Retirement Plans For Small Businesses

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  • 1. RetirementPlans forSmall Businesses Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. Peter G Langelier Registered Representative Great American Advisors, Inc.

2. 45% retirement plan Onlyof companies with99employees or less offer a

  • Source of data: National Compensation Survey:Employee Benefits in Private Industry of the United States, March 2007,U.S. Department of Labor, U.S. Bureau of Labor Statistics, August 2007

PageRE0000.191.1208 3. Future Realities

  • Increasing life expectancy
  • Rising health and long-term care expenses
  • Decreasing government benefits
  • Steady inflation

PageRE0000.191.1208 4. ...that prevent business owners from establishing a retirement plan. Three Myths...

  • My business will subsidize my retirement.
  • I cant afford a plan.
  • Employees want money, not benefits.

PageRE0000.191.1208 5. My business will subsidize my retirement. Myth#1

  • Fact:
  • Relying on a single venture is risky

PageRE0000.191.1208 6. Factors that May Affectthe Value of Your Business

  • Unexpected hardship
  • Economic downturn
  • Decrease in the market valueof your business

PageRE0000.191.1208 7. I cant afford a plan. Myth#2

  • Fact: Todays plans are:
  • Affordable
  • Flexible
  • Simple
  • Just as advantageous

PageRE0000.191.1208 8. Employees want money, not benefits. Myth#3

  • Fact:
  • Employees are increasingly concerned about retirement benefits

PageRE0000.191.1208 9.

  • 1.*Withdrawals prior to age 59 may be subject to a penalty tax in addition to ordinary income taxes.
  • Postponement of taxes on contributions and earnings until withdrawal 1
  • Control over the investment of your account

Whats in it for you? PageRE0000.191.1208 10. 1.This hypothetical example is not intended to show the performance of any Oppenheimer fund, for any period of time, or fluctuations in principal value or investment return. 2. Retirement assets are taxed when withdrawn. Withdrawals prior to age 59 may be subject to a penalty tax in addition to ordinary income taxes. Whats in it for you? The potential for accelerated growth of savings due to tax-deferred compounding The illustration here shows how much faster money can grow in atax-advantaged retirement plan relative to a comparable investmentin a non-tax-favored vehicle. Assumes $100 of salary saved per month,8% rate of return, 20-year savings period 1 . PageRE0000.191.1208 $59,308 $43,696 $32,759 $27,713 Retirement Plan 2 15% Tax Bracket 28% Tax Bracket 35% Tax Bracket 11. PageRE0000.191.1208 Total return for a particular period is the ending redeemable value of the initial investment at the end of the period shown, assuming reinvestment of all income during the period annually. Actual returns on any particular investment will depend on the particular market factors and risks applicable to that investment. A diversified portfolio does not guarantee greaterreturns than a nondiversified portfolio. Diversification through Mutual Funds

  • Nondiversified Portfolio
  • Employees are increasingly concerned about retirement benefits

Whats in it for you? Diversified Portfolio 1.This hypothetical example is not intended to show the performance of any Oppenheimer fund, for any period of time, or fluctuations in principal value or investment return. 2. Retirement assets are taxed when withdrawn. Withdrawals prior to age 59 may be subject to a penalty tax in addition to ordinary income taxes. $100,000 Initial Investment $265,329 Total Return $100,000 placed in a single investment earning 5% a year for 20 years with no other changes to principal The same $100,000 split into five $20,000 investments, each earning a different rate of return (in one case showing a loss), for thesame 20-year period $100,000 Initial Investment $534,946 Total Return $327,331 15% Return $134,549 10% Return $53,066 5% Return $20,000 0% Return $0 $20,000 Lost 12. Your Asset Allocation Mix

  • Stocks
  • Global/International
  • Small-Mid Cap
  • Large-cap Growth
  • Large-cap Value
  • Bonds
  • High Yield Bond
  • Aggregate Bond
  • Cash
  • Cash Equivalents

