Form No. 4923-CA (0905)

JL Waite Financial GroupJL Waite Financial Group

Fewer than 30 or30 Years More Years

Age of Service of Service

50 1.1% 1.3%55 1.4% 1.6%**60 2.0% 2.2%**

61½ 2.2% 2.4%63 2.4% 2.4%

Retirement Benefit Factors*

Retirement FormulaYears of Service x State Factor = % of Highest One Year Income if at least 25 years of credited service

*Hire date after July 1, 1980. **With early retirement reductions.

Plan Example(2.4 Percent)

A member, age 63, retiring with 30 years of service and compensation of $70,000, would receive a retirement benefit computed : (.024 x 30 x $70,000) = $50,400 ÷ 12 = $4,200 per month. + longevity bonus*

*Estimate of retired teacher in CA.

Plan Member Spouse

Unmodified $4,425 $0100% $3,713 $3,71375% $3,885 $2,91450% $4,108 $2,054

CalSTRS Retirement Options

Based on… 63 yr old with 30 yrs of service and $70,000 salary

Income Gap

$70,000

BeginWorking

Retireat 63

28% Net Loss ofSpendable Income

$50,400Teacher Retirement

Income

Income Gap

$126,428*Income needed in 20 years

$70,000

BeginWorking

Retireat 63

*Assumes a 3% inflation factor

28% Net Loss ofSpendable income

$50,400Teacher Retirement

Income

Retirement ProgramEnacted by Congress

403(b)One of the most effectivefinancial planning tools

available today.

Why People Do NotParticipate in a 403(b)

Lack of Understanding.

Viewed As A CostRather Than A Benefit.

Belief That The Money Will Not Be Accessible.

Taxes and the Discounted Dollar

Gross ?— Taxes: 28% ?

Net $250

Taxes and the Discounted Dollar

Gross $347— Taxes: 28% $97

Net $250

Taxes and the Discounted Dollar

Over 20 years assuming a 6% rate of return, the accounts grew to…

Taxable $113,911Tax-Deferred $158,109

The Tax-Deferred account has over $44,000 more than the Taxable account, over a 38% increase.

A Special Feature ofthe 403(b) Program

LoansAccessible Prior to Retirement

Tax and Penalty Free*2% Net Interest Cost**

Five-Year Payback (Monthly)or, up to 30-year if primary residence

* Non-payment may result in a tax liability.** On Traditional Fixed Annuities.

Meet Your FinancialObjectives With a 403(b)

Pay Off DebtBuy Back Years of Service

Home PurchaseCollege Education

Pre-Tax ContributionEmergency Fund

Bridge The Retirement Gap

Bridging the Income Gap

BeginWorking

Retireat 63

$70,000

$50,400Teacher Retirement

Income

403(b)Income

Three Obstacles toFinancial Security

TAXES, INTEREST, and DEBT

How much of your money goes toward one, two, or all

three of these areas, hindering your progress to achieve

financial security?

