Rollover IRA. Make the most of your retirement savings with the Transamerica IRA

Transcription

1 Rollover IRA Make the most of your retirement savings with the Transamerica IRA

2 Determine which option will help you stay on track When it comes to deciding what to do with your employer-sponsored retirement savings plan, there are four main options to choose from. Take a few moments to review the advantages and disadvantages of each option then consider how rolling your assets to an Individual Retirement Account (IRA) may have an impact on your long-term savings goal. Summary of your potential options OPTION 1 OPTION 2 OPTION 3 OPTION 4 ROLL YOUR ASSETS INTO A TRANSAMERICA IRA LEAVE YOUR ASSETS IN YOUR FORMER EMPLOYER S PLAN ROLL YOUR ASSETS TO YOUR NEW EMPLOYER S PLAN CASH OUT YOUR RETIREMENT SAVINGS PLAN ADVANTAGES A retirement counselor will guide you step-by-step and help you pick an appropriate investment strategy as well as answer retirement planning questions Any investment gains in your account remain tax-deferred You can avoid early withdrawal penalties and taxes Consolidation of your retirement savings plans may make asset allocation and rebalancing easier You may invest and allocate your assets as you prefer There are a broad set of investment choices You can gain independence from your former employer ADVANTAGES A retirement counselor is available to answer general retirement planning questions Any investment gains in your account remain tax-deferred You can avoid early withdrawal penalties and taxes Fiduciary oversight is managed by the plan trustee DISADVANTAGES You typically cannot contribute additional outside savings to the plan Your investment options may be limited ADVANTAGES Any investment gains in your account remain tax-deferred You can avoid early withdrawal penalties and taxes Fiduciary oversight is managed by the plan trustee DISADVANTAGES The new employer plan may have less flexibility than an IRA and may have fewer investment options ADVANTAGES You will have cash readily available DISADVANTAGES You will lose the opportunity for tax-advantaged growth and compounding You could be subject to a 10% federal tax penalty (if you cash out before 59½) The government will take 20% of your cash withdrawal as an advance on your tax bill You could pay more in income taxes DISADVANTAGES You cannot borrow money against an IRA You cannot buy an individual stock or bond 2

3 Take control of your retirement savings strategy Investing in an IRA allows you to take control of your own retirement savings while any investment gains in your account remain tax-deferred. You will enjoy the convenience you re used to along with more choices and counseling when you roll over your employer-sponsored retirement savings to the low-cost Transamerica IRA. Benefits of the Transamerica IRA CONVENIENCE Quick and easy process we take care of the paperwork for you Help is just a phone call away no need to make an appointment Get 24/7 online account access COST No annual administrative fees 1 No commissions or sales charges Competitively priced funds COUNSELING Access to a team of experienced, salaried* retirement counselors Professional help to determine an investment strategy based on your risk tolerance, time horizon and goals Ongoing counseling as you experience future life transitions to help keep you on track * Retirement counselors are not compensated based on recommendations CHOICE More flexibility to withdraw assets on your own terms Investment approaches range from time-based models (rebalances based on your projected retirement date) to risk-based models (matches your portfolio to your tolerance for risk) Access to multiple leading fund managers (all in one professionally managed portfolio) Brighten your retirement outlook During life transitions, such as a job change, lay-off or retirement, you have the opportunity to simplify your retirement savings by consolidating assets into one low-cost product. Opening a Rollover IRA lets you roll over your old retirement savings plan and manage everything in one place. You can continue to save for retirement while receiving the retirement services and solutions that will help you stay on track. 1 Generally there are no annual administrative fees Transamerica reserves the right to assess an administrative fee annually on low balance accounts and the mutual funds are no-load; however, there are fund management expenses. The prospectus contains additional information about the funds, including investment objectives, risks, charges and other expenses. The prospectus should be read carefully before investing. 3

