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Presenters:
Chuck Futel, VP of Chuck Futel & Associates
Colleen Keeton-Sims
Moderator: James E. Kent II Monitor: Debra Smith (McCall)
41st Annual Business Meeting & Training SeminarAugust 9 – 15, 2010 Cincinnati, OH
Financial Planning& 401K
How Money Works
Chuck Futel
VP of Chuck Futel & Associates
41st Annual Business Meeting & Training SeminarAugust 9 – 15, 2010 Cincinnati, OH
Primerica helps people make the most of their money
• Started in 1977• Insures more than 4.3 million lives• More than 2 million clients maintain investment accounts
with us• More than 100,000 licensed representatives • More than 20,000 licensed securities representatives • Investment clients have more than $34 billion in asset
values in their PFSI investment accounts (as of June 30, 2010)
• Primerica is the largest financial marketing company in North America
• Trades on the New York Stock Exchange under the symbol PRI
How Money Works
Most people are concerned about money matters,
but few truly understand how money works.
We live in times of CHAOS and CONFUSION!
For internal use only
Workers Lack Confidence
• Only 34% are very confident about having enough money to take care of basic expenses in retirement.
• A mere 23% are very confident that they’re doing a good job preparing for retirement.
• Only 18% are very confident they’ll have enough money to take care of medical expenses during retirement.
• Just 5% are very confident that Social Security will continue to provide benefits of at least equal value as those provided to retirees today.
(2008 Retirement Confidence Survey)
Did You Know?
• 47%: workers who say they’ve tried to calculate how much money they’ll need for retirement.
• 43%: said they “guessed” at the calculation. (2008 Retirement Confidence Survey)
Reaching Your Goals
Reaching your goal of achieving financial freedom can become a reality. Start taking action to make your dreams come true. Take these six steps toward reaching your goals:
1. Set a specific goal.
2. Have a specific time to achieve it.
3. Write your goals down.
4. Develop a plan to reach them.
5. Decide what price you are willing to pay to reach your
goals.
6. Focus on reaching your goals every day.
YOU
EmergencyFund
Short-TermSavings
Long-TermSavings
Put Yourself at the Head of the Line
Put Your Savings onAutomatic Pilot
Create Spending & Emergency Accounts
A spending account:• Should hold six to 12 months of living expenses• Should enable flexible withdrawals • Can shield against market risk by your not having to
withdraw significant amounts of money during bear markets.• Replenish spending account in favorable market conditions
An emergency account in a money market fund:• At least six months of income to use for unexpected
expenses, emergency situations, etc.
It Pays to Start Early
If your goal is to save $500,000 for retirement at age 65, look at the difference time makes.
Goal: $500,000 at age 65Monthly Savings Required
Assumes a hypothetical 10% constant rate and growth in values. Subject to applicable taxes. Rate of return is a nominal interest rate compounded on a monthly basis. Actual investment will fluctuate in value.
Begin at: Save: Cost to Wait:
Age 25 $78
Age 35 $219 3 times more!
Age 45 $653 8 times more!
Age 55 $2,421 31 times more!
The Rule of 72A simple concept called “The Rule of 72” shows the dramatic effect of time and compounding. The Rule of 72 says that your money will approximately DOUBLE at a point in time determined by dividing 72 by the interest rate you earn. The Rule of 72 illustrates the amazing way money can compound if you just give it enough time.
36 years
12 years
6 years
72 ÷ 2%
72 ÷ 6%
72 ÷ 12%
18 years72 ÷ 4%
9 years72 ÷ 8%
With 2% interest, your money will double in approximately 36 years.
With 12% interest, your money will double in approximately 6 years!
Your Money Will Double In…
Hypothetical percentage rates and values. Subject to applicable taxes.
The Power of Compound Interest
Mary started with a $500 balance on her credit card at a 19.8% interest rate. Each year, she made two additional charges of $75 each and made only the minimum payment of 3.5% of $20 over 5, 10, 15, 20 and 25 years. After 25 years, Mary’s interest charges on her credit card balance amounted to $3,130!
