Retire DON’T LET ANYTHING STAND IN THE WAY OF GETTING … · Retiresmart DON’T LET ANYTHING STAND IN THE WAY OF GETTING ON THE RIGHT PATH. Making your decisions. Everyone has

Retiresmart℠ DON’T L ET ANYTH ING STAND IN THE WAY

OF GETTING ON THE RIGHT PATH.

Making your decisions.

Everyone has different thoughts on investment strategies, long-term financial goals and risk tolerance. Selecting investments that best fit with your personal investment strategy is an important decision. We can help you determine your investing style and design a strategy to help reach your retirement savings goals.

▶ Investor Self-Assessment QuestionnaireThis questionnaire will help you determine your investing comfort zone and what type of investment mix might be best for your goals and objectives. Add up the points for each question and check your score on the following page to help you select your investment mix.

POINTS

1. Which hypothetical investment option would you choose?

FIRST YEAR RETURN POTENTIALGain (max) Chance of loss

a. 8% increase 0% 0

b. 20% increase 20% 2

c. 25% increase 33% 4

2. My main objective for my investment portfolio is to:

a. Avoid losses 0

b. Keep pace with the stock market 2

c. Outperform the stock market 4

3. If my $100,000 long-term investment dropped in value to $85,000 after one year and rose to $125,000 after two years, I would be:

a. Extremely uncomfortable – I would move 0 my money immediately to a lower risk investment to protect my gain

b. Slightly uncomfortable – I would move my 2 money to a lower risk investment to protect my gain

c. Comfortable – I would maintain 4 my investment

4. If I could potentially get a higher rate of return by accepting greater volatility in my portfolio, I would:

a. Accept a lot more volatility 4

b. Accept slightly more volatility 2

c. Not accept any more volatility 0

5. Below are five investment models with hypothetical maximum returns and maximum losses over a one-year period. I would feel most comfortable investing in:40%

30%

20%

10%

0%

-10%

-20%

42.05%

-14.39%-11.27%

-8.52% -5.18%-3.19%

35.22%

29.25%22.32%

17.00%

A B C D E

a. Portfolio A 4

b. Portfolio B 3

c. Portfolio C 2

d. Portfolio D 1

e. Portfolio E 0

What type of investor are you?

Good planning starts with a strategy. What’s yours?

1

6. If my $100,000 long-term investment declined in value during the first year, I would move it to a lower risk investment when it declined in value to:

a. $95,000 (loss of 5%) 0

b. $90,000 (loss of 10%) 1

c. $85,000 (loss of 15%) 2

d. $80,000 (loss of 20%) 3

e. I would not move it 4

7. A hypothetical $100,000 investment has the possibility of losing $10,000 in the first year. What is the minimum potential one-year gain you would accept given the possibility of loss for you to be comfortable with this investment?

a. $10,000 4

b. $25,000 3

c. $35,000 2

d. $45,000 1

e. I would not risk losing that amount of money 0

8. When attempting to achieve my investment goals:

a. I don’t want my portfolio to lose any value, 0 even if it will take longer to achieve my investment goals

b. I will tolerate small fluctuations in my 1 portfolio’s value

c. I will tolerate moderate fluctuations in my 2 portfolio’s value

d. I will tolerate large fluctuations in my 3 portfolio’s value

e. I will tolerate extreme fluctuations in my 4 portfolio’s value

Tally your results by adding the points from questions 1 through 8.

Your total _____________

Years to Retirement 0 – 3 POINTS 4 – 11 POINTS 12 – 22 POINTS 23 – 28 POINTS 29 – 32 POINTS

0–3 years Conservative Conservative Conservative Conservative Conservative

3–5 years Conservative Moderate Conservative

Moderate Conservative




Moderate Moderate Moderate


Moderate Moderate Aggressive Moderate Aggressive

12+ years Conservative Moderate Conservative

Moderate Moderate Aggressive Aggressive

▶ Investor self-assessment scoreFind your total score in the chart below, along with your retirement timeline, to see what type of investment mix may be best for you. This chart is only a guide. Please determine your own investing comfort zone.

Investor Self-Assessment Questionnaire is provided by Mesirow Financial Investment Management, Inc. (MFIM) a SEC-registered investment advisor. MFIM is not an affiliate or subsidiary of MassMutual.

The results of this questionnaire are intended to help you identify what your optimal asset allocation model may be. The questionnaire is not intended to provide a complete investment profile or to offer individual investment advice.

Good planning starts with a strategy. What’s yours?

2

No matter what type of investor you are, you should select the appropriate mix of asset classes that best suits your investing style, risk tolerance and your complete financial situation.

