Life Planning Seminar:
Important First Steps to a
Prosperous Retirement
PARTNERS OFFICE of
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MGH/MGPO PROFESSIONAL
STAFF BENEFITS OFFICE
Today’s Topics
 Why save now?
 Why save here?
 How to save?
 Selecting your retirement investments
 Next steps
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Why save now?
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Hit the Target
How much do the experts think you’ll need?
100%
90%
80%
70%
60%
50%
40%
30%
Target: 85%
20%
10%
0%
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of your pre-retirement
income per year
MGH/MGPO PROFESSIONAL STAFF
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Sources of Retirement Income
Social Security 18%
Paycheck 44%
(from continued employment)
Pension 19%
Savings and
investments 18%
Other 2%
Source: Social Security Administration, Income of the Aged Chartbook, 2008. SSA Publication No. 13-11727 Released:
April 2010. Shares of aggregate income using the highest quintile, $55,889 per year and higher. Actual data was rounded to
whole numbers. Total may not equal 100%.
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519019.2.0
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OFFICE
Save Now or Save Later
Dr. Smith
Start
Now
Total saved at age 65
Dr. Jones
Start Later
$99,574
Dr. Smith
25
35
Age
Stopped
65
65
Years
contributed
40
30
Age Started
Start Now: Age 25
$50 contributed monthly for
40 years at 6% annual rate of
return compounded monthly
$50,225
Dr. Jones
Total
contributed
$24,000
Total at
Retirement
$99,574
$18,000
$24,000
$50,225
Start Later: Age 35
$50 contributed monthly for
30 years at 6% annual rate
of return compounded monthly
$18,000
Contribution
Contribution
This hypothetical example is based on monthly contributions of $50 to a traditional tax-deferred retirement plan and a 6% annual
rate of return compounded monthly. Your own plan account may earn more or less than this example, and income taxes will be
due when you withdraw from your account.
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How to save?
7
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The Dinner That Cost $99,575
$99,575
$100,000
Save $50 each month
$75,000
$71,236
$50,226
$50,000
$34,650
$23,102
$25,000
$14,541
$617
$3,489
$8,194
$0
1 Year
5 Years
10 Years
15 Years
20 Years
25 Years
30 Years
35 Years
40 Years
This hypothetical example is based on monthly contributions of $50 made at the beginning of the month to a traditional taxdeferred retirement plan over the time periods indicated and a hypothetical 6% annual rate of return compounded monthly. Your
own plan account may earn more or less than this example, and income taxes will be due when you withdraw from your account.
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Why save here?
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Why Save Here
 Ease and convenience of payroll deduction
 Potentially lowers taxable income
 Tax-deferred growth
 Multiple investment choices
 Dollar-cost averaging
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Retirement Savings Program
Traditional TSA
403(b) Program
Roth TSA
403(b) Program
Contributions are deducted from
paycheck before taxes are calculated
Contributions are deducted after taxes
are calculated
Will reduce your taxable income every
paycheck
Will not reduce your taxable income
every paycheck
Contributions and investment earnings
will be taxed when distributed.
Contributions and investment earnings
will be tax free when distributed.
Combined maximum contribution $16,500 (CY2010)
Investment Providers
11
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Selecting Your Investments
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Three Basic Asset Classes
Bonds
-Debt Securities
governments &
corporations
Stocks
-Share of a
company, “equity”
Short-term
Investments
-Money market, T-bills, CDs
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The Benefit of Dollar-cost Averaging
share price
January
February
March
April
May
$10
$7
$6
$8
$9
investment shares
purchased
$50
$50
$50
$50
$50
$250 total
5
7.14
8.33
6.25
5.55
32.27 total
Average Cost Per Share = $7.74
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Next Steps
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PARTNERS OFFICE of
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Next Steps
 Do Something Today!!!
 Enroll in your 403(b) Traditional or Roth TSA
 Set-up your retirement contribution in PeopleSoft
 Select your retirement investments
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Professional Staff Benefits Office
Brigham & Women’s Hospital
Angela Carter
(617) 724-9357
acarter1@partners.org
Mass General Hospital, Bulfinch Bldg, Rm 126
If last name
starts with:
A-G
H-O
P-Z
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Jennifer R. Williams
Linda Gulla
Virginia Rosales
PARTNERS OFFICE of
RESOURCES for TRAINEES
(617) 726-9266
(617) 726-9266
(617) 724-9356
jrwilliams@partners.org
lgulla@partners.org
vrosales@partners.org
MGH/MGPO PROFESSIONAL STAFF
BENEFITS OFFICE