Conservative Moderate Aggressive 0 5 Years(Short- term) 6 10 Years (Immediate-term) 10+ Years(Long-term) Time Horizon Risk Tolerance 10% 10% 40% 40% 5% 5% 10% 10% 35% 35% 10% 10% 10% 5% 40% 25% The sample portfolios are not intended to represent investment advice that is appropriate for all investors. This material does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed.Each investor's portfolio must be constructed based on the individual's financial resources, investment goals, risk tolerance, investing time frame, tax situation and other relevant factors. Because each investors financial needs, goals and risk tolerance are different, you should work with your financial advisor to determine whether any of these funds are appropriate for you. The categorization of sample portfolios as Conservative, Moderate and Aggressive is relative. OppenheimerFunds does not recommend any specific asset allocations.10% 5% 10% 10% 5% 30% 30% 15% 5% 15% 20% 5% 25% 15% 20% 10% 15% 20% 5% 20% 10% 15% 5% 15% 20% 5% 20% 20% 25% 15% 15% 20% 25% 30% 15% 25% 30% 13.

  • Employer contributions are atax-deductible business expense
  • Low-cost way to add a major incentiveto your benefits package
  • Provides flexibility and control

Whats in it for your business? PageRE0000.191.1208 14.

  • 1.Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.

Whats in it for your business?

  • Postponement of taxes on contributionand earnings until withdrawal
  • Control over the investment of their accounts
  • Potential for accelerated growth of savingsdue to tax-deferred compounding
  • Diversification
  • Asset allocation 1
  • Added peace of mind

PageRE0000.191.1208 15. Ive Already Got a PlanWhy Change?

  • Your situation might call for a new plan
  • Youre ready for the enhanced service, broader options and the experienced investment management that OppenheimerFunds provides

PageRE0000.191.1208 16. Which Retirement PlanIsBestfor My Business?

  • SIMPLE IRA
  • SEP IRA
  • Payroll Deduction IRA
  • 401(k)
  • Safe Harbor 401(k)
  • Single K Plan SM
  • Profit sharing
  • Non-traditional Profit-sharing plans
  • Defined Benefit
  • Non-qualified Deferred Compensation

PageRE0000.191.1208 17. Comparing Plan Types Maximum Annual Contributions 2009 Figuresdo notinclude Catch-up contributions (where otherwiseapplicable) PageRE0000.191.1208 Compensation SIMPLEIRA SEPIRA Single K Single DBPlus $40,000 $12,700 $10,000 $26,500 $100,000+ common(depends on income, age, years to retirement)Annual benefit as high as $195,000 $80,000 $13,900 $20,000 $36,500 $120,000 $14,100 $30,000 $46,500 $196,000 $17,380 $49,000 $49,000 18. SEP IRA Payroll Deduction IRA 401(k) Non-traditionalProfit-sharing plans Profit-sharing Safe Harbor 401(k) SIMPLE IRA Defined Benefit Non-qualified Deferred Comp. The Savings Incentive Match Plan is for...

  • Businesses with 100 or fewer eligible employees that do not maintain another retirement plan
  • Individuals with self-employment income earned on a part- or full-time basis
  • Nonprofit organizations (includinggovernment entities)

SIMPLE IRA Single K Plan SM PageRE0000.191.1208 19.

  • Mandatory employer contributions; several funding options
  • Employees can also make pretax salary deferrals equal to the lesser of $11,500 or 100% of compensation for 2009
  • Participants age 50 and older can make catch-up contributions equal to $2,500

SIMPLE IRA SEP IRA Payroll Deduction IRA 401(k) Non-traditionalProfit-sharing plans Profit-sharing Safe Harbor 401(k) SIMPLE IRA Defined Benefit Non-qualified Deferred Comp. Single K Plan SM PageRE0000.191.1208 20. Two ways for employers to fund it

  • Dollar-for-dollar match of participants contributions, up to 3% of compensation
  • May be reduced to a minimum of 1% in any two years out of a five-year period

SIMPLE IRA SEP IRA Payroll Deduction IRA 401(k) Non-traditionalProfit-sharing plans Profit-sharing Safe Harbor 401(k) SIMPLE IRA Defined Benefit Non-qualified Deferred Comp. Single K Plan SM PageRE0000.191.1208 21. Two ways for employers to fund it

  • Or
  • Non-elective 2% contribution of each eligible employees compensation, regardless of whether the employee makes deferrals to the plan

SIMPLE IRA SEP IRA Payroll Deduction IRA 401(k) Non-traditionalProfit-sharing plans Profit-sharing Safe Harbor 401(k) SIMPLE IR