you can maximize the employer contribution.
Here’s how it works:
Let’s say your employer matches 50% of your contribution up to 6% of your total income. If you make $50,000 per year and contributed the maximum matched contribution amount of 6%, you would be contributing $3,000 to your plan. Your employer would put in $1,500, for a total of $4,500.1 It’s as good as receiving $1,500 for free.
To take full advantage of the match, log on to mylife.newyorklife.com or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
1 Source: 401khelpcenter.com, “Maximize the Employer Matching Contribution in your 401(k)” by Clifton Linton.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
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Let’s say your employer matches 50% of your contribution up to 6% of your total income. If you make $50,000 per year and contributed the maximum matched contribution amount of 6%, you would be contributing $3,000 to your plan. Your employer would put in $1,500, for a total of $4,500.1 It’s as good as receiving $1,500 for free.
To take full advantage of the match, log on to mylife.newyorklife.com or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
1 Source: 401khelpcenter.com, “Maximize the Employer Matching Contribution in your 401(k)” by Clifton Linton.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
NYLIM-A015067
August 2010
Protect your earnings from the market’s ups and downs.
Conventional wisdom is you don’t want to put all your investment dollars in one place. It’s just too risky. If the value of that one investment goes down, you could suffer a severe setback, making your retirement goals unattainable.
That’s why many believe in diversifying investments across a number of different asset classes with different levels of risk in addition to diversifying within asset class to further ease the potential for significant loss. Should one investment go up, you reap the rewards. Should one go down, you have the balance of your diversified investments to offset a portion of the loss. Keep in mind that diversification does not eliminate risk or guarantee profit.
Your Farm Credit Foundations Defined Contribution/401(k) Plan offers you many ways to diversify:
- You can choose a Vanguard Target Retirement fund with the date closest to your anticipated retirement year - 2010, 2020, 2030, or 2040. Each option contains a different mix of stocks, bonds and cash tailored to the retirement date.
- You can also diversify by selecting your own investment mix based on your specific needs and risk tolerance from the 12 of investment offerings in the plan.
- Open a brokerage account and expand your offerings even more, through TD AMERITRADE at www.tdameritraderetirement.com or call 1-866-766-4015.
To learn more or to increase the diversification of the investments in your 401(k) Plan account, log on to mylife.newyorklife.com 24 hours a day, seven days a week or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
About Risk:
- Because target date funds are managed to specific retirement dates, investors may be taking on greater risk if the actual year of retirement differs dramatically from the original estimated date. While diversification and shifting to a more conservative investment mix over time helps to manage risk, it does not guarantee earnings growth. There is the potential to lose money in any investment program. You do not have the ability to actively manage the investments within target date funds. The portfolio managers control security selection and asset allocation. Target Date funds allocate their investments among multiple asset classes which can include U.S. and foreign equity and fixed income securities.
Please call 1-800-294-3575 for a prospectus. Investors are asked to consider the investment objective, risks and charges and expenses of the investment carefully before investing. The prospectus contains this and other information about the investment company. Please ready the prospectus carefully before investing.
TD AMERITRADE 1005 N. AmeriTrade Place, Bellevue, NE 68005, division of TD AMERITRADE, Inc., member FINRA/SIPC.
Securities distributed by NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, NJ 07054.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
NYLIM-A015067
July 2010
Let your savings work harder with tax-deferred compounding.
Why would the savings in your 401(k) Plan grow faster than savings in a taxable savings plan? The answer is tax-deferred compounding. In your Farm Credit Foundations Defined Contribution/401(k) Plan, any taxes on your investment earnings are deferred, or postponed until you withdraw the money, presumably at retirement when many seniors are in a lower tax bracket (1). Since you don’t have to eat into your earnings to pay yearly taxes, you have more of your hard-earned dollars working for you. Earning returns on dollars that would have otherwise been paid in taxes enables your funds to grow faster and accumulate to a greater amount. Plus the interest you earn is reinvested back into your account, rather than withdrawn. Earning ‘interest on your interest’ is called compounding. At a hypothetical 8% average annual return, investing $200 a month over 30 years could grow to $300,000 for a $72,000 investment. (2) With returns like that, you may want to consider increasing your contribution rate.