4 Which investment strategy is right for you? The Transamerica IRA offers a choice of investments from a variety of fund managers and sub-advisors. An experienced retirement counselor will guide you through the quick and easy rollover process where you ll choose from one of three flexible investment approaches. 1 Time-Based 2 Risk-Based Time-Based 3 Self-Selected Approach Select one portfolio based on your expected retirement date. Portfolios range from years 2015 to There is also an income portfolio option. Select one portfolio based on your personal risk tolerance. Portfolios range from Short-Horizon (Conservative) to Long-Horizon (Aggressive). Build your own portfolio. There are 15 different Transamerica Partners Funds managed by multiple well-known fund managers. Description Everyone starts with the same investment mix (defined by retirement age) which then evolves and becomes more conservative over time. Everyone starts with a unique investment mix (based on personal risk tolerance) which stays aligned with your risk tolerance over time. With this approach, you review the funds, choose your specific mix of funds and monitor your preference of funds yourself on an ongoing basis. Fund Manager American Century s LIVESTRONG portfolios provide time-based asset management portfolios based on your target retirement date. See page 5 for more details. Transamerica Asset Management manages five types of risk portfolios allocated across various mutual funds. These funds are managed by some of the industry s most experienced sub-advisors, including GE Asset Management, Inc., BlackRock Financial Management, Inc. and Wellington Management Company, LLP. See page 6 for more details. The 15 different mutual funds available are managed by some of the industry s most well known fund managers, including Eaton Vance Management, BlackRock Financial Management, Inc. and Invesco Advisors, Inc. See page 7 for more details. Advantages Requires less effort on your part Often used by investors who prefer a hands-off approach Only requires you to determine your tolerance for risk, meaning how much you are willing to lose to potentially gain Funds are actively managed and monitored to stay within a targeted asset allocation Gives you more control by allowing you to choose from a suite of funds based on your personal preference (you determine when you want to rebalance) Disadvantages May not reflect your true risk tolerance since risk is based primarily on the date you foresee yourself withdrawing money As your time horizon decreases, you ll need to review your risk tolerance and you may need to change to a different allocation Unless you have extensive investment experience, the process can take a significant amount of time for you to conduct the research, choose the funds and actively monitor their ongoing performance Not sure how to choose your investment strategy? No problem! We can help and you will always have the flexibility to change your approach anytime, at no additional cost. 4 The investment strategies discussed will have varying results. An individual s investment decision should be considered in light of that person s objectives, financial situation and particular needs. Investors should always review with their financial advisor the terms, conditions and risks associated with a particular investment or strategy.

5 1 Time-Based The time-based approach combines funds based on your anticipated retirement date and the corresponding risk. American Century Investments manages the LIVESTRONG Portfolios stock exposure to help reduce volatility before retirement and maintain purchasing power during retirement. The goal is to help investors stay on course even as economic and market conditions change. As such, the portfolios asset allocation glide path is designed to navigate the trade-off between market risk and the risk of running out of money in retirement. Target Asset Allocation* Based on Year 100% Stocks Bonds Cash 80% 60% 40% 20% 0% LIVESTRONG 2055 LIVESTRONG 2050 LIVESTRONG 2045 LIVESTRONG 2040 LIVESTRONG 2035 LIVESTRONG 2030 LIVESTRONG 2025 LIVESTRONG 2020 LIVESTRONG 2015 LIVESTRONG Income * As of December 31, 2012 This table indicates the various asset classes and the target investment blend for each portfolio. These weightings vary due to differences in asset class performance. Fund managers regularly review the portfolios and may modify the weightings or substitute the underlying funds at their discretion. By the time each fund reaches its target year, its target asset mix will become fixed and will match that of LIVESTRONG Income Portfolio. A LIVESTRONG Portfolio's target date is the approximate year when the investors plan to start withdrawing their money. The principal value of the investment is not guaranteed at any time, including at the target date. Each target-date LIVESTRONG portfolio seeks the highest total return consistent with its asset mix. Each year, the asset mix and weights are adjusted to be more conservative, In general, as the target year approaches, the portfolio's allocation becomes more conservative by decreasing the allocation to stocks and increasing the allocation to bonds and money market instruments. Support LIVESTRONG The management company of American Century will financially support LIVESTRONG, and investors in LIVESTRONG Portfolios can influence that support. Every dollar invested in LIVESTRONG Portfolios will help determine the amount the management company of American Century will pay LIVESTRONG above a guaranteed amount. American Century Investment Services, Inc., Distributor, has entered into an agreement with the Lance Armstrong Foundation for rights to use the LIVESTRONG name. Under this agreement, every dollar invested in LIVESTRONG Portfolios through 2016 will help determine the amount the management company of American Century Investments will pay the Lance Armstrong Foundation above a guaranteed amount. Under limited circumstances, the agreement can be terminated by either party, and there will be no future payments. LIVESTRONG is a trademark of the Lance Armstrong Foundation. For more information about the foundation, visit LIVESTRONG.org. 5

