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Retirement Education for LIFE SM NRM-2958AO.2 3 3 steps to plan your retirement income For those who have one year or less until retirement.

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Presentation on theme: "Retirement Education for LIFE SM NRM-2958AO.2 3 3 steps to plan your retirement income For those who have one year or less until retirement."— Presentation transcript:

1 Retirement Education for LIFE SM NRM-2958AO steps to plan your retirement income For those who have one year or less until retirement

2 Retirement Education for LIFE SM ISAC Spring School Countdown to your retirement 3 steps to maximize your final years of saving For those who have 1- 5 years until retirement NRM-3287AO.2 (06/08) ©2008 Nationwide One Nationwide Blvd. Cols. OH Nationwide, On your side and the Nationwide framemark are registered service marks of Nationwide Mutual Insurance Company. Retirement Education for life is a service mark of Nationwide Mutual Insurance Company. Retirement Specialists are registered representatives of Nationwide Investment Services Corporation, member FINRA. In MI only, Nationwide Investment Svcs. Corporation.

3 3 Steps to plan your retirement income Retire — 3 The three steps 1.How much income will you need? 2.How do you make it last? 3.How can you get it?

4 3 Steps to plan your retirement income Retire — 4 How much income will you need?

5 3 Steps to plan your retirement income Retire — 5 Look at your other income resources… Action step Call for help Examine your income need Pension Social Security Retirement accounts Earnings from part- or full-time job Investment income

6 3 Steps to plan your retirement income Retire — 6 Know your pension benefit Contact your Benefits Office Ask for latest projected benefit statement Be prepared to ask questions— –Benefits are based on years of service, age, income –Ensure that information on file is correct Ask how to begin receiving benefits Action step Examine your income need

7 3 Steps to plan your retirement income Retire — 7 Maximum Monthly Benefit (2009) Age 62 $1,769 Age 65 $2,172 Age 70 $2,777 Research Social Security 46% more if you wait Examine your income need $403 difference $605 difference Source: Social Security Administration 2009: Workers with Maximum-Taxable Earnings

8 3 Steps to plan your retirement income Retire — 8 Contact Social Security To find out if you have a benefit Call Social Security Web site Request “Social Security Earnings and Benefit Estimate Statement” Action step Examine your income need

9 3 Steps to plan your retirement income Retire — 9 Estimate your expected retirement expenses A few retirement expenses to consider: Health care Housing & utilities Transportation & food Anticipated travel & hobby costs Other Action step Call for help Examine your income need

10 3 Steps to plan your retirement income Retire — 10 Calculate your in-retirement income Income - expenses = Shortfall: Will you have a shortfall the day after you retire? Surplus: Have you calculated that you will have more income than you need in retirement? If so, “WaHoo” … Celebrate! Action step Call for help Examine your income need Monthly retirement income

11 3 Steps to plan your retirement income Retire — 11 How do you make it last? Call for help

12 3 Steps to plan your retirement income Retire — 12 Stretch your income Ways to help stretch your income Be ready for risks to your retirement dollars Consider supplemental Retirement Plan options through your Employer (457, 401k, 403b) Plan for taxes in advance

13 3 Steps to plan your retirement income Retire — 13 Stretch your income Be ready for risks Long-term care costs Longevity Inflation Investments Health care costs Action step Call for help

14 3 Steps to plan your retirement income Retire — 14 NO! Do you have to move your money? NO! No new fees or sales commissions No early withdrawal penalties More of your money keeps working for you Help by phone—no additional charges! Stretch your income You can stay in the deferred compensation plan! Call for help

15 3 Steps to plan your retirement income Retire — 15 Reasons to combine other retirement dollars into this plan Simplifies paperwork Personal help now and after you retire May pay less in annual account fees Nationwide is an industry leader in both 457(b) and 401(k) markets Stretch your income Call for help Qualified retirement plans, deferred compensation plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59½. Neither Nationwide, nor any of its representatives give legal or tax advice.

