Workplace Banking Programs see page 2 IRAs AND YOUR FINANCIAL FUTURE: How Investing Smart Now Can Have Lasting Benefits for You and Your Family see page 4 TAKE CHARGE OF YOUR DEBT AND TAKE Control of Your Financial Future see page 5 ALSO IN THIS ISSUE: > Add A Retirement Plan to Your Employees Benefits see page 3 > Be Careful Choosing a Credit Counselor see page 6 pnc.com 1-877-CALL-PNC
Workplace Banking Programs It s a challenge all business owners face: Making your company a more attractive place to work. The good news is you do not necessarily need to pay more to attract and retain good employees. Smart entrepreneurs are sweetening their employee benefits package with low-cost, or no-cost perks to help their companies stay competitive in the market for good employees. Benefits such as flexible work schedules, health club memberships and relaxed dress codes often make a difference when candidates are weighing job offers. Another free perk that can make a difference is a workplace banking benefits program. What Is a Workplace Banking Program? In an effort to reduce employee absenteeism and improve productivity, many companies now offer benefits to enhance employees physical wellbeing, such as smoking cessation workshops or discounts on health club memberships. Similarly, a well-structured workplace banking program can help your employees become more financially fit, which can lead to higher levels of satisfaction in their professional and personal lives. Essentially, it is a package of free and discounted financial services your company can offer to employees as part of your overall benefits package. Typically, there is no cost to participate, only rewards for both your company and your employees How Will My Company Benefit from a Workplace Banking Program? By far, the No. 1 reason to add a workplace banking program to your company is that it gives potential workers one more reason to choose your firm over another, and it gives your current employees one more reason to want to continue working for you. And it s free. Additionally, these programs often increase direct deposit participation. According to the American Payroll Association, the cost of issuing paper payroll checks can be as much as $18 per check, so a company can significantly reduce payroll processing costs if employees switch to direct deposit. Depending on your company s size and location, the package could also include special arrangements for an onsite ATM, reducing the time employees may spend away from work taking care of their banking business. Generally, the more exclusivity you are willing to grant a provider, the more benefits you and your employees can expect to see. By adding a reputable workplace banking program, a company can perk up its employee benefits package without driving up its overhead. And, at no cost to the company, the rewards can be great. How Will My Employees Benefit from a Workplace Banking Program? When evaluating workplace banking programs, employers should look for packages of benefits and offer employees financial services they can not get otherwise. A well-structured program includes a free personal checking account with direct deposit of their payroll check, and special promotional offers available only to employees of participating companies, such as better 2 Directions JAN/FEB 2008
Add A Retirement Plan to Your Employees Benefits A retirement plan can help your business to be more competitive when it comes to recruiting, retaining and rewarding employees. rates on CDs or waivers on mortgage fees. Also, it is a good idea to choose a provider that has a significant number of branches and ATMs in the community, making it more attractive to participants. Even more important, a good workplace banking program is centered on financial wellness. That means it goes beyond special product offers and includes free financial advice and assistance to help employees reach their financial goals. Employee seminars on relevant and timely topics, such as identity theft protection, saving for retirement, or general financial planning should be an integral part of the program. If space allows, these seminars can be held at your work site. Employees may also be entitled to free one-onone consultations to discuss their unique financial circumstances. Like the discounted health club membership that encourages employees to get in shape, specially priced or free banking services motivate employees to get their financial houses in order many for the first time. It s challenging for most people to save for retirement, that s why employees are more loyal to companies that offer 401(k) plans and other employee retirement savings programs. With a 401(k), your employees can have plan contributions automatically deducted from their paychecks and you have the option to offer matching contributions if you desire. By supplementing your employee benefits program with an employee retirement plan, you ll generate greater participation for both your workplace banking and retirement plan programs. In the long run, you ll benefit both your employees and your company with improved employee financial well-being, enhanced employee work performance and a better bottom line for both you and your employees. pnc.com 1-877-CALL-PNC 3
