Maximizing Y our Retirement Benefits The S chamber Group, Inc. - PDF document

Maximizing Y our Retirement Benefits The S chamber Group, Inc. Duneland School Corporation Fall 2019 1 Y our Retirement Pieces: • Social Security • PERF/TRF – Defined Benefit (Pension) • PERF/TRF – Defined Contribution (formerly called Annuity Savings Account – ASA) • Voluntary Group Plans: • Duneland: 403(b), Roth 403(b), 457(b), Roth 457(b) • Other types of voluntary group plans: 401(k), Roth 401(k) • Negotiated Benefit: 401(a), VEBA • Personal Retirement Savings: IRA, Roth IRA, H SA • Other Personal Savings 2 Why does Duneland have 403(b) and 457(b)? • Additional savings opportunity! • 457(b) • No 10% penalty if w ithdraw n directly from 457(b) account, after terminating employment • 403(b) • Age 55 Rule: No additional 10% Federal tax penalty if w ithdraw n directly from 403(b) account and terminating employment during or after the year that you turn age 55 • Greater planning opportunities 3

Duneland’s Retirement Plan Providers: • Current 403(b) • Aspire/TD Ameritrade/Schamber Group/TSA Consulting Group • Fidelity/TSA Consulting Group (not included with Schamber Group Services) • Current 457(b) provider • Aspire/TD Ameritrade/Schamber Group/TSA Consulting Group • 401(a) vendors • MetLife (buyout), VOYA (current) • VEBA vendor • Security Benefit 4 Duneland’s Prior 403(b) Vendor Companies: VOYA (ING) AIG SunAmerica VALIC Life Insurance Company Of The Southwest Hartford - Franklin Life Franklin Templeton Investment Ameriprise Thrivent Financial for Lutherans American Funds American United Life Insurance (AUL) Lincoln National Life Northwestern Mutual Life Nationwide Financial Security Benefit Fidelity Investments PEFCU CUNA Mutual Life Insurance Co. Metropolitan Life Prudential AXA EQUITABLE Protective Life Ins Co 5 Retirement Benefit: • Lifetime Income • PERF/TRF - Pension • Social Security • Assets • PERF/TRF – Defined Contribution (ASA) • 403(b), Roth 403(b), 457(b), Roth 457(b) • IRA, Roth IRA, H S A • 401(a), VEBA • Other Personal Savings 6

What Can I Control Today? : • Limited control – investment selection only: • PERF/TRF – Defined Contribution (ASA) = 3% of gross wages, mandatory • Negotiated Benefit: 401(a), VEBA 7 What Can I Control Today? : • Complete Control – amount & investment selection: • PERF/TRF – additional ASA • Contribution increases only • May not be able to decrease additional ASA amount! • Voluntary Group Plan: 403(b), Roth 403(b), 457(b), Roth 457(b) • Personal Retirement Savings: IRA, Roth IRA, H S A • Other Personal Savings 8 What Can I Control Tomorrow? : • Limited Control – monthly lifetime income: • PERF/TRF – pension payout vs survivor benefits • Smaller survivor benefits = larger monthly income today • If one spouse dies – can the other spouse survive on remaining income? • Social Security – Start date (age 62+) • Consider the long-term effects! • Surviving spouse keeps the larger Social Security income – not both! 9

What Can I Control Tomorrow? : • Complete Control – future monthly income: • PERF/TRF – Defined Contribution (ASA) • Roll to IRA, or other pre-tax retirement account • Annuitize with INPRS selected provider • Voluntary Group Plan: 403(b), Roth 403(b), 457(b), Roth 457(b) • Personal Retirement Savings: IRA, Roth IRA, H S A • Other Personal Savings 10 What Can I Control Today & Tomorrow? : • Complete Control – Tax Treatment: • Voluntary Group Plan: 403(b) vs 457(b) pre-tax vs Roth • Personal Retirement Savings: IRA vs Roth IRA IRA vs H S A • Other Personal Savings 11 I Am Overwhelmed! – Where Do I S tart? : • Income: Gross vs Taxable vs Take-Home • Where is your money going? • Create Spending Plan • Essentials: make a list • Debt repayment • Make another list: lender, purpose, interest rate, minimum payments, payoff date (if there is one) • Credit Cards or other revolving credit • Car loans • Mortgages • Student Loans 12

I Am Overwhelmed! – Where Do I S tart? : • Sign Up For More Than 1 Credit Reporting Service • Use the free ones • Check for errors & correct • Nurture your credit score • Automate EVERYTHING! • Set up automatic payments for everything possible • Debit payments from checking/savings account, not credit card! • Late payments cost more than just fees • Effect on credit score is long-term • “Snowball Effect” – Debt Elimination • Reward Yourself! 13 There’s Nothing Left For Retirement Savings!: • You are already part way there…. • INPRS (PERF/TRF) = mandatory 3% gross income • Automatic retirement savings • 401(A) • Employer contributions for your retirement savings 14 Am I S aving Enough? : • Determine Retirement Income Need: • What do you need vs want today? • Need = Survival • Want = Lifestyle • What will change when you retire? • Income Replacement Goal • Create a “Floor” income level = 100% needed income • Additional assets/income creates lifestyle • Income Sources • Social Security/Pension • Assets 15