16 3 Steps to plan your retirement income Retire — 16 Know the types of accounts you can combine Stretch your income Action step Call for help You can move dollars from a: Qualified 401(k) retirement plan Qualified 403(b) retirement plan Rollover IRA, Contributory IRA or SIMPLE IRA account

17 3 Steps to plan your retirement income Retire — 17 Plan for taxes BEFORE electing income Know how much you will pay; plan so that you pay the least amount There are taxes due when selling some assets Social Security benefits are taxable Consult a tax advisor. Neither Nationwide, nor any of its representatives give legal or tax advice. Stretch your income Call for help

18 3 Steps to plan your retirement income Retire — 18 Use Order of taxation Taxable You already paid the taxes before investing; No taxes due on dollars you invested, but due on the earnings Tax deferred You did NOT yet pay taxes on either the investment or the earnings. You now need to pay tax as you use the money Roth IRA, Roth 401k, Roth 457 (generally tax free) Stretch your income Action step

19 3 Steps to plan your retirement income Retire — 19 Know Required Minimum Distribution (RMD) rule April 1 in the calendar year after you turn age 70½ OR At retirement The IRS requires you take money from your employer-sponsored retirement plan by the later of: Stretch your income Action step Call for help Required Minimum Distributions waived for 2009

20 3 Steps to plan your retirement income Retire — 20 Stage I Up to age 70-½ Conservative investments Age 70-½ - 80 Moderately aggressive investments Stage II Age 80 plus Most aggressive investments Stage III Sample way to structure resources (based on withdrawal need) Stretch your income

21 3 Steps to plan your retirement income Retire — 21 How do you get it?

22 3 Steps to plan your retirement income Retire — 22 Begin receiving income Action step Call for help Choose an income option Income options: a.Future payout election date b.Lump sum withdrawal c.Systematic withdrawal d.Annuitization e.A combination of systematic withdrawal and annuitization

23 3 Steps to plan your retirement income Retire — 23 Income option: a. Future payout election date CAUTION: RMD applies! Begins at age 70-1/2; 50% penalty if amount withdrawn is less than required Begin receiving income ! Future payout election date Defer withdrawing your funds: dollars in the plan continue to work for you Good legacy planning for family, charity Above all, enjoy retirement!

24 3 Steps to plan your retirement income Retire — 24 Income option: b. Lump-sum withdrawal CAUTION! Taxes are paid on whatever is not rolled into another qualified account; large-sum withdrawals may throw you into a higher tax bracket! Begin receiving income ! Lump-sum withdrawal Receive the value of your account as a lump sum Opt for initial, partial lump-sum and receive the remainder as a stream of regular payments

25 3 Steps to plan your retirement income Retire — 25 Income option: c. Systematic withdrawal Caution! Chance you could run out of money! Begin receiving income ! Systematic withdrawal Regular income and opportunity to invest to beat inflation Money has the opportunity to grow tax-deferred Ability to select investments Remaining balance can be left to designated beneficiaries Taxes paid only on what is withdrawn as it is withdrawn

26 3 Steps to plan your retirement income Retire — 26 Income option: d. Annuitization Caution! Limited access to your money! Once chosen, this option cannot be changed! Begin receiving income ! Annuity An insurance contract Provides periodic income at regular intervals for a defined period of time Guaranteed lifetime income with some options –Guarantees are subject to the claims paying ability of Nationwide Life Insurance Company Tax-deferral on growth of undistributed assets

27 3 Steps to plan your retirement income Retire — 27 Income option: e. Combining income types Begin receiving income Lifetime income with some options Your choice of fixed or variable income Money has the opportunity to grow tax-deferred Legacy planning capability Taxes paid only on what is withdrawn More…

28 3 Steps to plan your retirement income Retire — 28 What do I do to get started? Begin receiving income

29 3 Steps to plan your retirement income Retire — 29 How do you get started? Begin receiving income Call for help Who must be notified upon separation of service, and when? Benefit receipt dates When can I start drawing money from my plan?

30 3 Steps to plan your retirement income Retire — 30 Frequently asked questions Begin receiving income Can payment options be changed? Can my checks be direct deposited? How often should I review my finances? Should I ever change my beneficiary?

31 3 Steps to plan your retirement income Retire — 31 Use other tools... Begin receiving income Call for help Answers to retirement questions Financial education workshops Website reviews Statements and newsletters

32 3 Steps to plan your retirement income Retire — 32 Follow-through with your “To do” steps Begin receiving income Action step Call for help Calculate your withdrawal need Review benefits coverage Determine insurance needs Schedule a yearly financial review

33 3 Steps to plan your retirement income Retire — 33 Need help? Call Direct Access—Reps on Call Monday-Friday 8 a.m. to 9 p.m. No additional charges to Nationwide customers! Action step Call for help Information from Retirement Specialists is for educational use only, and should not be deemed investment advice.

34 3 Steps to plan your retirement income Retire — 34 Congratulations…and thank you! Information provided in this workshop is for educational purposes only and is not intended as investment advice. Direct Access—Reps on Call!


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