ABC Company 123 Main Street Anywhere, US 12345 000001 Jane Sample 1 Western Avenue Albany, NY 12203 Reviewing your asset allocation Asset allocation is how you invest the money in your retirement account among different asset classes, such as stocks, bonds, and cash equivalents. It is a powerful strategy for managing risk. In fact, asset allocation may account for up to 90% of investment performance.* Jane Sample, when you joined ABC Company's plan, you selected an asset allocation strategy. It is important to review this strategy to make sure it matches your current financial goals. We have created this personalized portfolio review to help you stay on track to your retirement objectives. Consider your strategy When reviewing your asset allocation strategy, it's important to consider three factors: Your retirement goals. Taking a look at your total financial picture and your long-term goals can help inform your allocation decisions. Your time horizon. Knowing the number of years before you need to begin withdrawing money from your retirement account is important. Your risk tolerance. Understanding your comfort with investments that may fluctuate in value can help you make wise choices. * "Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?" Ibbotson and Kaplan, Financial Analysts Journal (Jan/Feb 2000). Important information about Jane Sample's asset allocation strategy. Take the investor profile quiz The quiz below will help you see if your tolerance for investment risk has changed and will allow you to compare your current contribution allocation against a sample that matches your investor profile. Just follow the five simple steps below to make sure your retirement allocation stays on track. Select the sample asset allocation bar that matches your investor profile. These sample allocations represent investor profiles appropriate for investors in your age range. Sample asset allocations What to look for You have both a contribution allocation and a portfolio allocation. Your contribution allocation is how your deferral dollars are being invested when they are received by the plan provider. Your portfolio allocation is how your retirement money is actually divided among different classes of investments at a given point in time. When you first started making contributions, there was no difference between your contribution allocation and your portfolio allocation. But time may have changed that. For example, as your life circumstances change or as your investment knowledge grows, you may wish to change how money from your paycheck goes into the investments in your account (your contribution allocation). Or different investments in your portfolio may have grown at different rates. Result? Your actual portfolio allocation may be different from your target portfolio allocation. What to do Compare your contribution and portfolio allocations to the sample asset allocation above. Your plan statement will give you the information you need to make this comparison. If you find that your allocations have changed, you may need to rebalance your portfolio. Turn the page to learn how. Asset allocation is a valuable tool for managing risk. Some experts suggest it may account for up to 90% of investment performance. Rebalancing your portfolio Consolidating your retirement accounts can make asset allocation easier. Many people consider rebalancing if their portfolio is out of balance by more than 10%. To rebalance, you might want to start by transferring small amounts from the asset class that is overfunded to those that are underfunded. Consider doing this gradually to protect against any sudden change in the market. Do it on a regular basis until your portfolio matches your preferred asset allocation. Consolidate your other retirement accounts Rolling over your money from other retirement accounts into your current retirement savings can help you manage your asset allocations more conveniently. One account can make it easier to ensure that your money is properly allocated and that your retirement plan stays in balance. Consolidation also supplies all of your portfolio information on one statement, so you can see your retirement savings information at a glance. Take action today Congratulations, Jane Sample! You've determined your current investor profile and started to review your asset allocation strategy. To adjust your contribution allocation or rebalance your portfolio, of if you have any questions about consolidating retirement accounts, please contact your HR manager. Or call 800-123-4567. You can also learn more information about asset allocation online at www.sampleabccompany.com.