How to Get Out of Debt

Using Your 403b

Month 0Debts Balance Payment Rate Term

(1) Credit Card $ 2,200 $ 66/m 16.8% 45 months

(2) Credit Card 1,350 38/m 19.8% 46 months

(3) Auto #1 7,200 240/m 12.6% 36 months

(4) Auto #2 2,600 226/m 10.75% 12 months

$ 13,350 $572/m

Assets403(b): $3,500 + $50 per month

Month 1

(1) Credit Card $ 2,164 $ 66/m 16.8% 44 months

(2) Credit Card 1,332 40/m 19.8% 45 months

(3) Auto #1 7,035 240/m 12.6% 35 months

(5) 403(b) Loan 2,563 52/m 2% 60 months

Totals $ 13,094 $398/m

Assets403(b): $3,806 + $291 per month

Debts Balance Payment Rate Term

Month 4

(1) Credit Card $ 2,056 $ 66/m 16.8% 40 months

(3) Auto #1 6,531 240/m 12.6% 31 months

(4) Auto #2 0 0 0 0

(5) 403(b) Loan 3,727 79/m 2% 60 months

Totals $ 12,314 $385/m

Assets403(b): $4,751 + $308 per month

Debts Balance Payment Rate Term

Month 11

(2) Credit Card 0 0 0 0

(3) Auto #1 $ 5,293 $240/m 12.6% 24 months

(4) Auto #2 0 0 0 0

(5) 403(b) Loan 5,123 122/m 2% 60 months

Totals $ 10,416 $362/m

Assets403(b): $7,181 + $340 per month

Debts Balance Payment Rate Term

Month 19

(1) Credit Card 0 0 0 0

(2) Credit Card 0 0 0 0

(4) Auto #2 0 0 0 0

(5) 403(b) Loan $ 8,241 $231/m 2%

Totals $ 8,241 $231/m

Assets403(b): $10,378 + $522 per month

Debts Balance Payment Rate Term

Let’s Take a Look After 19 Months

Before

Total Debt 13,350

Payment 572

Average Interest 13.4%

Total 403(b) 3,500

Contribution 50

Let’s Take a Look After 19 Months

Before NowTotal Debt 13,350 8,241 [403(b)]

Payment 558 231

Average Interest 13.4% 2% [Net]

Total 403(b) 3,500 10,378

Contribution 50 522

Let’s Take a Look After 60 Months

Before

Total Debt 13,350

Payment 572

Average Interest 13.4%

Total 403(b) 3,500

Contribution 50

Add to Take-Home 0

Let’s Take a Look After 60 Months

Before NowTotal Debt 13,350 0

Payment 558 0

Average Interest 13.4% 0

Total 403(b) 3,500 36,003

Contribution 50 833

Add to Take-Home 0 24 + All Raises

How to Maximize Your Pension Benefits

Plan Member Spouse

Unmodified $4,425 $0100% $3,713 $3,71375% $3,885 $2,91450% $4,108 $2,054

CalSTRS Retirement Options

Most educators choose the 100% option. In this example, $3,713 would go to the member, and $3,713 would go to the spouse in the event of the member’s death

Plan Member Spouse

Unmodified $4,425 $0100% $3,713 $3,71375% $3,885 $2,91450% $4,108 $2,054

CalSTRS Retirement Options

With proper planning, you could choose a higher pension option.By choosing this higher option, your household will receive more than $150,000 in additional income over 25 years.

Plan Member Spouse

Unmodified $4,425 $0100% $3,713 $3,71375% $3,885 $2,91450% $4,108 $2,054

Spousal Loss of Income

The challenge with the member choosing the higher pension option is the spouse’s loss of income. In this example, $3,713 - $2,054 is $1,659 monthly loss of income. Solution: a $330,000 side fund could bridge this short fall. $330,000 invested at 6% yields $19,800 annually / 12 = $1,650 of monthly income for the surviving spouse.

Benefits of Pension Maximization

• Maximize your retirement income.• Provide continued income to your beneficiary.• Receive raises on higher pension options.• Maintain control over your retirement dollars instead of STRS having control.• Cash availability for other contingencies.• Provide a legacy to your estate

There have been two 40% losses in the stock market in the last 10 years…

CAN YOU AFFORD A THIRD?

$2.3 Trillion Lost in Retirement Savings Plans in 2008!

YOU have a choice of a safe and secure place to save for retirement that provide guarantees from loss of principal and earned interest.

How TCG can Assist YOU?

• Analyze and advise you on which CalSTRS option is best

for you.

• Validate if your investment portfolio allocation is

commensurate with your age and lifestyle?

• Implement a debt reduction strategy utilizing your 403b.

• Validate your retirement income needs, and implement a

proactive plan to reach your retirement goals.

• Review and analyze your need for a living will and trust

to create tax intelligent strategies to shelter your estate.

CalSTRS Loan Program3% Down (80/17)

•3% down payment – only 1% needs to be your funds the remaining can be gifted by a family member

•FREE float down to lower rate – if CalSTRS lowers rates during the 45 day lock period, you get the lower rate

•The 17% 2nd has a deferred for 5 years, this enables you to qualify for a larger home

Questions and SupportCall 661-979-0945 or 800-566-4047

Jim WaiteJL Waite Financial Group661-979-0945 (c) 589-5268 (f)jlwaite@gmail.comwww.jlwaite.com