Empower Retirement TM IRA

Transcription

1 Empower Retirement TM IRA Whether you ve been a participant in an employer-sponsored group retirement plan, are new to retirement saving, or are just exploring other retirement savings options, the Empower Retirement IRA can help you create a successful savings and retirement income strategy. An individual retirement account (IRA) provides a tax-advantaged way to save and invest money for retirement. You may set aside earned income up to an annual limit set each year by the federal government ($5,500 in 2015). Individuals age 50 or older may also contribute an additional amount ($1,000 in 2015). The Empower Retirement IRA is available as a traditional IRA or a Roth IRA. Both offer unparalleled service, ease of use, and flexible features. Service The IRA experts in our Retirement Solutions Center are available to answer your questions from 9:00 a.m. to 7:00 p.m. Eastern time, Monday through Friday. You also can manage your account and access educational resources anytime online using or by calling our voice response system at (877) In addition, you ll have access to our Reality Investing Advisory Services (Advisory Services) suite, provided by Advised Assets Group, LLC (AAG), a federally registered investment adviser, including Managed Account, Online Investment Advice and Online Investment Guidance services. Simplicity You ll find it easy to open an account, roll over assets from a qualified employer-sponsored plan or another IRA, or consolidate your retirement assets. 2 If Empower Retirement TM administered your previous employer s plan, you can roll over your assets to the Empower Retirement IRA while continuing to receive the same excellent customer service, online account management tools, and user-friendly quarterly statements you enjoyed as part of your group plan. Flexibility You can choose a traditional IRA or Roth IRA (or both) to best fit your retirement income goals. You also have a choice of more than 100 investment options with a wide range of styles and objectives, from a variety of investment management companies. When you begin making withdrawals from your account, your options include full or partial withdrawals and periodic payment options. Please consult with your financial advisor or call the Retirement Solutions Center at (877) to speak to a retirement consultant 3 1 Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. Transfer requests made via the website or voice response system received on business days prior to close of the New York Stock Exchange (4:00 p.m. Eastern time or earlier on some holidays or other special circumstances) will be initiated at the close of business the same day the request was received. The actual effective date of your transaction may vary depending on the investment option selected. 2 You are encouraged to discuss rolling money from one account to another with your financial advisor/planner, considering any potential fees and/or limitation of investment options. 3 The Retirement Solutions Center is available Monday through Friday from 9:00 a.m. to 7:00 p.m. Eastern time. Our Retirement Solutions consultants will not provide tax or legal advice. Please consult with your accountant and/or tax advisor before making your decision. 1

2 Differences Between Traditional and Roth IRAs Both traditional IRAs and Roth IRAs offer tax-advantaged growth potential, and both types of IRAs are subject to annual contribution limits. However, traditional IRAs and Roth IRAs are different. FEATURE TRADITIONAL IRA ROTH IRA Age limit on contributions You cannot contribute after the year you reach age 70½. There is no age limit. Deductibility of contributions Tax treatment of distributions Required distributions You may be able to deduct your contributions depending on your income, tax-filing status, eligibility for an employersponsored retirement plan, and whether you receive Social Security benefits. Distributions are taxed as ordinary income, but if you made nondeductible contributions, not all of the distribution is taxable. A 10% early withdrawal penalty may apply to withdrawals made prior to age 59½. You must begin receiving required minimum distributions by April 1 of the year following the year you reach age 70½. You cannot deduct contributions. Distributions are not taxed if you have been invested in the account for at least five years and the distribution is made due to your disability, death or after you have reached age 59½. There are no required distributions if you are the original owner. Income limit on contributions Source: IRS Publication 590 There is no income limit. For 2015, you cannot contribute if your modified adjusted gross income is over $131,000 for single and head of household filers or $193,000 for joint filers. Special limits apply if you are married but filing separately. Please see IRS Publication 590 for more details. You may contribute to both a traditional IRA and a Roth IRA in the same year. However, your combined contributions cannot exceed the annual limit set by the federal government. For more information, see IRS Publication 590 or consult a financial advisor. Please consult with your financial advisor or call the Retirement Solutions Center at (877) to speak to a retirement associate 3 2

