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Schwab Retirement Planner® Q1. What can Schwab Retirement Planner do for me?
Q2.
What makes Schwab Retirement Planner different? Q3. Is there anything I need to do to begin using Schwab Retirement
Planner?
Q4. What if my life situation or retirement needs change? Q5. What investments are used in
Schwab Retirement Planner? Q6. How does Schwab Bank Savings
Work? Q8. What is Morningstar's role and relationship to Schwab? Q9. What are the costs of
Schwab Retirement Planner?
Q10. Who do I call if I have more questions?
Q1.
What can Schwab Retirement
Planner® do for me?
Q2. What makes Schwab
Retirement Planner different? A.
Schwab
Retirement Planner helps make it easier for you to save more for retirement by
offering a unique combination of services. You will be invested in exchange traded
funds that have low fund expenses2.
These
low expenses could lead to more in retirement savings. Your portfolio of exchange traded funds will be
constructed by a professional independent advisor as part of a low cost
discretionary management service. Schwab
Retirement Planner also provides safety and security for the cash preservation
portion of your portfolio through Schwab Bank Savings 3. With FDIC
protection up to $250,0004,
you can be sure that your cash deposits are secure and always working for you.
A.
No. There is nothing
you need to do to start enjoying the benefits of Schwab Retirement Planner. The
great thing about Schwab Retirement Planner is that it does the work for you.
From the start, your retirement savings and income target is calculated, your
investment mix is selected, and you’re on the way toward reaching your
retirement goal. If you choose, you can refine your savings and investment
strategy by providing additional details about your financial savings
situations. And Schwab professionals are there to help keep things simple
and hassle-free every step of the way. Q4. What if my life situation or retirement needs change?
A.
Every three months, your
investment mix is reviewed and fine-tuned, if needed, to stay on course with
your strategy. Once a year, your savings and investment plan is analyzed to
determine if you are still on track to reach your investment goals. Each time
your plan is reviewed, it is adjusted, if needed, to help keep you on track. If
you have changes in your life situation, retirement needs or personal such as
spouse or partner status, savings outside of your 401(k), or in your desired
retirement date, contact us to further fine-tune your strategy.
Q5. What investments are used in Schwab Retirement Planner? A.
Schwab Retirement Planner chooses among the fund choices selected by your employer for the Plan to determine a personalized investment strategy for you. These funds include exchanged traded funds that have low fund expenses2 and that may help you save more.
Q6.
How does Schwab
Bank Savings work?
A.
Schwab Bank Savings is a capital preservation feature available in Schwab Retirement Planner that provides safety and security for this portion of your portfolio. Through Schwab Bank Savings3,
a money market deposit account is established for your
plan at Schwab Bank. A money market deposit account is a type of savings
deposit.
Interest will be calculated and credited to your account each month. The
interest rate will be reflected on your statement and represents the rate
effective as of the last business day of the statement period.5
Funds deposited in the money market account are insured by the Federal Deposit
Insurance Corporation (FDIC) up to $250,000.5 With federal
insurance protection up to $250,000, you can be sure that your cash deposits
are secure and always working for you. To learn more about the Schwab Bank
Savings rate click here. A. If you have the time, and interest, and investment knowledge to manage your own retirement investment and saving strategy, you can choose to move out of Schwab Retirement Planner at any time and build your own investment portfolio from among the funds available in the plan. By selecting this manage on your own option, you are choosing to develop your own investment strategy and savings plan and also assuming responsibility for monitoring your portfolio regularly to adjust for changes in the market, as well as changes in your investment and risk profile. Visit the Manage on Your Own section of this website for more information.6
Q8.
What is
Morningstar's role and relationship to Schwab? A. Schwab Retirement Planner provides a participant level retirement savings and investment strategy, a major component of which is a discretionary managed service provided by Morningstar Associates, LLC ("Morningstar®"), an independent investment advisor. Morningstar creates discretionary managed portfolios using investment alternatives available in your plan. Morningstar will also;
Morningstar is not affiliated with or an agent of Charles Schwab & Co., Inc., Schwab Retirement Plan Services, Inc. or any of their affiliates. * Your plan provides an initial savings recommendation and Annual Savings Adjustment recommendation as part of your default Annual Savings Adjustment. Thereafter, Morningstar provides suggested savings rate which the participant has access to if they engage in a full interaction at which time they (the participant) can choose to accept or reject.
Q9.
What are the costs of Schwab
Retirement Planner? A The cost for Schwab Retirement Planner’s services is calculated based on your account balance. The cost generally is equal to less than ½ of 1% percent of assets a year. A typical participant with a balance of $50,000 will pay a cost of approximately $45 dollars for every $10,000 every year. In this example, that cost could be the price of lunch once a week at your favorite restaurant. See the chart below for a detailed break down of costs for the professional management you will receive. Total Assets in
Account Annual Cost % of Assets $0 to $150,000 0.35%
$150,001 - $250,000 0.30%
$250,001 and
above 0.25%
The cost is charged to compensate Schwab for providing the non-advisory services available in Schwab Retirement Planner and to compensate Morningstar for their professional investment management services. The service cost does not cover investment related expenses, such as the operating expense ratio (OER) or fees for plan administration, including recordkeeping, loans or distributions.