Here are five examples of risk-based investment mixes that you can use as a guide when selecting investment options. Learn more about the different asset classes on the following pages.

more risk/rew

ard po

tential

less risk/reward po

tential

ASSET CLASSES*

n Money market/ Stable value

n Bonds

n Large-cap stocks

n Mid-cap stocks

n Small-cap stocks

n International/ Global stocks

conservative

60% 20%

13% 2%5%

moderateconservative

48% 12%

24%4%2%

10%

moderate

34%

16%

33%

6%

6%

5%

moderateaggressive

25%

22%36%

9% 8%

aggressive

10%

28%

41%

11%10%

conservative


moderate

moderateaggressive

aggressive

Money market/stable value

Bonds

Large cap

Mid cap

Small cap

International/global

Conservative Model For investors with short-term investment horizons who want to minimize the potential for loss of value, and who are looking for stability of assets. This portfolio may have steady and more predictable returns than more aggressive portfolios. Investors should be willing to forgo the potential for higher long-term returns for stability. conservative

60% 20%

13% 2%5%


48% 12%

24%4%2%

10%

moderate

34%

16%

33%

6%

6%

5%

moderateaggressive

25%

22%36%

9% 8%

aggressive

10%

28%

41%

11%10%

conservative


moderate

moderateaggressive

aggressive


Bonds

Large cap

Mid cap

Small cap


Moderate Conservative Model For investors attempting to avoid a loss of assets in the short-term, with a secondary objective of seeking a higher return over the long term to mitigate the effects of inflation. The portfolio may have some relative stability, but in order to combat inflation, some fluctuations in the portfolio should be expected.

conservative

60% 20%

13% 2%5%


48% 12%

24%4%2%

10%

moderate

34%

16%

33%

6%

6%

5%

moderateaggressive

25%

22%36%

9% 8%

aggressive

10%

28%

41%

11%10%

conservative


moderate

moderateaggressive

aggressive


Bonds

Large cap

Mid cap

Small cap


Moderate Model For investors who are equally concerned with balancing their level of risk and return. They look to have returns in excess of inflation and increased value over the long term. Should be willing to accept short-term losses and fluctuations in portfolio value.

conservative

60% 20%

13% 2%5%


48% 12%

24%4%2%

10%

moderate

34%

16%

33%

6%

6%

5%

moderateaggressive

25%

22%36%

9% 8%

aggressive

10%

28%

41%

11%10%

conservative


moderate

moderateaggressive

aggressive


Bonds

Large cap

Mid cap

Small cap


Moderate Aggressive Model For investors with a longer time horizon. While their portfolio will typically have a higher-than-average volatility, it may provide for the potential of higher-than-average returns over the long term. Investors should be willing to accept short-term losses and less stable returns.

conservative

60% 20%

13% 2%5%


48% 12%

24%4%2%

10%

moderate

34%

16%

33%

6%

6%

5%

moderateaggressive

25%

22%36%

9% 8%

aggressive

10%

28%

41%

11%10%

conservative


moderate

moderateaggressive

aggressive


Bonds

Large cap

Mid cap

Small cap


Aggressive Model For investors who are willing and able to stay the course through short-term volatility and want the potential for high portfolio returns over the long term. They should have a long time horizon and a high tolerance for risk, as frequent short-term losses and extreme volatility are to be expected.

Asset Allocation modeling offered by MFIM. MFIM is an SEC registered investment advisor and is not an affiliate or subsidiary of MassMutual.

* MFIM created these risk-based asset allocation models using the following six asset classes: Money market/Stable value (cash equivalent/principal focused-extended duration), Bonds (intermediate-term domestic bonds), Large-cap stocks (large-cap blend domestic equity), Mid-cap stocks (mid-cap blend domestic equity), Small-cap stocks (small-cap blend domestic equity), International/Global stocks (large-cap blend foreign equity).

These models are being used for guidance as Mesirow doesn’t populate them with actual funds or act as an investment manager. You, as the Plan Sponsor, are responsible for determining whether the Standard Models are appropriate for the Participants in your Plan. You acknowledge that MassMutual and MFIM have not been appointed and have not agreed to act as a fiduciary to the Plan with regards to Standard Models.

A wide range of investment mixes

3

Your retirement plan offers a variety of investment choices, covering a range of risk levels and investment objectives. Below are descriptions of the possible asset classes (or investment categories) that you can have in your investment mix.

n Money market/Stable value investments

These short-term investments are designed to provide a steady rate of return, greater investment stability, and a relatively lower level of risk. Although the portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money in a stable value investment, and the yield will fluctuate with changes in market conditions. Over time, these investments have provided lower returns than stock or bond funds. Investments in a money market account are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

n Bonds

Bonds represent “loans” investors make to corporations, governments or agencies and are designed to provide stability, income, and some appreciation in value. If held to maturity, bonds offer a fixed rate of return and a fixed principal value. Bonds generally offer a potentially higher return than money market/stable value investments and a lower return

than stocks. The value of bonds usually fluctuates less than stocks. However, corporate bonds, U.S. Treasury bills, and government bonds will fluctuate in value, and the return of principal is not guaranteed if sold before maturity.

n Balanced investments

Balanced investments consider the risk and return potential of each asset class and invest a percentage of assets in both stocks and bonds, along with a small amount in stable value investments for liquidity.