3 Funding an IRA There are several ways to consider funding an IRA: 1. Roll over money from a previous employer s retirement plan. If you have questions regarding When you leave a job and have accrued savings in your employer- the rollover process, please sponsored qualified retirement plan, consider the following options: call the Retirement Solutions 2 Roll the money into a traditional IRA You may roll over all or Center at (877) part of your account balance accumulated on a pre-tax basis to a traditional IRA. This provides continued tax deferral and may offer new investment choices and greater flexibility than the group plan. Roll the money into a Roth IRA A rollover of your designated Roth savings within a 401(k), 403(b), or governmental 457(b) plan to a Roth IRA is not subject to taxes. You also may be able to roll over pre-tax accumulations from a previous employer s retirement plan into a Roth IRA; however, the amount of the rollover is subject to ordinary income tax for that taxable year. For more information, please consult your financial advisor. 2. Consolidate your other IRAs into a single IRA. You may consolidate other IRAs into one IRA to simplify account tracking and management. When you consolidate two or more accounts into a single IRA, you increase your overall account balance, which may lower asset-based fees for certain features (a traditional IRA and a Roth IRA are treated as two separate accounts). You may be able to continue contributing to your consolidated IRA(s). 3. Start a new IRA with an initial amount (and continue contributing if you wish). Once you set up your IRA, you may contribute to your account as long as you have earned income. (If you file taxes jointly, you or your spouse must have earned income.) With a traditional IRA, you may continue to contribute until age 70½. With a Roth IRA, you may make contributions regardless of your age; however, your contributions may be subject to income limits. For detailed information regarding contributions and other options, please see IRS Publication 590 or consult with your financial advisor. 3

4 Investment Options The Empower Retirement IRA provides a broad array of investment options. With more than 100 funds available, including risk-based, asset allocation portfolios and a series of target date funds, you ll have a choice of investment styles and objectives from a variety of leading investment managers. Asset allocation can help you manage risk by spreading your investments among different asset classes, such as stocks, bonds and cash equivalents. While you can invest in any of the Empower Retirement IRA s other investment options at the same time, selecting just one riskbased Great-West Profile Fund or one Great-West Lifetime Fund may be all you need or want. 4 The investment options available to you range from conservative to aggressive. When you choose one of the Great-West Profile Funds or Great-West Lifetime Funds, you get instant diversification and automatic rebalancing, which means that the fund s asset allocation is adjusted periodically to ensure market forces don t cause it to get off track from its intended investment objective. 5 You should still regularly review your investment options, risk tolerance and goals, and make adjustments if your personal circumstances change. Please consult with your financial advisor or call the Retirement Solutions Center at (877) to speak to a retirement consultant 3 4 Asset allocation and balanced investment options and models are subject to the risks of the underlying funds, which can be a mix of stocks/stock funds and bonds/bond funds. For more information, see the prospectus and/or disclosure documents. 5 Diversification, rebalancing and asset allocation do not ensure a profit and do not protect against loss in declining markets. 4