IRA S AND YOUR FINANCIAL FUTURE: How Investing Smart Now Can Have Lasting Benefits for You and Your Family Tax season may be just around the corner, but if you act no later than April 15th, you can still take advantage of one very important investment opportunity funding your IRA. This small step can mean big benefits for you and your family. A Quick Course on IRAs IRA stands for an Individual Retirement Account, which is a broad term that describes a trust or custodial agreement that provide tax advantages to almost anyone saving for retirement. The money invested in an IRA plan is termed contributions, while the withdrawn funds are termed distributions. In most instances, a tax deduction is available for the tax year in which contributions are made, and all contributions, as well as the earnings and gains from contributions, accumulate tax-free until withdrawal. This means that not only do your initial contributions earn interest, but the interest you earn from those contributions also earns interest. This is known as compounding. Since the whole point of an IRA is to help you save for retirement, there is usually a tax penalty equal to 10% of your distribution if you withdraw funds before the age of 59. There are certain exceptions, like in the case of a distribution for certain medical expenses or for qualified expense of first time homebuyers, but for the most part, it s not in your best interest to withdraw funds early. Understanding the Different Types of IRAs There are five basic types of IRAs. Which one you choose will depend on a number of different factors, such as income bracket, employment situation and financial goals. > Traditional IRA This is a great choice for anyone who has earned income and does not participate in an employer s retirement plan. If you participate in an employer retirement plan, like a 401(k), you can still contribute to a traditional IRA, but the tax deductibility will be based on both your income and 401(k) participation levels. > SEP (Simplified Employee Pension) IRA Specifically designed for self-employed individuals and small business owners, this IRA allows for greater contribution limits than a traditional IRA. It also allows employers to make tax-deductible contributions on behalf of all eligible employees into separate SEP-IRA accounts. > Simple IRAs This IRA was specifically created for small businesses with fewer than 100 employers and allows for a portion of employees pre-tax compensation to be placed in the IRA. The employer can then choose to match those contributions. > Roth IRA Roth IRAs allow no tax deduction for contributions, but funds grow tax-free over time and are also tax-exempt at withdrawal. Unlike most IRAs, you are not required to take any distributions during your lifetime. Distributions can be passed on to your beneficiaries tax-free, although certain estate taxes may apply. Another advantage is the ability to make certain early withdrawals without penalty. > Rollover IRAs An IRA Rollover allows you to move assets from your employer's plan into an Individual Retirement Account (IRA) without penalty, so your retirement assets can continue to grow on a taxdeferred basis. Continued on page 6 Directions JAN/FEB 2008 4
TAKE CHARGE OF YOUR DEBT & Take Control of Your Financial Future From home mortgages and car loans to credit cards and student loans, almost everyone in today s society takes advantage of some form of credit from time to time. When utilized properly, credit can make your life easier and serve as a pathway to your dreams; however, when it s misused or overused credit can create a cascading avalanche of debt and turn your life into a financial nightmare. While accumulating a mountain of debt can seem to happen overnight, eliminating it generally will take significantly longer. So it s important to recognize your problem and deal with it as soon as possible. The longer you ignore your debts or shuffle them from one lender to another, the worse your situation will become. Recognizing the Symptoms of a Credit Crisis The symptoms of a credit crisis are simple to identify. Maybe you re receiving multiple calls from bill collectors or repeated Past Due notices in the mail. Perhaps you re borrowing from one lender to pay off another one or taking out cash advances on your credit cards to pay for daily living expenses. Or maybe you re making only the minimum payments on your credit cards, month after month, or falling behind on critical payments like your rent or utilities. If any of these scenarios sound familiar, you re probably in a credit crisis. While your situation can feel overwhelming, debilitating and embarrassing, it s certainly not unique. Millions of Americans find themselves in similar positions each year, and there are proven strategies for credit counseling and consolidation that you can utilize to take charge of your debt and take control of your financial future. A Credit Counselor Can Help While it s easy to recognize the symptoms of a credit crisis, it s more difficult to figure out how to deal with it. This is where a credit counselor can help. A credit counselor will examine your current situation and work with you to develop an action plan designed to eliminate your debt. As