You’ve got options

Asset allocation is the strategy of spreading your risk by investing specific percentages of

your retirement dollars in a combination of the different asset classes, such as stocks,

bonds, and/or cash. Asset allocation doesn’t protect against loss in a declining market.

4

n Large-cap* stocks

Large-cap stocks are shares in large, financially established “blue chip” companies with a market cap of over $10 billion. The goal of these investments is the long-term growth of capital. Risk and return are typically moderate to high.

n Mid-cap* stocks

These shares in companies in the $2 billion to $10 billion market cap range seek long-term growth. Since mid-cap stocks may fluctuate more widely than the more stable large-cap stocks, there is a potential for greater long-term growth as well as higher risk.

n Small-cap* stocks

Small-cap stocks represent companies with a market cap of $300 million to $2 billion. Over long periods of time, small-cap stocks have had higher returns than large-cap stocks, which makes them attractive to aggressive investors. At the same time, they are much more volatile and have higher short-term risk.

n International stocks

Investments in stocks issued by foreign businesses provide investors with potential long-term growth of capital while helping to diversify their portfolios. Foreign stocks may offer greater returns than U.S. investments but also involve higher risks relating to interest and currency exchange rates, securities regulation, and taxes, as well as unstable economic or political conditions. International stocks fluctuate in value and may be worth more or less than their original cost. Global investments have assets in both foreign and U.S. stocks.

n Specialty stocks

Specialty investments are concentrated in a specific area of the market, such as technology or health care. Because they are focused on a small market segment, these investments tend to have both a higher risk and higher potential for return than more diversified investments.

n Stocks

Stocks represent part ownership in a business and are meant to provide long-term growth by increasing in value. Some stocks also provide dividend income. Historically, stocks have outperformed other types of investments over the long term. However, stocks fluctuate in value more than money market/stable value investments or bonds, and when sold may be worth more or less than their original cost. Keep in mind that you can’t predict future results based on how the market performed in the past.

Diversification is the strategy of minimizing your risk by investing in multiple categories within broader asset classes.

Diversification doesn’t protect against loss in a declining market.

All investments possess some element of risk, including possible loss of principal. Past performance is no guarantee of future results.

* The term “cap” is short for market capitalization, which is calculated by multiplying the price of a stock by the number of outstanding shares. Generally speaking, this represents the market’s estimate of a company’s value.

▶ Rebalance to maintain good alignmentOver time, gains in one type of investment and losses in another could result in your portfolio becoming out of balance, or invested in proportions that don’t match up with your goals. By regularly rebalancing your portfolio – that is, shifting some of the assets in your portfolio from investments that have grown to invest-ments that have fallen behind — you can help ensure that you are taking on the level of investment risk that you intended.

Your investing style and goals will probably change as you enter new life stages and get closer to retirement. By giving your account an annual checkup, you can assess whether the decisions you made yesterday are still right for you today.

You’re in control

Finding the right fit. After you’ve determined your investing style, please review the

investment options with your financial professional to select the ones that best fit your

life today and tomorrow.

RS1788 914 C:32032-00

© 2014 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001. All rights reserved. www.massmutual.com. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) [of which Retirement Services is a division] and its affiliated companies and sales representatives.

The examples are illustrations to help you choose an investment program that is most appropriate for you. Allocations may vary. These are only samples for long term, total return-oriented investors without considering tax consequences. The use of an asset allocation approach does not guarantee a profit or protect against a loss in declining markets. You should discuss your individual situation with your financial professional to find the right balance between risk and potential reward.

In applying particular asset allocation models to individual solutions, participant or beneficiaries should consider their other assets, income and investment (e.g., equity in a home, IRA investments, savings accounts, and interests in other qualified and non-qualified retirement plans) in addition to their interests in this plan.

Asset Allocation Modeling offered by Mesirow Financial Investment Management, Inc. (MFIM), an investment advisor registered with the SEC and is not an affiliate or subsidiary of MassMutual. The information contained herein is intended for informational purposes only and has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. Any opinions expressed are subject to change without notice. It should not be assumed that any recommendations incorporated herein will be profitable or will equal past performance. MFIM does not provide legal or tax advice. Mesirow Financial refers to Mesirow Financial Holdings, Inc. and its divisions, subsidiaries and affiliates. The Mesirow Financial name and logo are registered service marks of Mesirow Financial Holdings, Inc. ©2013, Mesirow Financial Holdings, Inc. All rights reserved.

Retire DON’T LET ANYTHING STAND IN THE WAY OF GETTING … · Retiresmart DON’T LET ANYTHING STAND IN THE WAY OF GETTING ON THE RIGHT PATH. Making your decisions. Everyone has

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