5 Great-West Profile Funds The risk-based Great-West Profile Funds can be selected in correlation with your investor style, with options ranging from conservative to aggressive. The Great-West Profile Funds are professionally managed by qualified investment experts who analyze the underlying funds in each asset class quarterly, select the investment mix, monitor performance, and make adjustments annually. When you choose one of these portfolios, you get instant diversification and automatic rebalancing meaning that the fund is adjusted periodically if market forces cause it to get off track from its intended investment objective. You should still regularly review your investment options, risk tolerance and goals as well as your intended date of retirement, making adjustments if your personal circumstances change. Great-West Lifetime Funds With the Great-West Lifetime Funds, you get an asset allocation strategy designed to adjust over a lifetime, providing you with a diversified mix of investments spread across multiple asset classes in a single investment option. Each Great-West Lifetime Fund employs a different combination of investments among the underlying funds, gradually shifting its emphasis from more aggressive investments to more conservative ones as you approach retirement. The date in a Great-West Lifetime Fund s name represents an approximate date when an investor is expected to retire (which is assumed to be at age 65) and/ or begins withdrawing money. By choosing the Great-West Lifetime Fund closest to your anticipated retirement date, you invest in a single fund that can help address your need for retirement readiness at all stages of life before, at, and in retirement. The principal value of the funds is not guaranteed at any time, including the target date. The Great-West Lifetime Funds include these core features: A lifetime investing approach Expert consultation from Ibbotson Associates, Inc. A wide array of leading investment managers Dynamic portfolios with more than 20 underlying funds A blend of active and passive investment management The Great-West Lifetime Funds are designed to fit all the stages of your life whether you re 20 years old or 20 years into retirement. Great-West SecureFoundation What would you say if we offered to help you secure a guarantee of retirement income for life? Great-West SecureFoundation (SecureFoundation) offers a new approach to the traditional trade-off between protecting retirement income and staying invested in growing markets because it: Protects your retirement income when the market goes down 6 Allows you to benefit when the market goes up Provides you a retirement income for life 7 SecureFoundation is a contingent deferred annuity contract or certificate issued by Great-West Life & Annuity Insurance Company (GWL&A). The SecureFoundation contract is GWL&A s promise to provide a payment of guaranteed income subject to the terms and conditions of your contract or certificate and the claims-paying ability of GWL&A. SecureFoundation is only available through the purchase of a Great-West SecureFoundation fund. Great-West SecureFoundation funds are subject to the risks of their underlying funds. SecureFoundation guaranteed income benefit is not available in New York and may not be available in all states. For more information and to check availability, visit Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information, you may obtain mutual fund prospectuses and/or additional disclosure documents, including the Guarantee Disclosure Statement for Great-West SecureFoundation, from your registered representative or by visiting Read them carefully before investing. 6 SecureFoundation s guaranteed income benefit does not guarantee the investment performance of the applicable Great-West SecureFoundation fund. Neither Great-West Funds, Inc. nor Great- West Capital Management, LLC is responsible for any payments under SecureFoundation s guaranteed income benefit. 7 Excess Withdrawals can deplete the Covered Fund Value and affect your potential guarantee. 5

6 Advisory Services Whether you choose a traditional or Roth IRA, Reality Investing Advisory Services (Advisory Services) is included with the Empower Retirement IRA. Advisory Services, provided by Advised Assets Group, LLC (AAG), a federally registered investment adviser, offers strategies for retirement planning, including Managed Account, Online Investment Advice and Online Investment Guidance services. Managed Account The Managed Account option is designed for the Do-It-For-Me SM Investor who prefers professional portfolio management. AAG provides regular account monitoring and an annual portfolio review. In addition, the customization and personalization features allow for building an IRA portfolio that considers your: Contribution rate and salary Desired retirement age and retirement income Social Security benefits estimate and other outside assets The customization components can be updated at any time and help ensure effective portfolio design during both the accumulation and distribution phases of your life. The Managed Account service charges a fee based on your account balance and it is deducted from your account quarterly. Online Investment Advice and Online Investment Guidance Online Investment Advice is for the Help-Me-Do-It SM Investor who prefers to manage his or her own account with validation from a financial expert. It provides you with a fund-specific recommendation based on the investment lineup available as part of the Empower Retirement IRA. Online Investment Advice charges a flat fee that is deducted from your account on a quarterly basis. Online Investment Guidance is for the Do-It-Myself SM Investor. It s a free service that provides personalized asset allocation assistance, but not specific fund recommendations. Please see the enclosed Fees and Minimums sheet for a complete description of the fees associated with the Managed Account service and Online Investment Advice. There is no guarantee that participation in Advisory Services will result in a profit or that your account will outperform a self-managed portfolio. Please consult with your financial advisor before signing up for this service. Please consult with your financial advisor or call the Retirement Solutions Center at (877) to speak to a retirement consultant 3 6

