Nevada Public Employees
Retirement System
(retirement)
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)
You Can Work At Controlling Your Future
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?
Longevity: Your Biggest Risk
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
Life Expectancy
(average)
60
65
70
75
80
85
90
88
88.5
89.5
90.5
91.75
93.5
96
* Based on information obtained from AnnuityAdvisors.com
Become Familiar with Your retirement Benefit
How 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:
# 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
Service
Source: retirement
$3,697
Retirement Income Gap
Can you live on a fraction of your final salary?
$108,366*
Income needed in 20 years
$60,000
26% reduction of
income per month
$44,364
Teacher Retirement
Income
Begin
Working
*Assumes a 3% inflation factor
Source: retirement
Retire
at 62
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.
Gross Income per Paycheck
Pre-tax contributions
Standard tax deductions
Post-tax retirement contributions
Take-home pay
Post-tax
Pre-tax
$4,500
$4,500
$0
$133.33
$686.33
$653
$100
$0
$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 combined
employee/employer contributions: 100% of your
includible 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™