How Do I Make All This Work For Me? : • Are you controlling what you can? • Estimate your current tax bracket (see 2019 Annual Limits handout) • Use pre-tax 403(b), 457(b) and HSA contributions to reduce current taxable income • IRA – tax deductibility depends on AGI • Roth IRA – ability to contribute depends on AGI • Maximize after tax savings within current tax bracket • Roth 403(b) & Roth 457(b) • Roth IRA • Roth 403(b) & Roth IRA conversions • Other Personal Savings • Retirement Savings Contributions Credit (Saver’s Credit) 16 How Do I Make All This Work For Me? : • Are you controlling what you can? • Maximize your contributions – 2019 • 403(b) = $19,000 (+ $6,000 if age 50+) 457(b) = $19,000 (+ $6,000 if age 50+) • • IRA = $6,000 (+ $1,000 if age 50+) • HSA = $3,500 single, $7,000 family (+ $1,000 if age 55+, each spouse) • Select your investments • Control account & investment costs (consolidating prior employer plans, prior vendor accounts, IRA) • Reduce debt (credit cards!) • Have a plan!! 17 Now some info on your Aspire 403(b) Retirement S avings Plan 457(b) Deferred Compensation Plan 18

The S chamber Group, Inc. Registered Investment Advisor • Plan Advisor • Participant Support • Risk-Based Portfolio Models • Primary Participant Contact We are the name you see on your statement CONTACT US FIRST! 19 One exception… . For help accessing your Aspire account Participant Service Desk 866-634-5873 Mon – Fri, 8a – 8p EST 20 Basic Service Provider Functions: Bundled system Recordkeeper Custodian Vendor Representative Compliance Administration Financial Advisor 21

Y our 403(b) & 457(b) S ystem: Unbundled S ervice Providers Record Keeper Custodian Aspire TD Ameritrade Financial Advisor & Plan Administrator Participant Services TSA Consulting Group Schamber Group 22 Y our 403(b) & 457(b) S ystem: Transparent Costs Aspire TD Ameritrade 403(b) = $35/year 403(b) = 0.04% (4 bps)/year 457(b) = $40/year + 457(b) = 0.03% (3 bps)/year 0.08%/year (8 bps/year) TSA Consulting Group Schamber Group 403(b) ~ 0.20% (20 bps)/year 0.27% (27 bps)/year 457(b) = $24/year 0.30% (30 bps)/year Note: 100 bps = 1.00% 23 Fidelity 403(b) • Contact (800) 343-0860 • Plan Number 72213 24

Duneland 403(b), 457(b) Plan Provisions • Initial Deferral Election*: Paper only $ per pay • Deferral Changes: Online or Paper • Contribution Changes: Each Pay Cycle • In-Service Distributions: Yes ▫ Over age 59 ½ • Hardship Distributions: Yes • Loans: Yes *457(b) deferrals start the month follow ing enrollment 403(b) deferrals start with next payroll cycle 25 3 Investment S ystems ▫ Do-It-With-Me  5 Risk-Based Portfolio Models (403(b) only) ▫ Do-It-For-Me  Vanguard Target Date Series (Default Investment Option)  More conservative as you get closer to retirement ▫ Do-It-Yourself  Choose your own combination of funds  Institutional Mutual Funds  Prudential Guaranteed Income Fund (GIF) – 403(b)  TD Ameritrade Money Market – 457(b) 26 Fun & Helpful Information • Find information on financial advisors ▫ BrokerCheck.finra.org ▫ adviserinfo.sec.gov • Find a Certified Financial Planner ▫ www.cfp.net • Indiana Public Retirement System (PERF/TRF) ▫ www.in.gov/INPRS • Social Security ▫ www.ssa.gov • Internal Revenue Service ▫ www.irs.gov • Life Span Calculator ▫ www.lifespancalc.com 27

New S tuff Log into Aspire https://schambergroup.invlink.com/ 403(b) Investment Guidance bit.ly/DSC403bProfile **Scheduling Oct. 15 – 17, 2019** bit.ly/TalktoElaine-onsite General Scheduling bit.ly/TalktoElaine 28 Elaine S chamber The S chamber Group, Inc. elaine@schambergroup.com Toll-free: 866-573-0912 29 Thank Y ou Please contact us at: info@scham bergroup.com Fiduciary Consulting Services and Financial Planning Services offered through The Scham ber Group, In., a Registered Investm ent Advisor. Registered Representative. Securities offered through Cam bridge Investm ent Research, Inc. a Broker/ Dealer. Mem ber FINRA/ SIPC. Investm ent Advisor Representative. Cam bridge Investm ent Research Advisors, Inc. Cam bridge and The Scham ber Group, Inc. are not affiliated. The Scham ber Group, Inc. does not give tax or legal advice. Consult your tax or legal professionals before m aking tax or legal decisions. 30