Georgia Teachers Retirement System (retirement)

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National Life Group ® is a trade name representing various affiliates, which offer a variety of financial service products. Form No. 11055(0712) Life Insurance Company of the Southwest™ Georgia Teachers Retirement System (retirement) Are you saving enough for ALL your tomorrows? What’s YOUR Tomorrow?

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What’s YOUR Tomorrow?. Georgia Teachers Retirement System (retirement). Are you saving enough for ALL your tomorrows?. You Can Work At Controlling Your Future. Retirement Questions to Ask Now! Are you planning to live to 100? What percentage of your Final Salary will you be living on? - PowerPoint PPT Presentation

Transcript of Georgia Teachers Retirement System (retirement)

Page 1: Georgia Teachers Retirement System (retirement)

National Life Group® is a trade name representing various affiliates, which offer a variety of financial service products.

Form No. 11055(0712)

Life Insurance Company of the Southwest™

Georgia Teachers Retirement System

(retirement)

Are you saving enough for ALL your tomorrows?

What’s YOUR

Tomorrow?

Page 2: Georgia Teachers Retirement System (retirement)

You Can Work At Controlling Your FutureRetirement Questions to Ask Now!

• Are you planning to live to 100?

• What percentage of your Final Salary will you be living on?

• Will you outlive your retirement money?

• Are you saving enough for all your tomorrows?

Page 3: Georgia Teachers Retirement System (retirement)

Longevity: Your Biggest RiskHow many retirement years will you enjoy?*

AgeLife Expectancy

(average)

60 8865 88.570 89.575 90.580 91.7585 93.590 96

Example of a female who reaches a certain age…

Then the average age she is expected to live

* Based on information obtained from AnnuityAdvisors.com

Page 4: Georgia Teachers Retirement System (retirement)

Become Familiar with Your retirement BenefitHow to determine your retirement Pension • Based on your age and years of service under retirement

• Final average compensation based on highest 24 months of membership

• State limits on salary increases

• Survivorship options

Source: www.retirementga.com

Page 5: Georgia Teachers Retirement System (retirement)

How to Calculate Your Monthly Benefit

Sample Calculation

1. Years of service 30

2. Multiply 30 (years of service) X 2% (age factor) 60%

3. Multiply by final average compensation

$3,952 (average) X 60% (payout factor) =

$2,371 per month

For illustrative purposes only. Source: retirement Handbook

Page 6: Georgia Teachers Retirement System (retirement)

Retirement Income GapCan you live on a fraction of your final salary?

$108,050*Income needed in 20 years

$59,825

BeginWorking

Retireat 60

*Assumes a 3% inflation factorSource: retirement Handbook

42% Net Loss ofSpendable income

$34,698Teacher Retirement

Income

Page 7: Georgia Teachers Retirement System (retirement)

Now Is the Time to Plan & Save Will you outlive your retirement money?

• Know your retirement expenses

– Don’t forget taxes and medical costs

• Identify your sources of income

– You may not receive Social Security

• Bridge the retirement gap

– Buy years of service

– Explore saving options through your 403(b) and/or 457 plan

– Create an income stream for life

Page 8: Georgia Teachers Retirement System (retirement)

Power of a Pre-Tax Savings Plan

Pre-tax Savings Gives Lacy More

Lacy wants to save $100 a month towards her retirement

She needs help to understand the power of a pre-tax savings plan.

Post-tax Pre-tax

Gross Income per Paycheck $4,500 $4,500

Pre-tax contributions $0 $133.33

Standard tax deductions $686.33 $653

Post-tax retirement contributions $100 $0

Take-home pay $3,713.67 $3,713.67

This hypothetical example is for illustrative purposes only. Taxes are deferred until monies are withdrawn from the plan. This example is based on a teacher in the state of Georgia claiming single and zero allowances. Source: TRAK Software

Page 9: Georgia Teachers Retirement System (retirement)

How Much Can Be Contributed?• The Internal Revenue Code determines an individual's maximum amount that he

or she can defer to the plan free of tax for the year. This may be limited by your employer’s plan provisions.

• If you contribute the maximum basic salary deferral limit, and your plan allows, you can qualify for both the catch-up provisions below. You have the potential to contribute up to $27,000 to your 403(b) plan during 2015.

• Basic salary deferral limit: $18,000 in 2015.

• 403(b) 15 years of service cap extension: You may be eligible to defer up to an additional $3,000.

• Age 50+ Catch-up: If 50 or older, you may be eligible to defer up to an additional $6,000 in 2015.

• Total 2015 contribution limit on combinedemployee/employer contributions: 100% of yourincludible compensation or $53,000, whichever is less.

Page 10: Georgia Teachers Retirement System (retirement)

How Loans Work

Loans may be available if the plan permits.

All loans from any retirement plan of the employer must be aggregated for purposes of determining the maximum amount of the loan. Loans can not exceed the lesser of:

– $50,000 (reduced by the highest outstanding loan balance for the last 365 days); or

– 50 percent of the present value of the participant’s non-forfeitable benefit under the plan. This amount will not be violated if the loan does not exceed the lesser of (1) $10,000 or (2) 100% of his or her vested account balance.

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Distributions Generally, because 403(b) plans enjoy tax deferral, elective deferrals in the plan cannot be withdrawn until:

– Age 59½

– Death of the participant

– Total disability of the participant

– On separation from service of the participant

– As the result of a QDRO (Qualified Domestic Relations Order), or

– As a qualified reservist distribution

Page 12: Georgia Teachers Retirement System (retirement)

Hardship Distributions

Hardships…Only employee salary deferrals can be withdrawn, not interest or employer contributions. The IRS lists the following as qualifying hardships:

– Medical expenses of the participant, participant’s spouse, or dependent

– Purchase of the participant’s principal residence– Tuition and related expenses for the next 12 months at a

postsecondary institution for the participant, participant’s spouse, or dependant

– Prevention of eviction from the participant’s principal residence or foreclosure on the mortgage of the participant’s principal residence

Page 13: Georgia Teachers Retirement System (retirement)

What Are Your Next Steps?How I Will Work with You

• Schedule a work-through to calculate your retirement benefit

• Determine your “retirement gap” and find ways to bridge that gap

• Explain your 403(b) plan and your savings options

• Address any other questions you may have

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Disclosure

• This presentation represents our understanding of the tax code and state retirement plan.

• You should always consult your tax professional or state retirement system for your individual situation

• Information believed to be accurate as of July 2013.

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For more information

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Life Insurance Company of the Southwest™