Q10.
Who do I call
if I have more questions? A. Call 800-724-7526 to speak with a Schwab Participant Services Representative.
Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons.
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1Schwab Retirement Planner® provides participants with a retirement savings and investment strategy, a major component of which is a discretionary investment management service furnished by Morningstar Associates, LLC , an independent registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Morningstar Associates creates discretionary managed portfolios based on human capital methodology using investment alternatives available in the plan. Morningstar Associates is not affiliated with or an agent of Schwab Retirement Plan Services, Inc. ("SRPS"), Charles Schwab & Co., Inc. ("CS&Co."), or their affiliates. Neither CS&Co., SRPS, nor their affiliates supervise, make recommendations with respect to, or take responsibility for monitoring the services provided to participants by Morningstar Associates. Schwab Advice Consultants, who are employees of CS&Co. and not of Morningstar Associates, facilitate participant access to the Morningstar Associates services, but do not provide investment advice or recommendations regarding the Morningstar Associates services or generally as part of Schwab Retirement Planner. Use of the term "personalized" in the context of the Schwab Retirement Planner service ("service") refers to the savings and investment recommendations made by Morningstar Associates and personal data that may be provided by the participant which will form the basis for Morningstar Associates’ allocation of the participant’s account assets in one of the discretionary managed portfolios and will result in a savings recommendation within the plan and outside of the plan. For plans that do not include a salary deferral feature, this fee based service does not include a savings recommendation within the plan; references to savings strategy, savings recommendation, and annual savings increases are not applicable to these plans. . My Retirement Progress™ services are also not provided for plans that do not include a salary deferral feature. Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market. There is no guarantee a participant's savings and investment strategy will provide adequate income at or through their retirement. Fees are charged for Schwab Retirement Planner, including its discretionary investment management service, based on the participant's account balance. Participants should carefully consider information contained in the materials furnished at their employer's direction regarding the services provided by Schwab and Morningstar Associates including information regarding compensation, affiliations and potential conflicts.
2Fund operating expenses represent the total of all a fund's annual fund operating expenses. Management fees are one component of the fund operating expenses. Exchange traded funds generally have low management fees because they don’t have to pay investment managers to actively manage underlying investments.
3Schwab Bank Savings is a money market deposit account ("MMDA") at Charles Schwab Bank. A MMDA is a type of savings deposit. Schwab Bank Savings is only available in select retirement plans administered by Schwab Retirement Plan Services, Inc.
4Funds deposited at Charles Schwab Bank are insured by the Federal Deposit Insurance Corporation
(FDIC). up to $250,000 when aggregated with all other deposits held by you in the same capacity at Schwab Bank. You are responsible for monitoring the total amount of deposits you hold with Schwab Bank, including any deposits held at Schwab Bank in an individual retirement account or in a self-directed employee benefit plan account, such as a Schwab Personal Choice Retirement Account®.
Because the deposit insurance rules are complex, you may want to contact the FDIC or use the FDIC’s online tool, Electronic Deposit Insurance Estimator
(www.fdic.gov/edie), to estimate your total coverage. 5Interest will be calculated daily and credited to your MMDA monthly. Interest is paid for a period that differs from the Statement Period, which is quarterly and can be found on your statement. Interest accrues from the day following the last Business Day of the month and is paid on the last Business Day of each month. Balances include interest paid as indicated on your statement. These balances do not include interest that may have accrued during the Statement Period after interest is paid. The interest paid may include interest that accrued in the prior Statement Period. A "Business Day" shall mean any Monday through Friday, excluding Federal Reserve Bank holidays.
The interest rate reflected on this statement is the interest rate effective as of the last Business Day of the Statement Period. The interest rate will be effective from the day following the last Business Day of the month until the last Business Day of the following calendar month. The interest rate will be posted on www.schwab.com/workplace by 4:00 p.m. Eastern on the last Business Day of the month. 6If you prefer to manage your retirement savings and investments on your own, you may choose to do so at any time by calling Schwab Participant Services at 1-800-724-7526 or by accessing the website at www.schwab.com/workplace. In such a case, you will not be receiving the low cost benefit of Schwab Retirement Planner.
Schwab Retirement Plan Services, Inc. provides recordkeeping and related services with respect to retirement plans. Schwab Retirement Plan Services, Inc., Charles Schwab Bank, and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products and services are offered by Charles Schwab & Co., Inc. (Member SIPC). Trust, custody and deposit products and services are available through Charles Schwab Bank.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, trading policies, charges and expenses. You can request a prospectus by calling Participant Services at 800-724-7526. You may also request a prospectus at www.schwab.com/workplace. Please read the prospectus carefully before investing. Remember that cost is only one consideration when making an investment decision. Investment returns and principal value of exchange traded funds will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Exchange traded funds are not without risk and an investor may give up the opportunity to outperform the market by not being in an actively managed fund. All exchange traded funds are subject to management fees and expenses. Investment
Products: Not FDIC Insured – No Bank Guarantee – May Lose Value ©2013 Schwab Retirement Plan Services, Inc. All rights reserved
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