7 Access to Your IRA You can withdraw money from your IRA at any time. However, be aware of the tax consequences of each withdrawal and consult with your financial advisor for assistance. Withdrawal Options When you begin making withdrawals from either a traditional or Roth IRA, your options include: Full distribution Partial distribution Periodic withdrawals for a specified amount Periodic withdrawals for a specified number of years Substantially equal periodic payments over the owner s lifetime Loans are not available from IRAs. For detailed withdrawal and required minimum distribution rules, see IRS Publication 590. Traditional IRA You may take withdrawals without penalty from your traditional IRA after you reach age 59½. Your taxable distribution is subject to ordinary income tax, including applicable federal, state and local income tax, in the year you take the withdrawal(s). If you take a withdrawal before age 59½ from your traditional IRA, it s subject to a 10% federal early withdrawal penalty in addition to ordinary income tax. There are a few exceptions to the age 59½ rule, as stated in IRS Publication 590; or refer to your financial advisor for more details. Required Minimum Distributions You cannot keep your money in a traditional IRA indefinitely. You must begin taking required minimum distributions (RMDs) from a traditional IRA by April 1 of the year following the year you turn age 70½. If you don t take an RMD, or you take a withdrawal that is not large enough to meet your RMD requirement, a 50% excise tax will apply to the amount that should have been withdrawn from your account but was not, according to RMD calculations. You re also subject to ordinary income taxes on the full amount that should have been withdrawn. Roth IRA Please consult with your financial advisor or call the Retirement Solutions Center at (877) to speak to a retirement consultant 3 You may take withdrawals from your Roth IRA tax-free if your withdrawals meet certain requirements. As of the year of distribution, you must have been invested in the Roth IRA for a minimum of five years and the distribution must be made in one of the following situations: After you reach age 59½ Because you are disabled Distributed to a beneficiary or to your estate after your death When it is used for a first-time home purchase (subject to limitations) If a distribution does not meet the requirements listed above, the portion of the distribution attributable to any earnings may be subject to ordinary income tax and may be subject to the 10% early withdrawal penalty. If you re the original owner of a Roth IRA, you don t have to take distributions, regardless of your age. 7

8 Getting Started How do I set up the Empower Retirement IRA? Apply online at 1 You may also complete the enclosed application form and fax or mail it in. Can I continue to make contributions after my initial rollover? You may make contributions that fall within the IRS limits (as described in the Disclosure Statement on the Empower Retirement IRA application). Your contributions to a traditional IRA may be tax-deductible. What is the minimum amount required to open the Empower Retirement IRA? You will need to make an initial investment of $500 or roll over assets from your previous employer s retirement plan or your current IRA. How do I monitor and manage the Empower Retirement IRA? You can track your account through your quarterly statement, review your account and make changes online at or manage your account over the phone by calling the Retirement Solutions How do I complete a rollover from my retirement plan into the Empower Retirement IRA? Complete the IRA application form and then complete the required distribution forms from your previous employer s plan or current IRA to initiate the rollover 9. If you have questions regarding the process, please call the Retirement Solutions Center at (877) Center. 1 Once your IRA is established, you will receive a letter with the Retirement Solutions Center phone number, as well as your password and Personal Identification Number 8 (PIN) for your account. What fees will I pay? Please see the enclosed Fees and Minimums sheet for a complete description of the fees associated with the Where do I find information on my investment options? Please see the enclosed Investment Options at a Glance for a summary of your options. Fund overviews, values, performance and online prospectuses are available at 1. administration of your account. What additional help does Empower Retirement offer? IRA education IRA rollover assistance 8 Investment information Account management flexibility through the website at and the Retirement Solutions Center 1 Please consult with your financial advisor or call the Retirement Solutions Center at (877) to speak to a retirement consultant 3 8 The account owner is responsible for keeping the assigned PIN confidential. Please contact Empower Retirement immediately if you suspect any unauthorized use. Securities, when offered, are offered through GWFS Equities, Inc., a wholly owned subsidiary of Great-West Life & Annuity Insurance Company and Member FINRA/SIPC. Empower Retirement TM refers to products and services provided by Great-West Life & Annuity Insurance Company (GWL&A) and its subsidiaries, including GWFS Equities, Inc. and Great-West Trust Company, LLC. The trademarks, logos, service marks, and design elements used are owned by GWL&A. PT Great-West Life & Annuity Insurance Company. All rights reserved. Empower Retirement IRA brochure 1/2015 8