Look what happens when compound interest works against you:
$580
$1,840
$3,130
5 years
$1,200
$2,480
10 years
15 years
20 years
25 years
Taking Control of Your Debt
What You Can Do…• Pay yourself first.
• Adjust your priorities and establish a budget.
• Earn additional income.
• Avoid the credit trap.
• Re-align your assets.
Most People Don’t Plan to Fail, They Fail to Plan
In the early years, you don’thav
e m
oney...
In th
e la
ter y
ears
,you better have money.
Today1. Young children2. High debt3. House mortgage
Loss of income would be devastating
At Retirement1. Grown children2. Lower debt3. Mortgage paid
Retirement income needed
In the early years, you may need a lot of coverage...
In the later years, you may not.
The Theory of Decreasing Responsibility
Over the Years, Your Needs Change.
Are You Financially Ready to Retire?
When considering retirement, it’s very important to look at your:
•Lifestyle expectations during your later years
•Estimated sources of income
•Estimated expenses at retirement
Where Will the Money Come From?
• Social Security
• Company pension
• Retirement plan assets
• Personal savings
• Part-time employment
Where Will the Money Come From?
• 84% of workers expect retirement income from non-workplace savings or investments. However, only 56% report having these savings.
(2008 Retirement Confidence Survey)
• Accounting for almost 40%, Social Security is the largest source of income for the average person 56 and older.
(USA Today, February 22, 2008)
• Almost half of workers have less than $25,000 in personal savings and investments.
(2008 Retirement Confidence Survey)
Counting on Social Security?
If you’re counting on Social Security to fund your retirement, you could be in for a big surprise.
The monthly Social Security benefit for the typical retired worker in 2009 is $1,062.
– ssa.gov, September 2009
Could you live on $1,062 per month?
Quote from the front page of the Social Security Statement sent this year:
“Without changes, by 2037 the Social Security Trust Fund will be exhausted* and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits.”
Source: Social Security Administration, May 12, 2009*These estimates are based on the intermediate assumptions from the Social Security Trustees’ Annual Report to Congress.
Social Security Is Not Enough!
Risks Involved In Investing
When investing it is important that you understand the risks consider the risks involved.
•Longevity Risk
•Inflation Risk
•Market Risk
How long will you live?
Longevity Risk
• Longevity Risk is the risk of outliving your money• Why? – more and more people are living longer lives
ManWomanOne of Couple
95 Year Old
17%23%
36%
For couples age 65, there is an 84% chance one person will live to age 85 and a 63% chance one person will live to age 90.
53%
65%
84%
85 Year Old
33%
44%
63%
90 Year Old
Source: Society of Actuaries Annuity 2000 Tables
Inflation Risk
Inflation is a rise in the general level of prices over time, which can erode your money’s purchasing power.
Take a look at the cost of these items “Then” vs. “Now.”Inflation has definitely made an impact on how much things cost.
Sources: www.1970sflashback.com, viewed on May 15, 2008; www.fb.org, January 7, 2009; www.usps.com, March 23, 2009; www.eia.doe.gov, March 23, 2009
Product Then (1978) Now (2009) % Increase
First-class stamp 13¢ 42¢ 223%
A gallon of regular gas 63¢ $1.96 211%
A dozen eggs 82¢ $1.78 117%
A gallon of milk $1.71 $3.82 123%
Inflation Risk
To keep place with inflation, if you have $10,000 today, you’d need twice that amount in 20 years. Thirty years from now, you’d need more than three times
that amount — $32,400 – just to keep up!
Income Required To Keep Pace with Inflation*
*Chart assumes inflation rate of 4% a year.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$10,000
Today
$12,200
5 Years
$14,800
10 Years
$18,000
15 Years
$21,900
20 Years
$26,700
25 Years
$32,400
30 Years
Market Risk
Will you retire in a bull or bear market?
No one can be sure.Bull vs. Bear
• A bull market is a prolonged period in which investment prices rise faster than their historical average. Bull markets can happen as a result of an economic recovery, an economic boom, or investor psychology.
