In Your Overall Portfolio...
Value funds can serve as a core holding in an overall portfolio, as a building block for investors just getting started with mutual funds, or as a way to enhance the
return potential of the stock portion of an existing portfolio.
For example, an investor who currently has a portfolio made up primarily of growth or index stock funds should consider using value funds to diversify -- spreading
risk among a variety of investment styles to take advantage of the cyclical nature of many investment styles.
Visit Owning Value to learn more about how they complement other investments.
Especially For Your Retirement Investments...
Many investors save for retirement through an Individual Retirement Account, or IRA, and/or a retirement plan administered by their employer, such as a 401(k) plan.
Whichever way you decide to invest for retirement, Oakmark is available.
IRAs can help your retirement savings grow by allowing earnings to compound tax-deferred or tax-free until you withdraw them. In addition, a continued
commitment through ongoing IRA contributions ensures that you'll take advantage of tax benefits every year.
Value funds can play an important role in your retirement portfolio. By diversifying to various investment styles, you can help your retirement savings stay on track.
Several IRA options:
You can open any of the following IRA accounts with Oakmark:
Traditional IRA - Investments grow tax-deferred and contributions may be tax-deductible, depending on your income level and whether you participate in an employer-sponsored plan.
Roth IRA - Unlike contributions to the Traditional IRA, Roth IRA contributions are not deductible. However, investments grow tax-deferred and qualified withdrawals are tax-free.
Rollover IRA - If you are changing jobs or retiring and have an employer-sponsored retirement plan, such as a 401(k), pension, or profit-sharing plan, you'll want to ensure that your investments maintain their tax-deferred status. A rollover IRA allows you to retain these tax advantages and investment control because you direct the assets to your investment of choice, such as stock mutual funds. By requesting that the assets be rolled directly into a rollover IRA--rather than taking a cash distribution--you avoid incurring taxes and penalties that could add up to 40% or more of your retirement savings.
SEP IRA - Generally used for self-employed individuals or small businesses, a SEP IRA is a company-funded retirement plan where employers can make deductible contributions directly to accounts established for employees (or themselves). Earnings accumulate on a tax-deferred basis, and contributions can vary each year or can even skip a year, since annual contributions by an employer are not required. Contribution limits are also generally higher than a Traditional or Roth IRA.
SIMPLE IRA - Companies with 100 or fewer employees have the option to establish a Savings Incentive Match Plan for Employees (SIMPLE) IRA. Contributions by employers are required, and the plan does not require a minimum level of employee participation. Employees are also allowed to make contributions to these accounts. SIMPLE IRAs are easy to set up and maintain.
What is an Education Savings Account?
An Education Savings Account (formerly an Education IRA) is not designed for retirement savings, but for an equally important goal: education. Contributions to an Education Savings Account are not deductible, but they grow tax-deferred and withdrawals are tax-free when used for elementary, secondary, or higher education expenses.
Under the current rules, you can invest up to $2000 per year per child (under age 18) to pay for certain education expenses. This includes tuition, books, supplies, and room and board for students enrolled more than half-time.
The money you invest in Education Savings Accounts does not count against the maximum you may invest in your other IRAs.
Eligibility to contribute to an Education Savings Account follows the same income guidelines as the Roth IRA.
