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Form No. 11055(0712)
Life Insurance Company of the Southwest™
Nevada Public Employees Retirement System (retirement)
Are you saving enough for ALL your tomorrows?
What’s YOUR
Tomorrow?
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?
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
Become Familiar with Your retirement BenefitHow to determine your retirement benefit
• Based on your age and years of service under retirement
• Retirement Factor
• Final average compensation
• Survivorship options
Source: retirement
How to Calculate Your Monthly Benefit
•Example:
•A participant retiring at age 62 with 30 years of service. Participants final years salary was $5,000 a month resulting in a final highest three year average salary of $4,800 per month.
Calculation:
Service # Yrs X Factor X Salary = Monthly Benefit
7/83 - 6/01 18 X 2.5% X $4,800 = $2,160
7/01 - 6/13 12 X 2.67% X $4,800 = $1,537
Totals 30 $3,697
Source: retirement
Retirement Income GapCan you live on a fraction of your final salary?
$108,366*Income needed in 20 years
$60,000
BeginWorking
Retireat 62
*Assumes a 3% inflation factor
26% reduction of income per month
$44,364Teacher Retirement
Income
Source: 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
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. This example is based on a teacher in the state of Nevada claiming single and zero
Allowances and in the 15% tax bracket, not considering state or local taxes.
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.
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
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
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
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.
For more information
Email:
Life Insurance Company of the Southwest™