• A bear market is a prolonged period in which investment prices fall, accompanied by widespread pessimism. Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly.
Diversification is key and includes both equities and bonds exposure. Diversification does not ensure a profit or protect against loss.
RISK or Volatility 2008 2009 YTD
G Fund 3.75% 2.98% 1.84%
C Fund -37.0% 26.7% -0.1%
I Fund -42.4% 30.0% -4.8%
Market Risk
• Volatility can be defined as an investment's tendency to move up and down in price – For example: A stock whose price went up 10% yesterday and went
down 25% today is more volatile than a stock mutual fund which increased 1% in both days.
The Cycle of Market Emotions
“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”— Sir John Templeton
OptimismOptimism
Excitement
Thrill
Euphoria
Anxiety
Denial
Fear
Desperation
Panic
Skepticism
Hope
Relief
Capitulation
“Temporary set back — I’m a long-term
investor.”“Wow,
am I smart!”
Point of Maximum Financial Opportunity
Point of Maximum Financial Risk
“How could I have been so wrong?”
Pessimism
At the Bottom of the Cycle, What Happened Last Time?
Van Kampen Investments Source: Strategic Insight as of 12/31/08 and Morningstar Advisor Workstation. Growth of $10,000 in S&P 500 assumes no withdrawals. The S&P 500, which is an unmanaged group of securities, is considered to be representative of the stock market in general. Because these indices are not managed portfolios, there are no advisory fees, taxes or internal management expenses reflected in their performance. If these were included, results would be lower. An investor cannot invest directly in an index.An investment in the money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in one. Stocks are more volatile than money market funds. International investing entails special risks such as fluctuations in currency, foreign taxes, economic and political risks. Past performance is no guarantee of future results.
$0
$5,000
$10,000
$15,000
Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08
MM Assets as % of total mutual fund assets Average MM Assets as % of total mutual fund assets over time S&P 500 Index
Growth of $10,000 in S&P 500 Index vs. Money Market Assets
S&P 500 Bottom and Start of Bull Market
Moving to cash may mean missing out when the market eventually rebounds.
20
25
30
35
40MM Asset Peaks
(%)
What’s Happening This Time?
• Nearly $9 Trillion in Money Market Funds, CDs, Saving Accounts1
• That represents nearly 100% of the entire U.S. stock market2
• The eight previous times that cash peaked compared with the market’s capitalization, the S&P 500 rose an average 24% in six months3
• Where is all this cash?
• Checking accounts No Interest
• Savings account 0.25%
• 1 Yr Certificate of Deposits (CD) 1%
• 50% do not have an investment accounts!
1, 3 Bloomberg.com, “Cash at 18-Year High Makes Stock a Buy…”, December 29, 2008 2 As represented by the Wilshire 5000 as of April 30, 2009. The Wilshire 5000 Total Market Index represents the broadest index for the U.S. equity market, measuring the performance of all U.S. equity securities with readily available price data. This makes the Wilshire 5000 the most diverse of any U.S.-based index and it is in fact the largest index by market value in the world.
Take advantage of Tax Deferred Growth…
Take advantage of Tax Deferred Growth…
Roth IRA
Traditional IRA
401k/403b
SEP
Simple IRA
Rollover IRA’s
Safe Harbor IRA’s
Annuities
Children Education (ESA’s and 529’s)
Traditional vs. Roth IRAsTraditional IRA
•Anyone under age 70 1/2 who has earned income for the year at least equal to the amount of the contribution.
•Full contribution when Adjusted Gross Income is:
- Less than $168,800 (single filers)
- Less than $250,200 (joint filers)
•Up to $5,000 of earned income and $6,000 for investors over 50
•Earnings are tax deferred
•Distributions are taxable as ordinary income
•Required Minimum Distributions at 70½
Roth IRA• Anyone under age 70 1/2 who has earned income for the year at least equal to the amount of the contribution.
