Putnam Individual 401(k)

A low-cost, full-service plan that helps self-employed individuals make the most of their retirement savings
The opportunity
The Putnam Individual 401(k) is a low-cost, full-service plan with high contribution limits that is easy to administer and offers substantial benefits over traditional retirement plans.

The benefits
Employer/owners may contribute up to $50,000 in 2012, depending on their compensation, by making 1. Salary deferrals of up to $17,000, not to exceed 100% of compensation; or 2. Company contributions of up to 25% of compensation (or up to 20% of self-employment income). Catch-up contributions up to $5,500 (for a total contribution of up to $55,500 for 2012) can be made by those age 50 and older. Choose to save pretax or after-tax with the plans Roth 401(k) feature. Roth 401(k)s can also be rolled over into Roth IRA accounts, where annual minimum distributions are not required. Taxes on contributions and earnings are deferred until withdrawn. Withdrawals prior to age 59 may be subject to an additional 10% tax. Flexible plan prototype: The plans seamless amendment process makes it easy to include additional employees when a company grows. Additional administrative responsibilities, contribution obligations, and service fees may apply. Rollover contributions are allowed from the following plans: SEP, SARSEP, SIMPLE IRA (after two years), Traditional IRA, Rollover IRA, Keogh, 401(k), 403(b), and 457 (governmental only). Loans are available through the plan. The plan will accept contributions that are submitted online via the ACH (automated clearinghouse) method or that are made by check.

The prospects
The plan is available to businesses that employ owners and their spouses only. This includes incorporated and unincorporated businesses, such as sole proprietors, partnerships, and corporations. Consider these prospects: Consultants Lawyers Accountants Doctors Electricians Programmers

Compare IndIvIdual 401(k) hIgh ContrIbutIon lImIts to other popular plans business owners 2012 wage $25,000 50,000 100,000 150,000 200,000 sImple Ira $12,250 13,000 14,500 16,000 17,500 sep Ira $6,250 12,500 25,000 37,500 50,000 Individual 401(k) $23,250 29,500 42,000 50,000 50,000

Source: Putnam Research based on 2012 IRS limitations. Chart assumes compensation is W-2 income. Lower limits may apply to SEP and Individual 401(k)s where compensation constitutes selfemployment income. Chart also assumes no catch-up contributions are made. SIMPLE IRA contribution amounts reflect a 3% match formula. Lower limits may apply if wages constitute self-employment income.

Competitive value
One-time setup fee: $75 Annual administrative fee: $100 (waived when plan assets reach $100,000) Loan setup: $75 (if applicable) Annual loan maintenance: $50 (if applicable) Signature-ready 5500 (optional): $250, available without the use of a third-party administrator

Additional resources
Visit our website at putnam.com/advisor for these tools, or call the Putnam Individual 401(k) Hotline at 1-866-207-7261. Plan Comparison Guide: Compare features of Individual 401(k), SEP, SIMPLE, and full-service 401(k) plans Worksheets, calculators, and investor education literature to help you establish a retirement savings plan

Flexible investments
The plan offers a broad range of investment choices, including over 60 Putnam funds, as well as funds from other leading fund families.

Call the Putnam Individual 401(k) Hotline at 1-866-207-7261 to learn more.

This information is not intended as tax or investment advice. You should consider how this information would apply to your clients particular circumstances when giving advice.

Supported by award-winning service

User-friendly website, putnam.com, featuring online functions that include contributions, investment allocations and reallocations, distributions, loans, payroll functions, reporting, and testing DALBAR award-winning service, including a toll-free hotline staffed by retirement plan experts

Use this worksheet to make sure you are maximizing tax deductions with your retirement plan.
Your annual compensation*: $
sep Ira salary deferral not available on sep sImple Ira lower of 100% or $11,500 Individual 401(k) lower of 100% or $17,000

$0
Company contribution or match up to 25% of compensation or 20% of self-employment income

$
2% of compensation or dollar for dollar of salary deferral up to 3%

$
up to 25% of compensation or 20% of self-employment income

$
subtotal Catch-up contribution (if over age 50) total

$ $
up to a maximum of $2,500

$ $
up to a maximum of $5,500

$
not available on sep

$0 $

$ $

$ $

1Maximum compensation for 2012 is $250,000. Compensation is defined as the total of wages, tips, and other compensation as reported on Form W-2 or, for self-employed individuals, your net earnings from self-employment before subtracting any contributions to a salary deferral program. 2Maximum employer contribution for a SIMPLE IRA for 2012 is $5,000, using the 2% nondiscretionary formula.

Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, call your financial representative or call Putnam at 1-800-225-1581. Please read the prospectus carefully before investing.
Putnam Retail Management

Putnam Investments | One Post Office Square | Boston, MA 02109 | putnam.com

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