1. A Step Toward Retirement Planning Made Simple
Congratulations! By learning about your company’s retirement plan you have made a very important step toward saving for your future. The retirement plan is a valuable savings tool and you’ll want to make sure that it is working hard for you. I’m (xx) from the Principal Financial Group®. As of 03/31/2007, we provide services to over 45,000 retirement plans and help approximately 3.5 million people save for retirement. So, I’m pleased to be here today helping you.
This check-up is a simple step-by-step guide to help you identify your retirement goals and possible changes that may make the account more successful. We will offer some suggestions to help you take advantage of what the ACCE Benefits Trust offers. Today we’ll also quickly review the transition from JP Morgan to The Principal® the new services you’ll have under the program now.

2. What we’ll cover Today Congratulations! Transition End.
Review of Plan Provisions
Contributing to the retirement plan
Finding the right investment option mix
Using new resources
Today’s focus will be to help you understand new resources and leave you with some solid action steps to take on how to understand and maximize the plan you have.
We’ll help you evaluate your contribution rate and where you are today. We will help determine how much you may need to contribute to the retirement account under your employer’s plan to help reach your goals. In addition, we will look at investment options that may help you reach your retirement goals.
The final step is to illustrate how to use new resources under the plan to help make changes to the retirement account that can keep you on the right track.

3. Transition Recap
Here is a quick recap of the transition timing. If you haven’t received it yet, you’ll soon see a transition statement by mail.

4. Transition has Ended Change future investment direction
Change salary deferral amount
Transfer existing balances
Request distributions
The good news is that transition is complete and you now have full access to retirement account information. The first step to accessing retirement account information with the Principal Financial Group following the transition period is establishing a personal identification number (PIN) by using our website or calling our Client Contact Center. Once you establish your PIN/password, you can:
• Access the retirement account information
• Change future investment direction
• Transfer existing retirement funds among the available investment options
• Change salary deferral amounts
• Request distributions
Remember, there is nothing you need to wait on from ACCE or Principal to obtain a PIN number and password. You can obtain both of these online or by phone. If you have a password set up already from plan level contact you may use the same password but select “personal” when logging in. We’ll review this within the online demo.

5. Understand the Plan
Ok, let’s get to what we need to for today: The Plan, your savings Goals and Investing

6. Key Plan Provisions Contribution Limits Voluntary Contributions
Roth 401(k) elective deferral contributions permitted
Some of you may have been in the retirement plan for a while and know the basics of the Plan. Each of you may have a different set provisions depending on the plan at your chamber. If you have specific questions on the plan provisions at your chamber you are encouraged to go to your plan contact or call The Principal.
On a broad level we’ve noticed in working with ACCE Trust members that there are questions around contributions, voluntary contributions and Roth contributions. Remember that under the new program a true voluntary contribution is after tax contribution. The contributions made to voluntary contributions are not counted in elective deferral contribution limits and the distributions are taxable at distribution.
Before we move away from the Plan provisions we will review Roth 401(k) elective deferral contributions since this may be new for some of you. This contribution type also is different than voluntary contributions. Qualified Roth 401(k) contributions AND earnings are tax free.

7. Roth 401(k) Elective Deferral Contributions
After-tax contributions, distributions are tax-free*
Counted with deferrals for annual IRS plan limit
May complete a Roth 401(k) election online or by phone
Many of you may have heard the word “Roth” before…as in the Roth IRA. Similar to the Roth IRA, contributions made as a Roth 401(k) elective deferral contribution in the 401(k) plan account are made on an after-tax basis. Distributions from these types of contributions including original contributions and earnings will be tax free if you have met the qualified distribution requirements. These requirements include being at least 59 ½ years old, disability or death. You need to have maintained the Roth 401(k) elective deferral account for at least 5 taxable years from date of first contribution. Roth 401(k) elective deferral contributions are subject to the same annual limitations for deferrals as a pre-tax 401(k) elective deferral contributions. To elect a Roth 401(k) contribution, you will complete a new election online or by phone.
*Distributions are tax-free if you have met the qualified distribution requirements.

8. Set Savings Goals
Determine your retirement goals today and how much you may need to save
Ok, let’s move away from transition and get to what we need to for today: Savings Goals and Investing
In order to figure out how much you may need to save, it is important to decide what your retirement goals are. Some important questions to ask yourself are: When do you plan on retiring? What do you want to do when you retire? Do you want to travel? Do you want to spend more time with your family? Figure out what your retirement dreams are. Your Life stage may have a lot to do with your retirement goals now. It’s hard to think about retirement if it is a long way out. We have some tools to help remind you how to accomplish priorities that are important within your life stage, even while you save for retirement. It’s ok to start small or take small increases. Some action is better than no action.