• Full contribution when Adjusted Gross Income is:
–Less than $95,000 (single filers) –Less than $150,000 (joint filers)
• Up to $5,000 of earned income and $6,000 for investors over 50
• Earnings are tax deferred
• Distributions are tax free
• No Required Minimum Distributions until the death on owner
PFSI Representatives are not tax advisers. Consult your tax professional with any questions.
Most People Should Own A Roth
• Retirement Priorities– Invest in company sponsored plan up to their match– Every extra dollar should be invested in a Roth IRA
• Example:– 6% of income for retirement– Invest 3% personally; Company invests 3% match– Invest 3% personally in Roth IRA
5 Great Reasons to Own a Mutual Fund
1. Professional money management
2. Diversification of assets
3. Growth potential
4. Affordability
5. Liquidity
Mutual funds are not guaranteed against a loss. Mutual funds also have costs and fees that are attributable to management and distribution.
Which type of investor are you? Should you be Aggressive or Conservative?
Investments with the potential for greater returns also carry higher risks, including loss of principal and investment gains.
AGGRESSIVEAggressive Equity FundsEmerging Growth Funds
LOWER RISK = LOWER REWARD HIGHER RISK = HIGHER REWARD
CONSERVATIVEIncome FundsBond Funds
Municipal Bond Funds, Government Funds
MODERATELarge-Cap Equity Funds
Balanced Funds
Mid-Cap Funds, International Funds
What’s one of the most effective long-term investment vehicles? — Mutual Funds
What is a mutual fund?
Note: Each mutual fund invests differently. Read the mutual fund’s prospectuses to determine how a fund may invest and to determine its current holdings. Mutual funds are actively managed portfolios and incur advisory fees and internal management costs. Investment in mutual funds does not assure a profit. The value of funds fluctuates, and, when redeemed, may be worth less than their original value.
Source: Morningstar. Average based on 3,276 U.S. domestic equity open-end funds.
Did you know?The typical mutual fund holds more than 150 stocks on average.
Professionally Individual Investors Managed Money Top Holdings Examples
CONSUMERThe Procter & Gamble Company (Folger’s, Crest, Duracell, Gillette, Tide)
ENTERTAINMENTThe Walt Disney Company (ABC Television Network, Disney Channel, Walt Disney World Theme Park)
PHARMACEUTICALSPfizer, Inc. (Zyrtec, Zoloft, Celebrex)
TELECOMMUNICATIONSVerizon Communications, Inc. (Wireless, long-distance telephone, broadband Internet)
CONSUMERMcDonald’s Corporation
TECHNOLOGYMicrosoft Corporation (Windows computer software, Xbox video game system)
Diversification is a time-tested principle.
Spread out your investment dollars to protect against market risk.
What is the ideal asset mix???
Source: Morningstar. Past performance is no guarantee of future results. This chart is for illustrative purposes only and does not represent an actual investment or the performance of any specific investment. All investments involve risk including loss of principal. See endnote 3 for specifics regarding asset classes. Bond prices will decline as interest rates rise. These securities do not carry guarantees like the bonds themselves.
Performance of TSP
L Income L 2010 L 2020 L 2030 L 2040 G Fund F Fund C Fund S Fund I FundAverage Annual Returns
1-Year 8.57% 10.30% 19.14% 22.48% 25.19% 2.97% 2.99% 26.68% 34.85% 30.04%
3-Year 2.85% 1.56% (0.56%) (1.65%) (2.73%) 3.86% 6.18% (5.56%) (4.26%) (5.86%)
5-Year 3.64% 3.69% 2.95% 2.54% 2.19% 4.20% 5.06% 0.47% 2.25% 3.67%
10-Year - - - - - 4.62% 6.39% (0.94%) - -
Since Inception 3.64% 3.69% 2.95% 2.54% 2.19% 6.15% 7.10% 9.31% 4.86% 4.03%
Inception Date Aug-05 Aug-05 Aug-05 Aug-05 Aug-05 Apr-87 Jan-88 Jan-99 May-01 May-01
Calendar Year Returns
2005 2.15% 2.99% 3.04% 3.59% 3.92% 4.49% 2.40% 4.96% 10.45% 13.63%
2006 7.59% 11.09% 13.72% 15.00% 16.53% 4.93% 4.40% 15.79% 15.30% 26.32%
2007 5.56% 6.40% 6.87% 7.14% 7.36% 4.87% 7.09% 5.54% 5.49% 11.43%
2008 (5.09%) (10.53%) (22.77%) (27.50%) (31.53%) 3.75% 5.45% (36.99%) (38.32%) (42.43%)
2009 8.57% 10.03% 19.14% 22.48% 25.19% 2.97% 5.99% 26.68% 34.85% 30.04%
YTD 1.89% 1.81% 1.22% 1.11% 0.94% 1.84% 6.53% (0.11%) 6.15% (4.81%)
Recommended Funds 13 Considerations
1. Performance vs. Index (S&P 500 etc) at least 1% better
2. Performance vs. Peer Group (Large Cap Value or Growth) at least 1% better
3. Short vs. Long Term Performance Long term performance under the same money manager will trump short-term or inconsistent performance
4. Manager Longevity in Current Fund Less than 20 U.S. stock funds have had the same manager on board for at least two decades.
