Retirement Savings Checkup Date Presenter Name

2 Welcome [Prepared for: (enter client name here)]

3 Allow me to introduce myself  I’m _____________________________  I work for ________________________

4 What we’ll cover today  Planning for retirement –Retirement income –How much will you need and where will it come from  Easy-to-use planning tools –Calculators –Worksheets  Your role –What you can do to reach your goals

5 Are you saving enough for retirement? What percentage of working people are currently saving for retirement? Source: Employee Benefit Research Institute 2014 Retirement Confidence Survey B) 79% C) 51% A) 57%

6 Are you saving enough for retirement? What percentage of people have calculated their financial needs for retirement? Source: Employee Benefit Research Institute 2014 Retirement Confidence Survey C) 85% B) 44% A) 66%

7 Sources of income in retirement Source: Employee Benefit Research Institute 2014 Retirement Confidence Survey Where workers expect their income to come from Social Security Employment Other personal savings or investments An individual retirement account (IRA) An employer-provided traditional pension or cash balance plan What sources of income retirees report having vs. An employer-sponsored retirement savings plan, such as a 401(k) 79% 89% 74% 25% 71% 42% 68% 42% 65% 41% 56% 54%

8 How much income will you need? You will need to replace approximately 75% of your pretax salary in retirement. *2015 FICA tax is 7.65%, composed of 6.20% for Social Security up to a wage base of $118,500 and 1.45% tax for Medicare, which has no wage base limit. Income $37,500 Income $37,500 Annual salary $50,000 FICA (8%) Savings (15%) Other (2%) $12,500 Retirement Income $37,500

9 This slide is just for submissions for legal approval (it shows how the animation breaks out the pie chart on previous slide). Hide or delete for use during presentations. *2014 FICA tax is 7.65%, composed of 6.20% for Social Security up to a wage base of $117,000 and 1.45% tax for Medicare, which has no wage base limit.

10 Consider expenses that may change in retirement Mortgage Health and Life Insurance Income Tax Transportation Costs Saving for College Saving for Retirement

11 Arriving at 75% replacement income  Current before-tax salary –Less FICA –Less amount saved in retirement plan accounts  100% salary –8% Social Security and Medicare* – 15% For retirement – 2% Other – 75% Salary (+-) *2015 FICA tax is 7.65%, comprised of 6.20% for Social Security up to a wage base of $118,500 and 1.45% tax for Medicare, which has no wage base limit.

12 Sources of income in retirement – average retiree Totals do not necessarily equal the sum of the rounded components. Source: Social Security Administration, 2012 Income of the Aged Chartbook, Released: April, (These percentages are based on those age 65 and up with at least $63,648 in annual income in 2012.)

13 Percentage you need to save This chart shows the percentage of salary you should be saving, in combination with contributions from your employer, to maintain your current spending level in retirement. Social Security and other sources (like wages and a pension) are assumed to contribute 25% of your preretirement salary. The chart assumes your salary increases 3% annually, that you earn 7% on your investments in a tax-deferred account, and that you retire at age 65. When you retire, it assumes your initial withdrawal amount will be 4% of your balance at that time. 0 no Savings 1 ⁄ 2x annual Salary 1 x annual Salary 1 1 ⁄ 2x annual Salary 2 x annual Salary 2 1 ⁄ 2x annual Salary 3 x annual Salary 25 13%12%10%8%6%4%3% 30 16%14%12%11%9%7%5% 35 20%18%16%14%12%10%8% 40 24%22%20%18%16%14%13% 45 29%27%25%23%22%20%18% 50 36%34%32%30%28%26%24% 55 43%41%40%38%36%34%32% CURRENT AGE AMOUNT YOU HAVE ALREADY SAVED FOR RETIREMENT

14 Retirement Income Estimator How much will you need? How much you will need Include or exclude Social Security benefits How much you might have

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16 Enter your current annual salary Enter the first year of retirement income

17 Enter your information

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19 Using the Morningstar tools can help you get on track

20 How much will you need?  Morningstar ® Retirement Manager SM –Setting a retirement goal –How much should you be saving –Investment strategy guidance

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23 Contribution Limits  You can contribute 1% to ____% of your before-tax pay up to $18,000 for  If you will be 50 or over by the end of the year, and contribute the maximum amount allowed by your plan, you can contribute up to an additional $6,000 into the plan for $18,000$18,000 Age 49 or younger += $6,000$6,000 Age 50 or older catch-up$24,000$24,000 Annual Totals 2015 IRS employee contribution limits 2015 IRS IRA limits $5,500$5,500$1,000$1,000$6,500$6,500 +=

24 Cost of saving more  Paycheck Calculator –Percent or dollar amount –What happens to my take-home pay

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28 Not on track?  Make adjustments now for benefits later –Contribution rate –Investment strategy  Consider future adjustments –Part-time work in retirement –Standard of living in retirement –Delay your retirement date Immediately impact your retirement account by increasing the amount you save and increase your contributions regularly.

29 Auto-increase service  Automatically increases your payroll deduction each year so you don’t have to worry about doing it yourself.  You choose the amount of the increase and the month you want it to occur.  There is less time required to manage your account.  Signing up is easy: Log in to the website and select Auto-Increase in the Services Information section or call the Plan Account Line. [DELETE SLIDE IF NO AUTO-INCREASE]

30 Annual increase in contributions and the power of compounding This is a hypothetical example for illustrative purposes only and is not meant to represent the investment return of any of your plan’s options. Your situation will vary. $ Salary $30,000 2% contribution rate 7% annual return 3% annual salary increase $83,358 [DELETE SLIDE IF NO AUTO-INCREASE]

31 Annual increase in contributions and the power of compounding This is a hypothetical example for illustrative purposes only and is not meant to represent the investment return of any of your plan’s options. Your situation will vary. Salary $30,000 2% contribution rate 7% annual return 3% annual salary increase $385,289 1% annual contribution increase with a 12% cap $83,358 [DELETE SLIDE IF NO AUTO-INCREASE]

32 Plan today for your retirement tomorrow!  Confirm your retirement goals with significant others  Make changes to stay on track  Call T. Rowe Price at to talk to a retirement specialist from 7 a.m. to 10 p.m. eastern time.  Access the various planning tools at rps.troweprice.com 2014-AX-6048