9. Help Setting Your Goals
The Salary Deferral Calculator available online allows you to calculate as an estimate how much you should be saving to stay on course to meet your retirement goals. This calculation can be done in a matter of minutes – during this meeting.
But for today, I’d like to let you know a few important items:
Participants often underestimate how much they need for retirement and over estimate how much they can withdrawal each year
You are likely to be in retirement for 20 years or more. How much do you have now? Do you know what that means as an annual income? How long will it last?
Some costs may be reduced such as house payments or dependants. However, healthcare in retirement may require more of your savings than you estimate now.
Let’s take a quick look at how to get a savings goal so that those of you who haven’t evaluated yours in some time willl have a reference and those just started will get familiar with the types of information useful when setting these goals.
– Depending on your goals, you may need % of your current income during retirement, and possibly more.
Social Security income – Refer to Table 1 and write down the number that corresponds to the figure that is closest to your annual gross income.
Annual retirement income – Subtract step 3 from step 2. This is the income you will need from your personal savings in today’s dollars.
Future retirement income – Multiply step 4 by the inflation factor from Table 2 that most closely matches the number of years until you retire.
Retirement goal – Multiply step 5 by This figure assumes that you will retire at age 65 and spend 25 years in retirement. It also assumes that you will earn 8% on the amounts you are saving for retirement, with a 3.5% inflation rate.
Current portfolio – Enter the amount of all current retirement investments including your employer’s plan.
Value of current investments at retirement – Multiply the number from step 7 by the growth factor in Table 3 that most closely corresponds to the number of years until you retire.
Retirement shortfall – Subtract step 8 from step 6. This is how much you need to accumulate before you retire.
Annual goal – Multiply step 9 by the accumulation factor from Table 3 that most closely matches the number of years until you retire. This is the amount you should be contributing each year.
Percentage of annual income to save each year – Divide line 10 by line 1.

10. The Advantages of Contributing More
See for yourself with this example. Assume $30,000 in annual income, 35 years to retirement, and an annual 8% rate of return.
It is easy to think that you must allocate a large portion of your paycheck to the retirement plan to be in a good position when you are ready to retire. In reality, increasing your contribution by only 1% at the time of a raise, promotion or any time can really make a big difference in retirement savings with little impact on your take-home pay.
Let’s take a look at the chart on page 8. As you can see in this example, an individual with a salary of $30,000 who increases their contribution from 4% to 5% could have an extra $53,776 at retirement. This increased amount of retirement savings does not require a large contribution. In fact, in this example, the weekly take-home pay only decreased by $ This small deduction can really add to the retirement savings in the long term! Also, remember the contributions that ACCE makes through the employer match. Additional contributions up to 6% equal more match dollars!

11. Investing
Fuel your retirement goals with investment options that are right for you
Now that you have calculated how much you need to save for retirement, let’s take a look at choosing investment options to help you reach your savings goals. If you are already in the plan, you may have selected investment options for the retirement account. Now, when you perform a check-up and re-evaluate your savings goals, you may find that you need to update your investment option elections. It’s also good to check in on what you have.
The ACCE Plan has 17 investment options and the Principal Self-Directed Brokerage Account. The plan offers investment options of different styles to enable you to be diversified.

12. Manage Risk Asset Classes
Risk levels assigned to investment options vary depending on what type of assets the investment options carry
When you diversify, you spread your contributions across investment options that have different levels of risk. That way, an investment option that has a high level of risk can be offset by an investment option with moderate to low risk. This helps protect the overall account.
The categories from lowest risk to highest risk are: Short-Term Fixed Income, Fixed Income, Large U.S. Equity, Small/Mid U.S. Equity, and International Equity. The arrow at the bottom shows the increasing level of risk and the potential rate of return. Remember, as risk increases, on average so does the potential long-term rate of return.
The best place to see how what asset classes are available within the investment options of the ACCE plan is to use the Investment Options Summary online. This will be how each of the 17 investment options fall when organized by asset classes.

13. Manage Risk Asset Classes
Risk levels assigned to investment options vary depending on what type of assets the investment options carry
In addition to the investment options summary, here is a list of the investment options in the ACCE Plan by asset class.

14. What type of investor are you?
Do-it-myself
Do-it-for-me
You may have more time and interest in monitoring investments
You may feel comfortable investing on your own
You may want to be actively involved in retirement planning
You may want to simplify steps to be diversified
You may not want to research types of investments
You may not have time to rebalance
Let’s use what we just went over to look at how to set your investment direction within the plan. But first, let’s step back and make a decision about how much we want to take part in our investment decision. If you are not someone who wants to worry about diversification and risk categories then you are likely a “do it for me” investor. We have tools for both a “do it for me” and a “do it myself” investor.
Let’s take a look at an option for the “do-it-for-me” investor.