5. Fund’s Longevity Minimum 5 year track record
6. Fund’s Fees Lower fees are better; don’t have to be the lowest
7. Fund’s Size Want $1Billion for sector funds; $2 – 15 Billion for others; greater than $30 Billion limits flexibility
8. Fund’s Turnover Ratio Want turnover ratios less than 60%; the lower the better.
9 Lessons from the Current Depression
1. Beware of market forecasts, TV analysis and even by experts.
2. The sectors than performed the worst in 2008 did well in 2009 (Emerging markets).
3. Never underrate the importance of asset allocation, particularly the inclusion of bonds.
4. Mutual funds with superior performance records often falter, particularly funds with a high concentration of a stock (Lehman Brothers) or sector (banking sector).
5. Avoid performance chasing. e.g. China funds
9 Lessons from the Current Depression
6. Avoid funds that exceed the category by a larger margin.
7. Avoid funds that use leverage. The first lesson is that leverage kills.
8. Continue to hold sectors which have negative correlations to the S&P.
9. Beware of financial innovation. Because most of it is designed to enrich the innovators, not investors. These products have taken down our national brokerages, investment bankers, national banks and hedge fund industry.
Chuck Futel & Associates
• Started in July 1983
• Serve over 3500 families in the Tri-State (Ohio, Kentucky & Indiana)
• One of the largest minority businesses in the Tri-State
• Recognized by the Cincinnati Enquirer
• Offers solutions to retirement, investment, long term care, life, auto & homeowners insurance, debt, mortgages and credit repair
• Offers financial need analysis
Chuck Futel & Associates
Our three promises:• Education• Integrity• Complimentary and Courteous Service
Chuck Futel & Associates2300 Montana Avenue #105
Cincinnati, OH 45211(513) 821-3332
End Notes
An investor should carefully consider a mutual fund’s commissions, trailing commissions, management fees, charges and expenses, as all may be associated with mutual fund investments. The prospectus contains this and other information about mutual funds. Please read and carefully consider this information before investing. You can obtain a prospectus from your PFSI registered representative.Investing in mutual funds entails risk, including loss of principal. Shares, when redeemed may be worth more or less than their original value. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.The variable annuity contract prospectus contains information about the contract’s features, risks, charges and expenses. The investment objectives, risks and policies of the investment options, as well as other information about the investment options, are described in their respective prospectuses. Please read the prospectuses and consider this information carefully before investing. You can obtain a prospectus from your PFS Investments registered representative.There is no guarantee that any of the variable investment options of a variable annuity will meet their stated goals or objectives. The account value is subject to market fluctuations so that, when withdrawn, it may be worth more or less than its original value. All variable annuity product guarantees are based on the claims-paying ability and financial strength of the issuing insurance company. Please contact your Registered Representative for complete details. Variable annuities are long-term investment vehicles designed for retirement purposes. Withdrawals of taxable amounts are subject to ordinary income tax and if made before age 591⁄2, may be subject to a 10% Federal income tax penalty. Withdrawals will reduce the living and death benefits and account value. Withdrawals during the first eight years of the contract may be subject to surrender charges. See the contract prospectus for more information.
