Our Workshop Our Workshop Agenda Money and Math This is our opening where we set the foundation for the workshop around some core philosophies. Every day, eroding factors wear down our wealth and in the short term, the effects can seem very minor. But when viewed long term these eroding factors can have a startling and negative impact on your retirement. Taxes, inflation, market risk, sequencing of returns, debt, lost opportunity costs are among the major long term offenders for us all. By discussing these factors, plus a few others, we can now begin to apply remedy concepts to the benefits structure and to personal savings and spending decisions, helping you meet your retirement goals while maximizing your day-to-day use, control and enjoyment of your money. Your Retirement Annuity In the Roman times, if you served as a soldier for 20 years, Caesar would grant you an Annuity - income for life for your service to Rome. Loosely translated, a modern Annuity is an income for life. Your Federal retirement benefit is called a Retirement Annuity and the amount of the payment will be a function of your age, years of service and earnings. In our discussions of Annuities, we’ll pick apart each of these areas to try to look at the math behind these calculations to help you better understand how to use these calculations to your advantage and not leave any hard earned benefits on the table. Preparing for Retirement Becoming eligible for a fully earned retirement benefit is one issue but now how does one prepare, given the labyrinth of exercises and forms? In this section we discuss action timelines starting at one year before retirement and moving on to six months before, the month of, the week of, down to the day of retirement. And then we discuss the timeline expectations for receiving benefits. Once retired, your full benefit is not paid until all paperwork is confirmed and in good order. Things like divorce, military buy-backs, service repurchase any more can hold up or extend the amount of time before your paperwork is fully processed. Other items include timing of your special supplement payment, Dental & Vision premiums, Health premiums, annual leave cash out, TSP availability, tax withholding all will be discussed to help you time your final retirement date. Cash Flow/ Debt Management In the years leading up to retirement, and once you have entered retirement, cash flow is a major concern. We discuss budgeting in the front end of this section and afterward we share ideas for managing debt. In broad terms, we break debt into two parts: tax deductible and non tax deductible. Tax deductible will almost always include your mortgage and we will discuss how a mortgage can be a tool for helping you with debt leading into retirement. Non tax deductible debt includes primarily vehicle loans and credit card debt. We discuss strategies that can be employed to minimize your debts so, rather than paying interest to a financial institution, you can keep these funds on your personal financial balance sheet and maintain a healthy credit score. Taxes Generally speaking, as we lead into retirement, our children are adults and our deductible expenses are far lower than when we were building a career and a family. Subsequently, most of our retirement income will be taxable - including the TSP withdrawals. With lower deductions and most sources of income being taxable, more of our hard earned dollars and benefits go to taxation; and it's likely that our current income tax environment will trend higher . In planning on retirement, many taxes need to be considered: Federal tax, State tax, Local tax, Sales tax, Property tax and Estate tax. In this section, we’ll discuss each of these levies along with some strategies to consider for controlling taxation both leading into retirement and after retirement. Thrift Savings Plan /ROTH Thrift Savings Plan (TSP) There are two sections for this topic that we’ll discuss in depth - Accumulation and Distribution of your TSP. We begin by defining the different parts of the TSP, mainly the traditional TSP and the ROTH TSP, explaining their differences and why would you might use one versus the other - or both! We will discuss what to do once we have saved our retirement funds: Asset allocation strategies - what investment funds are available to me and how do they work? A sound allocation among these funds require investment time horizons that alter according to age and time-line in needing additional future income. We refer to the accumulation phase of savings and investment plans in your TSP as “Climbing Up the Mountain” Once you reach the apex of your “Mountain”, we need to have a strategy to spend these retirement funds or “Come Down the Mountain.” Here we will discuss the rules in your TSP for withdrawal, tax implications, penalties and strategies to minimize or eliminate them. We will discuss the implications of moving your funds to another retirement plan such as an IRA. Last, we’ll discuss ideas designed to structure income for a fixed period of time or for lifetime in an up and down market. Social Security In this section, we’ll review future social security benefits for CSRS, Offset and for FERS, how your Special Supplement will work. Factors that can impact your benefit include: which Federal plan are you in, the age in which you take your benefit, integrating with your spouse, Windfall elimination, Government Pension Offset and post retirement survivor benefit planning. Last, we’ll explore a few strategies in electing your benefit along with your spouse and discuss tax implications of Social Security benefits if you’re working, or not. Long Term Care Its no question that we’re living longer but we have to consider our quality of life and our ability to care for ourselves. As we age, our health may change and it may become necessary for others to care for us. Many people might turn to spouses or family members, but they may be unable or unwilling. Some may then have to turn to outside care and that creates a new expense. We can use our savings to pay for this care. However, our savings may be insufficient or we may not choose to our savings in this manner. In this case, we can consider Long Term Care insurance. Many insurance companies issue Long Term Care insurance and we’ll discuss the various designs of these polices to give you a better idea of how to solve your personal care puzzle, to keep your money in your family AND keep your family together! Life Insurance (Including Federal Employee Group Life Insurance- FEGLI) Many of us elected FEGLI and have made our own personal purchases through the years. In this section, we’ll discuss FEGLI in the present as an employee and the options you have in electing to take FEGLI into retirement. If you have made your own purchases outside FEGLI, we’ll present a format to audit your current coverage for longevity and price stability. Additionally, we’ll review the basic types of insurance available to you as either an alternative to FEGLI or for your own future purchases to help you make more informed decisions in fulfilling one of many strategies. Estate Planning We spend a lifetime building our wealth, and what we don’t use we might like to pass along to family, friends or charities. In this section we’ll arm you with some basic information around trusts, wills, special need, divorces, etc. And we will talk about the materials you need to pull together in visiting with a estate planning professional. If you have no plan, there is no worry; the government has one for you and it's called probate. The better you organize and communicate your holdings to a professional, the easier and less costly it will be to pass your holdings along. Putting it all Together - Personalized Estimated Retirement Benefits Statements Your time is valuable and the 4 Square Retirement Benefits and FInancial Literacy training program was developed with your time in mind. We believe that our workshop will be more relevant if you follow along using your own data. That's why we offer personalized estimated retirement benefits statements to our attendees. Just fill out the data collection form and send it to us no later than two weeks before your scheduled workshop and your personalized estimated retirement benefit statement will be waiting for you to reference throughout the workshop. This information is yours you keep and to apply as you see fit. NATCA has created many relationships to help you in the next steps and at the end of our workshop we’ll leave you with a list of these partner vendors as well as a list of suggested questions to use in interviewing advisors. Please keep in mind: The information you receive from different parties may be contradictory. It is important that you contact the Office of Personnel Management (OPM) when these instances arise, as final resolution will be determined by that office. Thank you for signing up - we hope you enjoy the workshop!