Plan Well to Live Well

Plan Well to Live Well
2014 Contribution Limits
When thinking about retirement, we all have different ideas. Some of us envision relaxing
on the beach…others get excited about time dedicated to volunteering…and there are
those who even think about a second career. Regardless of how you see your
retirement years, we all have one thing in common: we need to plan and save.
As a Cummins employee, you have five potential sources of future retirement income:
•Pension Plan
•Cummins Retirement and Savings Plan
•Personal Savings/Prior Employer Benefit
•Social Security
•Income While Working During Retirement
Your two most important resources come from the Power of 2 (Cummins + You) through the:
Pension Plan
Retirement and Savings Plan
providing future retirement income
that is funded entirely by Cummins
a great way to save for the future on a
pre-tax basis while earning matching
contributions from Cummins
The before-tax limit set by the Internal
Revenue Service (IRS) is $17,500.
If you’re age 50 or older any time
during the year, you can contribute
up to $23,000 on a before-tax basis.
Are You on the Right Track?
Saving – and planning – for retirement is not easy. It
takes focused effort throughout your working career.
Take this short quiz to see if you are on the right track.
1.A recent study by Aon Hewitt on Retirement
Income Adequacy indicates that you should aim
to save what multiple of pay to meet your
retirement income needs?
a. 4 times
b. 8 times
c. 11 times
The Pension Plan provides you with a guaranteed future benefit based on your pay and service with
Cummins. The plan is entirely funded by Cummins, with over $2 billion in total plan assets. And best
of all, it costs you nothing!
While this benefit is significant, it is only one of two retirement plans the company provides to help
you save for the future. Cummins also offers the Retirement and Savings Plan (RSP). Through this
plan, you can:
•Save for retirement by contributing a percentage of your pay on a pre-tax basis
(up to the IRS limits), reducing your current taxable income,
•Receive significant matching contributions from Cummins based on your
match formula, and
•Choose from a wide range of fund options to invest your account dollars.
To increase your contributions to the Retirement and Savings Plan (RSP), visit the Your Benefits
Resources™ Web site at yourbenefitsresources.com/cummins and click on “Change Contributions.”
You can also make changes by calling the Cummins Retirement Benefits Service Center at
1-800-682-8788. Customer Service Associates are available to assist you between 7 a.m. and 6 p.m.
Central Time, Monday through Friday.
d. 15 times
2.The same study shows what it means to be on
track for retirement. What multiple of pay should
you have saved to date to be on track by age 35,
age 55 and age 60?
a. 1.75 times
b. 7 times
c. 4 times
d. 9 times
3.What percentage of workers do you think are
on track to adequately meet their retirement
savings needs?
a. 5%
b. 18%
c. 12%
d. 23%
Answers: 1. C; 2. A for 35, B for 55, D for 60; 3. B