End NotesThere are a number of factors that can affect whether a portfolio will last through retirement. The table shows how the rate of withdrawal and various portfolio allocations can affect the chance of meeting income needs over a 25-year retirement.A high probability indicates it is more likely that an investor will meet their income need in retirement, while a low probability indicates that an investor is less likely to do so and may face a shortfall. Generally, the chance of a portfolio running out over a long retirement is less likely as the amount withdrawn decreases and as equities are added.It is assumed that a person retires at year zero and withdraws a required income need each year beginning in year 1. Annual withdraws are inflation-adjusted by the historical 1926-2007 inflation rate of 3.1% each year. Annual investment expenses were assumed to be 0.95% for stock mutual funds and 0.76% for bond mutual funds.
The image was created using parametric simulation. This model estimates the range of possible outcomes based on a set of assumptions including arithmetic mean (return), standard deviation (risk), and correlation for a set of asset classes. The inputs used herein are the historical 1926-2007 figures. The risk and return of each asset class, cross-correlation, and annual average inflation over this time period follow. Stocks: risk 20.0%, return 12.3%. Bonds: risk 5.7%, return 5.5%. Correlation 0.04. Inflation: return 3.1%. Note that other investments not considered may have characteristics similar or superior to those being analyzed. Each simulation produces 25 randomly selected return estimates consistent with the characteristics of the portfolio to estimate the return distribution over a 25-year period. Each simulation is run 5,000 times, to give 5,000 possible 25-year scenarios. A limitation of the simulation model is that it assumes a constant inflation-adjusted rate of withdrawal, which may not be representative of actual retirement income needs. This type of simulation also assumes that the distribution of returns is normal. Should actual returns not follow this pattern, results may vary.
Primerica Financial Services is an affiliate of PFS Investments, Inc.
www.primerica.com
©2009 Primerica Financial Services
38905/08SEC165-6/3.09
Retirement from IRS
Colleen Keeton-Sims
41st Annual Business Meeting & Training SeminarAugust 9 – 15, 2010 Cincinnati, OH
Retirement: Agenda
• Planning
• IRS plans (CSRS & FERS)
• Retirement reasons
• Helpful seminars
• Retirement estimate
• What may affect benefits?
• Questions & Answers
Retirement: Planning
Hopefully you did the following:• Verified your IRS Plan (e.g. CSRS, FERS)
benefits• Answered probing questions• Set & met goals• Diversified your portfolio
Retirement: Planning cont. p2
Answered probing questions:
– When do I plan to retire?
– What is required to retire?• Determine comfortable amount• Paperwork or necessary processes
Retirement: Planning cont. p3
Set & met goals– How I obtained the goal
• Determined critical objectives• Made plan & checklist
– Tracking purposes – Monitored status – Checked off tasks met– Followed up on incomplete items
» marked for rework » required change
Diversified– Within IRS
• TSP contribution using IRS match
Made outside investments– secured “nest egg” builders
• Personal savings• Stock market • IRAs
Retirement: Planning cont. p4
Retirement: IRS Plans
• Civil Service Retirement System (CSRS)
• Federal Employees Retirement System (FERS)
Retirement: What is CSRS?
• CSRS – Hired before 1/1/84– 5 (+) years prior federal service– Regular CSRS employees fund
• Contribute 7% of basic pay
– Law enforcement officers (LEOs)• contribute 7.5% of basic pay
Retirement: CSRS Offset
• Hired before 1/1/84– left federal service over a year– returned after12/31/83
• Covered by CSRS and Social Security• Contributes 7% • Receives same CSRS benefits until age 62
– SSA eligible? CSRS annuity offset
• Irrevocable transfer option to FERS– Break in service 3 days (+)– During FERS open season
Retirement: What is FERS?