15. Principal LifeTime Portfolios
Strategic Income
2010
2020
2030
2040
2050
A good tool for the “do it for me” investor is an investment option which is diversified, rebalances automatically and becomes more conservative as a targeted date nears. The Plan offers the Principal LifeTime portfolios. The Principal LifeTime portfolios align you with one portfolio that is closest to your targeted retirement date (assuming age 65). The portfolio is continually managed and reallocated to become more conservative as your target retirement date nears.
Benefits of this investment option include:
diverse selection of investment options within one portfolio
Managed toward a specific target date
Simplified choice if you seek assistance and less involvement
Portfolio automatically gets more conservative as your target retirement date nears
Principal LifeTime portfolios are the default investment option for the ACCE Plan.
Note: The Principal LifeTime portfolios can help employees elect to allocate contributions.  Principal LifeTime portfolios are investment options that the participant can select based on your targeted retirement date (assuming age 65).  The investment options rebalance automatically and gradually become more conservative as the retirement date nears. Allocations as of 01/2007.

16. Investor profile quiz
We also have a tool to help the “do it myself” investor get started and develop a portfolio based on risk not just picking returns for the investment options which performed well in the last few years.
The Investor Profile Quiz is a 9-question quiz that is designed to help evaluate what kind of investor you are. This quiz should only take 6-8 minutes to complete. If it takes you more than that, you are thinking too hard. It is available online and we’ve also provided a copy for you today.
If you have already decided to elect a Principal LifeTime portfolio, you may not feel a need to complete the Investor Profile Quiz because Principal LifeTime portfolios offer diversified portfolios based on your targeted retirement age, not your personal investment risk tolerance. For everyone else, this quiz can help give you an idea of your risk tolerance and a starting point on how you may split up the percentages of your pie to get a portfolio filled with the plan investment options that matches your risk tolerance. Investment options on your benefit statement, The Principal website and the investment returns you have here are all organized by asset class. So, it is very beneficial, even if you have been investing for many years, to take a minute to complete this profile. It will allow you to easily see what plan investment options may be appropriate for you.

17. Taking Action Evaluate Your Savings Percentage
How does it compare with what you need to make your goal?
Are you getting the most match possible?
Evaluate Your Investment Direction
Are you investing according to your risk tolerance?
Are you using tools for “Do It For Me” or “Do It Myself Approach” ?
If you’d like assistance understanding how to make changes on the account feel free to give us a call.

18. Moving Forward Transfer Statement Quarterly Statement
Quarterly Web Conference Opportunities
Additional local meetings like today
Online Planning Center and Article Library
Quarterly Magazine, Plan Ahead. Get Ahead.®
Contact The Principal®:
Your resources include the materials sent to your home, today’s meeting, many quarterly opportunities as well as the online account and our client contact center. As we close today, I’d like to spend a few minutes showing you the most commonly used and asked about features of the online account. BREAK FOR WEB TOUR

19. Disclosures
A Foundation Options include Principal or Principal Partners mutual funds (Funds) of the Principal Investors Fund series. Principal Investors Fund is distributed by Princor Financial Services Corporation (Princor), member SIPC, Securities are offered through Princor and/or independent broker/dealers. Securities sold by a Princor Registered Representative are offered through Princor. Princor is a member of the Principal Financial Group, Des Moines, IA See the Principal Investors Fund, Inc. prospectus for the full name of each Fund.
1. This investment option is subject to more fluctuation in value than other investment options with stocks of larger, more stable companies.
2. Each index based investment option is invested in the stocks of the index it tracks. Performance of indexes reflects the unmanaged result for the market segment the selected stocks represent. There is no assurance an index based investment option will match the performance of the index tracked.
4. This investment option is subject to additional risk due to fluctuating exchange rates, foreign accounting and financial policies, and other economic and political environments.
8. S&P 500 is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product.
9. S&P SmallCap 600 is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product.
12. Effective October 3, 2005, Vaughan Nelson was added as an additional sub-advisor. Performance results displayed reflect all sub-advisors managing this portfolio during the time periods displayed.
27. Effective March 1, 2006, Bank of New York is listed as a sub-advisor for managing the cash portion of this investment option.
28. Equity investment options involve greater risk, including heightened volatility, than fixed-income investment options. Fixed-income investment options are subject to interest rate risk, and their value will decline as interest rates rise.
29. Asset allocation does not guarantee a profit or protect against a loss. Investing in real estate, small-cap, international, and high-yield investment options involves additional risks.

20. Disclosures
Insurance products and plan administrative services are provided by Principal Life Insurance Company, Des Moines, IA
Before investing in mutual funds, investors should carefully consider the investment objectives, risks, charges and expenses of the funds. This and other information is contained in the free prospectus, which can be obtained from your local representative or by contacting us at Please read the prospectus carefully before investing.
No investment strategy, such as diversification or asset allocation can guarantee a profit or protect against loss in a period of declining values.
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.
Copyright © 2007 Principal Financial Services, Inc. #