6 2 Risk-Based The importance of diverse asset allocation A diverse asset allocation investment strategy balances risk versus reward. It adjusts the assets in each portfolio based on your risk tolerance, goals and time horizon across various percentages of stocks and bonds. The risk-based Transamerica Asset Allocation portfolios are invested in Transamerica Partners Funds, which are managed by up to 15 different sub-advisors (see page 7). The strategic allocations are set by Transamerica Asset Management a firm with decades of expertise in asset allocation and an affiliate of Transamerica. Target Asset Allocation* Based on Risk and Horizon + Stocks Bonds Long (12 sub-advisors) Market Performance Short (9 sub-advisors) 10% Short/Intermediate (11 sub-advisors) 30% 70% Intermediate (12 sub-advisors) 50% 50% Intermediate/Long (12 sub-advisors) 30% 70% 90% 10% 90% + Conservative *As of December 31, 2012 Risk Aggressive Benefits of a diverse group of professional money managers Transamerica Asset Management believes there isn t a single investment firm that can be the best in all asset classes; therefore, they seek to team up with multiple, quality managers within stable organizations and follow a consistent investment philosophy and process. By choosing one of the Transamerica Asset Allocation portfolios, you: Put your assets in the hands of experienced, professional money managers Know that your assets are being continuously monitored and rebalanced according to a specified risk tolerance 6 Asset allocation, like all investment strategies, offers no guarantee of positive returns and mutual funds are subject to market risk, including loss of principal. Both the principal value and investment returns of mutual funds will fluctuate over time so that an investor s shares, when redeemed, may be worth more or less than the original cost. The ability of the Funds to achieve objectives depends largely on the performance of the underlying funds in which the Funds invest, a pro-rata portion of whose operating expenses the Funds bear. Each underlying fund s performance, in turn, depends on the particular securities in which that underlying fund invests. Accordingly, the Funds are subject indirectly to all risks associated with the underlying funds, as stated in the prospectus.

7 3 Self-Selected If you choose to select your own funds, you will have access to multiple well known sub-advisors* in a single investment allocation. When using a self-selected approach, you ll want to be sure to monitor your investments and make adjustments as needed over time. Columbus Circle Investors Aronson Johnson Ortiz, LP *As of December 31, 2012 Trademarks are the intellectual property of their respective owners. Opening a Rollover IRA is easy! Get more investment flexibility and control by rolling your assets into the low-cost Transamerica IRA. 1. Call for immediate answers to your questions. 2. Talk with a retirement counselor to receive guidance on your IRA investment approaches. 3. Complete the quick and easy paperwork and start enjoying the benefits! 7

8 TRANSFORM TOMORROW s m At Transamerica, we make products that help meet the needs of today s and tomorrow s investors. Many know us as a leading provider of insurance and retirement products, but we are also recognized for offering an array of timely investment products, including a broad lineup of diverse mutual funds. But the way we see it, we don t just make products. We make solutions. Solutions that allow you either to design your own portfolio using one of our single asset class mutual funds, or to use our expertise in managing your core portfolio with one of our multi-manager solutions. We ve always stood by a simple idea: we do what we say we re going to do. We ve done it for more than 100 years, and we ll keep delivering on our promises so we can keep making the things that make tomorrow better. The prospectus contains additional information about the funds including the investment objectives, risks, charges and other expenses. You should consider all such information carefully before investing. Contact for a free prospectus or prospectus supplement, and read it carefully before making your investment choices. The information contained herein is not intended to constitute legal or investment advice and should not be construed as such. Target date ( Time-Based ) funds are subject to the same risks as the underlying assets in which they invest. Each fund s asset allocation becomes more conservative over time. The percentage of assets allocated to stocks will decrease, while the percentage allocated to bonds will increase, as you approach the target date. The higher the fund s allocation is to stock, the greater the risk. The target year represents approximately when the fund s managers assume the typical investor plans to start withdrawing their money. The fund s principal value is never guaranteed, including at and after the target. You can lose money by investing in target date funds, including near and following retirement. There is no guarantee that the fund will provide adequate retirement income. Asset Allocation ( Risk-Based ) funds are subject to the risks of the underlying funds in which they invest. To the extent the fund invests more of its assets in stock investments, it will be subject to greater risk than a fund investing more of its assets in bond funds. Lower rated, high yield corporate debt securities represent a much greater risk of default and tend to be more volatile than higher rated or investment grade bonds. Foreign securities and markets pose special risks in addition to those customarily associated with domestic securities. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks. Transamerica Partners Funds ( Self-Selected ) are structured as Core Fund and Feeder funds, and are subject to the risks of the underlying funds in which they invest. Investment in such a structure involves direct expenses for each fund and indirect expenses for the underlying funds, which together can be higher than expenses incurred when investing directly in an underlying fund. There is no assurance that any or all of the Transamerica Partners Funds will meet its objectives. Under a Core Fund and Feeder structure, the fund invests its assets in a Core Fund with a similar investment objective. The Advisor is the investment manager to the Core Fund and appoints the Sub-Advisor(s). Savings counselors offer securities through Transamerica Investors Securities Corporation (TISC), 440 Mamaroneck Avenue, Harrison, NY Retirement advisors offer securities and investment advisory services through Transamerica Financial Advisors, Inc. (TFA), Member FINRA/SIPC, and Registered Investment Advisor. The role of the retirement planning consultant is to assist you with your savings and investment plan. There are no fees or commissions for meeting with your retirement planning consultant, who is a registered representative with Transamerica Investors Securities Corporation (TISC), 440 Mamaroneck Avenue, Harrison, NY Your employer has selected Transamerica Retirement Solutions as your retirement plan provider, but there are no other affiliations between your employer and Transamerica or its affiliates, TISC and TFA. TRSCRM /13