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

Retirement 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?

How many retirement years will you enjoy?*
Example of a female who reaches a certain age…
Then the average age she is expected to live
Age
60
65
70
75
80
85
90
Life Expectancy
(average)
88
88.5
89.5
90.5
91.75
93.5
96
* Based on information obtained from AnnuityAdvisors.com

How to determine your benefit
• Based on your age and years of service
• Determining total years of service
• Final compensation
• Payment options
Source: Oklahoma Teachers Retirement System

Example:
• A participant, retiring at age 62 with 30 years of service, opted for high base remittance and electing the standard maximum option. Participants final years salary was $60,000 resulting in a final highest three year average salary of 58,000.
Calculation:
Service
7/83-6/95
# Yrs X 2% X Salary / 12 = Monthly Benefit
12 X 2% X $40,000 / 12 = $800
7/95- 6/13
Totals
18 X 2% X $58,000 / 12 = $1,740
30 $2,540
Source: Oklahoma Teachers Retirement System

Can you live on a fraction of your final salary?
$108,366*
Income needed in 20 years
$60,000
Begin
Working
Retire at 62
*Assumes a 3% inflation factor
Source: Oklahoma Teachers Retirement System
49% reduction of income per month
$30,840
Teacher Retirement
Income

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

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.
Gross Income per Paycheck
Pre-tax contributions
Standard tax deductions
Post-tax retirement contributions
Take-home pay
Post-tax
$4,500
$0
$686.33
$100
$3,713.67
Pre-tax
$4,500
$133.33
$653
$0
$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 Taxes are deferred until monies are withdrawn from the plan.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 Oklahoma claiming single and zero allowances. Source: TRAK Software

•
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 combined employee/employer contributions: 100% of your includible compensation or $53,000, whichever is less.

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 nonforfeitable 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.

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

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

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

• 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™