• Three tier Annuity plan– Basic FERS plan administered by
• Office of Personnel Management (OPM)• Social Security Administration (SSA)• Thrift Savings Plan (TSP)
• Required if hired after 12/31/83
• Alternative for CSRS Offset
Retirement: Reasons
• Retirement eligible
• Offered early retirement– Reduction in force (RIF)– Realignment
• Disability– On the job injury
• workman compensation
– Non-job related injury or medical
Retirement: Helpful seminars
• Attend pre-retirement seminar – Locally (Check with BeST)
• Advise manager want to attend
– Interactive Video Teletraining • IVT broadcasts held via satellite
– 11am-430pm EST:
• CSRS: 9/15/10 & 12/8/10• FERS: 9/16/10 & 12/9/10
Retirement: Helpful seminars
• Pre-retirement seminars cover– Retirement benefits– Social Security (SSA) – TSP– Federal Employee Health Benefits Program
(FEHBP)– Long Term Care– Federal Employees’ Group Life Insurance
Program (FEGLIP)
Retirement: Estimate reports• Retirement estimates
– Where & how to check retirement benefits• HR Connect• National finance (NFC) www.usda.nfc.gov • Employee Connection
– On ERC page under “My Profile” tab http://erc.web.irs.gov/Profile/
– Click on “View my benefits information” link http://erc.web.irs.gov/ec/eclogin/erc_get_emp_benefitslogin.asp
– Enter your SEID and Employee Connection PIN or default (last two digits of SSN followed by first two digits of SSN)
• Retirement & benefit statement• periodically sent to address on file
– Request estimate 45-60 days prior• Employee Resource Center (ERC)
– 866-743-5748 option 1
• or via IRWeb (Intranet) – OS Get Services
Retirement: Obtain Estimate
• After receive estimate contact– BeST Specialist
• Verify if benefits are available• Select from eligibility options
– keep or cancel medical with IRS– keep or cancel life insurance with IRS
• Avoid delay submit paperwork timely
Retirement: Estimate Received
• Once get estimate contact SSA– (Social Security Administration)
• Coordinate benefits • disability retirement• Medicare (Part A, B, C & D)• Military (e.g. TRICARE)
Retirement: Estimate Received
• Errors & follow up:– Correct errors with
• BeST• SSA
– Verify all data received– If projected receipt date past– Received incorrect quote or pay
– Submit paperwork timely
Retirement: Errors & Follow up
• Full retirement benefits affected– Seasonal or part time work – Leave (excessive)– Military
• pro: time served • con: received retirement payouts
– TSP cash out before age 59 ½
Retirement: Benefits Affected
• Government Pension Offset (GPO)– Based on spouse’s work
Retirement: Benefits Affected
• SSA www.ssa.gov– Early retirement eligible (62 years)
– Returns to work before full retire age– Makes more than allowed
– Windfall elimination • Based on your work • Company did not pay into SSA
– Teachers (some districts do but rare)– Postal workers
Retirement: Benefits Affected
References• Government Pension Offiset (GPO) based on Spouse:
http://erc.web.irs.gov/DisplayAnswers/AnswerType.asp?FolderID=5&CategoryID=2&SubCategory=193&QuestionID=1706
• IVT: http://irweb.irs.gov/AboutIRS/bu/cl/comm/tv/training/csrsfers/default.aspx
• Windfall elimination based on you not spouse: http://erc.web.irs.gov/DisplayAnswers/AnswerType.asp?FolderID=5&CategoryID=2&SubCategory=193&QuestionID=1705
• Social Security Administration (SSA) www.ssa.gov
Questions & Answers
41st Annual Business Meeting & Training SeminarAugust 9 – 15, 2010 Cincinnati, OH
Make sure you signed in.
Complete your questionnaire for Mr. Futel
Complete the workshop survey for AIM
Thank you for investing in your future
Presenters:
Chuck Futel, VP of Chuck Futel & Associates
Colleen Keeton-Sims
Moderator: James E. Kent II Monitor: Debra Smith (McCall)
41st Annual Business Meeting & Training SeminarAugust 9 – 15, 2010 Cincinnati, OH
Financial Planning& 401K