To do so or simply to learn more about the advantages of your 401(k) plan, log on to mylife.newyorklife.com or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
1 Withdrawals prior to age 59 ½ may be subject to a 10% federal tax penalty.
2 This represents no specific investment.
NYLIM-A015067
June 2010
Help manage risk by investing in a mix of investments.
The three basic categories of investments are called asset classes. Each represents a specific kind of investment and different level of risk. The three asset classes are:
- Cash/Money Market
Normally short-term investments, like certificates of deposit (CD) and U.S. Treasury bills (T-bills) offer low risk and less potential for growth.
- Bonds
These are like IOUs issued by big corporations or governments with the promise to pay back at a fixed rate of interest. More moderate in risk, bonds offer a slightly greater return potential than money market investments.
- Stocks/Equities
In this case, you actually own an interest in a company. The value of your stock changes over time and may or may not pay dividend income. Stocks, also known as equities, are higher risk investments, but historically have shown the highest rate of return.
Each asset class has its own characteristics. Each reacts to market changes differently. When one is weak, the other may be strong. That’s why it helps to diversify, or spread your money among different asset classes to reduce your overall risk. Keep in mind however that diversification does not eliminate risk or guarantee profit.
To learn more about the investment options available in your 401(k) Plan, log on to mylife.newyorklife.com 24 hours a day, seven days a week or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
NYLIM-A015067
May 2010
Focus on the basics like updating your beneficiaries.
No one likes to think about the possibility of dying before reaching retirement. Bad as that is, it can be worse for the loved ones left behind if nobody or the incorrect person is listed as your beneficiary. It’s happened. People list one beneficiary when they initially enroll in their 401(k) and never remember to update the beneficiary information over the next 20 or 30 years, even though their life and loved ones may have changed. So it’s smart to double-check and it’s so easy.
You can update your beneficiary elections online at mylife.newyorklife.com by following these simple steps:
- Sign on to Benefits Complete®
- Select the Farm Credit Foundations Defined Contribution/401(k) Plan
- Select the “Manage My Account” tab at the top of the screen
- Select “Beneficiary Election/Change” on the left side of the screen
- Click on the “Add” button and follow the instructions to elect your primary and secondary beneficiaries
If you prefer to review your beneficiary election information by phone, simply call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
New York Life Retirement Plan Services is a division of New York Life Investment Management LLC.
NYLIM-A015067
April 2010
Help your future thrive by participating in the plan.
There’s no reason retirement can’t be the best time of your life. But for that to happen, you have to start the ball rolling by enrolling in the Farm Credit Foundations Defined Contribution/401(k) Plan.
In a perfect world, everyone would enroll while in their 20s. But no matter what your age, even if you’re close to retirement, it’s still smart to enroll in the Plan. Why? Two important reasons: 1. Your earnings grow tax-deferred, so they have the potential to build up faster than traditional savings; 2. The pre-tax dollars contributed to your 401(k) Plan come ‘off the top’ of your paycheck before any taxes are taken out. This lowers your tax liability and saves you money. The more you contribute (up to the Plan limits), the more you reduce your current tax burden.
So if you haven’t started yet, join the Farm Credit Foundations Defined Contribution/401(k) Plan today and start securing your future. If you’re already a participant, consider saving more to help you reach your goals sooner.
To enroll in the 401(k) plan, calculate your retirement income or change your contribution levels, go to mylife.newyorklife.com or call the New York Life Retirement Plan Services Participant Service Center at 1-800-294-3575 from 8 a.m. to 10 p.m. Eastern time on New York Stock Exchange business days.
New York Life Retirement Plan Services (New York Life) is a division of New York Life Investment Management LLC.
New York Life does not provide legal, accounting or tax advice. You should obtain advice specific to your circumstances from your own legal, accounting and tax advisors.
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