[DESCRIPTION: On screen text. NEXCOM. How to get the most out of your 401 (k) Plan. NEXCOM. Bob Clayton. Chief Human Resources Officer.] [AUDIO:] [ Music ] >> Hi. I'm Bob Clayton, a member of your NEXCOM HR team. If you're watching this, it means you're already in our 401(k) plan. So first of all, I want to say congratulations. You've taken a big step to saving for your future. But like any asset you own, you have to occasionally do some maintenance. You know it's funny, many of us will spend more time researching the features of a new cell phone than we do understanding the features of our investments. So that's the goal of this video. We want you to understand the very cool features of your 401(k) plan. Now we all know that we should be saving more money for our retirement, but it can be tough. There are bills to pay, food to put on the table. The hard part is coming up with an easy way to gradually beef up our savings. So the first feature that I want you to understand is called the Contribution Accelerator. [DESCRIPTION: Annual contribution increase by percentage.] [AUDIO:] All you need to do is schedule a date that you want to increase your contributions and the percentage of increase you want. That's it. When that date arrives, your contributions will increase automatically. For example, what many people do is to schedule an increase once a year after they receive a wage increase. Increasing your contributions by only 1% per year can lead to big gains over time. Remember if you need to, you can choose to opt out at any time. [DESCRIPTION: A line graph. Contribution Accelerator. On the horizontal axis, years in 5 year increments. On the vertical axis 401 (k) savings. Two lines of data. The Without Increase line starts at 0 and steadily gains, ending at 50 years. The 1 percent Increase line does the same but stays consistently higher than the previous line.] [AUDIO:] You don't have to make a lot of money to accumulate a nice nest egg. So if you haven't turned on the Contribution Accelerator, I encourage you to do so. Let's talk about another feature called automatic rebalancing. [DESCRIPTION: A feature for maintaining a balanced investment portfolio.] [AUDIO:] When was the last time you looked at how you were investing or allocating your money in a plan. I'm guessing it's been a while. A lot of folks enroll in a plan and don't think about it anymore. They set it and forget it. But this can be dangerous. Let's say that you choose to maintain a balance of 50% stocks and 50% bonds in your 401(k). Given the heated stock market, over time the percentage of your account allocated to stocks might grow to 70% or more, exposing you to additional risk if the stock market were to drop. See the problem here? The good news is that the 401(k) plan has a rebalancing feature. By switching on this feature your account would automatically sell stocks and buy bonds to return to its intended allocation. Think of it as a sell high, buy low feature. [DESCRIPTION: An animation. Starts with 50 percent Stocks and 50 percent Bonds. Shifts to 70 percent Stocks and 30 percent Bonds. After Rebalancing, slowly shifts back to 50 percent Stocks and 50 percent Bonds.] [AUDIO:] But the important thing is you have to switch it on. An even better approach to rebalancing your portfolio is take advantage of a great feature in our plan called GoalMaker, or investing in a Prudential Day One Fund. [DESCRIPTION: Disclosures: Keep in mind that application of asset allocation and diversification concepts does not assure a profit or protect against loss in a declining market. Regardless of your investment choices, it is possible to lose money to investing in securities. Remember, regardless of your investments selected you should continue to monitor your investments at least annually.] [AUDIO:] Both of these will invest in assets that meet your investment style and your age. You don't have to worry about making major decisions because the professionals managing the funds will automatically rebalance your money for you. If you're not familiar with these programs, you need to research these on our Prudential NEXCOM website or talk to your HR representative for more details. [DESCRIPTION: prudential.com/NEXCOM.] [AUDIO:] Now if you're 50 years or older, you have another great feature to our plan. Did you know that you can save an additional $6000 this year above and beyond the IRS annual maximum? This is called the catch-up provision. This number may change each year, but the concept remains the same. Oh, by the way, since we're talking about things to consider in managing your 401(k) investments, don't forget to update your beneficiary designations. For example, if you get married or divorced, have a child, or your beneficiary passes, update your information on file. Not to sound morbid, but if you die, there is nothing worse than putting additional stress on your family when they are most vulnerable because you forgot to update your beneficiaries. So if you really want to get the most out of your 401(k) plan, consider the Contribution Accelerator, the automatic rebalancing feature, moving your money into the GoalMaker or Prudential Day One Funds, and taking advantage of the catch-up provision if you are 50 or older. So before you upgrade your cell phone and download the latest app, take time to upgrade your 401(k) investments. You'll be glad you did. [DESCRIPTION: Learn more. Prudential.com/NEXCOM. 877-778-2100.]