part of their service, credit counselors typically will contact your creditors on your behalf. If your creditors are confident that you re on the right track toward resolving your debt, they may agree to reduce or eliminate the interest or finance charges on your debt and waive any late-payment fees you may have accumulated. Another valuable service a credit counselor can provide is assistance in developing a weekly or monthly budget. Your budget will help you calculate how much money you need to live on, as well as how much you can afford to commit to paying off your debts. Your credit counselor also can help advise you on managing your money and provide access to resources designed to improve your money-management skills to ensure you have a road map to good credit in the future. Consider a Consolidation Loan Depending on the volume of debt you have and the interest rates you re facing, you may want to consider a consolidation loan to pay off your debt. A consolidation loan allows you to combine several smaller loans and/or credit accounts into one larger loan often with a lower interest rate than the original debt may have carried, as well as a lower total monthly payment. If you re considering a consolidation loan, shop around for the best interest rate and terms. You ll find a myriad of finance companies and other lenders pitching consolidation loans, but you ll probably get a much better deal at a bank or from a more reputable lender like a bank. If you own your own home, you also may want to explore the advantages of a home equity loan or line of credit to consolidate your debt. Address the Situation Before It Gets Worse If you do find yourself in a credit crisis, the worst thing you can do is to do nothing at all. It may be difficult to admit the fact that you re in over you head, but that s the first step toward rectifying the situation. Once you ve addressed your problem and developed a plan to deal with your debt, you ll feel better about yourself and you ll be on your way toward restoring your ability to use credit responsibly to help make your dreams come true. Directions JAN/FEB 2008 pnc.com 1-877-CALL-PNC 5
Continued from Page 4 The Benefits for You and Your Family The obvious benefits of IRAs are that they allow you to keep more of your money and earn more on your money as you plan for retirement. For your family, IRAs, especially Roth IRAs, could mean more opportunities now and more security in the future. With Roth IRAs, you can pass on your distributions to your spouse or beneficiary tax-free after your death, which makes this IRA an excellent tool to shield inheritances. Plus, if a Roth IRA owner dies and the spouse is the beneficiary and has a separate Roth IRA, the spouse may combine the two Roth IRAs into a single account without penalty. But you don t have to wait until retirement to use your Roth IRA contributions. Even before you are 59 1 2, you may withdraw up to the total of your contributions (except for conversion contributions) without penalty. You may also use up to $10,000 in earnings for qualified expenses on the purchase of a principal, first-time residence. In essence, Roth IRAs give you the option to actively use your earnings now to build your future. The First Step to Planning for Your Retirement You can increase your chances of a successful retirement by developing a plan and adhering to it with self-discipline. The best way to do this is by first consulting with a financial consultant. By working with you and analyzing your goals, a financial consultant can help you determine which type of strategy will work best for you. A good plan is one that balances sound investment based on your needs with the consideration of risks along the way, such as disability of you or a loved one. Your financial consultant can help you find this important balance so that you and your family can have security and peace of mind for the long road ahead. Important Investor Information: Securities and brokerage services are provided by PNC Investments LLC, member FINRA and SIPC. Annuities and other insurance products are offered by PNC Insurance Services, LLC a licensed insurance agency. BE CAREFUL Choosing a Credit Counselor A credit counselor can be invaluable in helping you develop a plan to deal with your debt, but be careful choosing one. The best credit counselors to work with are non-profit groups that provide services at little or no cost. But beware just because an organization says it s non-profit, doesn t mean its services are free or affordable. Many universities, military bases, credit unions, housing authorities and branches of the U.S. Cooperative Extension Service operate non-profit credit counseling programs. Your financial institution, local consumer protection agency and friends and family generally also are good sources of referrals. Once you ve developed a list of potential credit counseling agencies, check them out with your state Attorney General s office, your local Better Business Bureau and your local consumer protection agency. They can tell you if any consumers have filed complaints against the agencies and help you make a more informed selection. 2008 The PNC Financial Services Group, Inc. All rights reserved. FORM 126142 6