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Presenters: Chuck Futel, VP of Chuck Futel & Associates Colleen Keeton-Sims Moderator: James E. Kent II Monitor: Debra Smith (McCall) 41 st Annual Business.

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Presentation on theme: "Presenters: Chuck Futel, VP of Chuck Futel & Associates Colleen Keeton-Sims Moderator: James E. Kent II Monitor: Debra Smith (McCall) 41 st Annual Business."— Presentation transcript:

1 Presenters: Chuck Futel, VP of Chuck Futel & Associates Colleen Keeton-Sims Moderator: James E. Kent II Monitor: Debra Smith (McCall) 41 st Annual Business Meeting & Training Seminar August 9 – 15, 2010  Cincinnati, OH Financial Planning & 401K

2 How Money Works Chuck Futel VP of Chuck Futel & Associates 41 st Annual Business Meeting & Training Seminar August 9 – 15, 2010  Cincinnati, OH

3 Primerica helps people make the most of their money Started in 1977 Insures more than 4.3 million lives More than 2 million clients maintain investment accounts with us More than 100,000 licensed representatives More than 20,000 licensed securities representatives Investment clients have more than $34 billion in asset values in their PFSI investment accounts (as of June 30, 2010) Primerica is the largest financial marketing company in North America Trades on the New York Stock Exchange under the symbol PRI

4 How Money Works Most people are concerned about money matters, but few truly understand how money works.

5 We live in times of CHAOS and CONFUSION! For internal use only

6 Workers Lack Confidence Only 34% are very confident about having enough money to take care of basic expenses in retirement. A mere 23% are very confident that they’re doing a good job preparing for retirement. Only 18% are very confident they’ll have enough money to take care of medical expenses during retirement. Just 5% are very confident that Social Security will continue to provide benefits of at least equal value as those provided to retirees today. (2008 Retirement Confidence Survey)

7 Did You Know? 47%: workers who say they’ve tried to calculate how much money they’ll need for retirement. 43%: said they “guessed” at the calculation. (2008 Retirement Confidence Survey)

8 Reaching Your Goals Reaching your goal of achieving financial freedom can become a reality. Start taking action to make your dreams come true. Take these six steps toward reaching your goals: 1.Set a specific goal. 2.Have a specific time to achieve it. 3.Write your goals down. 4.Develop a plan to reach them. 5.Decide what price you are willing to pay to reach your goals. 6.Focus on reaching your goals every day.

9 YOU Emergency Fund Short-Term Savings Long-Term Savings Put Yourself at the Head of the Line Put Your Savings on Automatic Pilot

10 Create Spending & Emergency Accounts A spending account: Should hold six to 12 months of living expenses Should enable flexible withdrawals Can shield against market risk by your not having to withdraw significant amounts of money during bear markets. Replenish spending account in favorable market conditions An emergency account in a money market fund: At least six months of income to use for unexpected expenses, emergency situations, etc.

11 It Pays to Start Early If your goal is to save $500,000 for retirement at age 65, look at the difference time makes. Goal: $500,000 at age 65 Monthly Savings Required Assumes a hypothetical 10% constant rate and growth in values. Subject to applicable taxes. Rate of return is a nominal interest rate compounded on a monthly basis. Actual investment will fluctuate in value. Begin at:Save:Cost to Wait: Age 25$78 Age 35$2193 times more! Age 45$6538 times more! Age 55$2,42131 times more!

12 The Rule of 72 A simple concept called “The Rule of 72” shows the dramatic effect of time and compounding. The Rule of 72 says that your money will approximately DOUBLE at a point in time determined by dividing 72 by the interest rate you earn. The Rule of 72 illustrates the amazing way money can compound if you just give it enough time. 36 years 12 years 6 years 72 ÷ 2% 72 ÷ 6% 72 ÷ 12% 18 years 72 ÷ 4% 9 years 72 ÷ 8% With 2% interest, your money will double in approximately 36 years. With 12% interest, your money will double in approximately 6 years! Your Money Will Double In… Hypothetical percentage rates and values. Subject to applicable taxes.

13 The Power of Compound Interest Mary started with a $500 balance on her credit card at a 19.8% interest rate. Each year, she made two additional charges of $75 each and made only the minimum payment of 3.5% of $20 over 5, 10, 15, 20 and 25 years. After 25 years, Mary’s interest charges on her credit card balance amounted to $3,130! Look what happens when compound interest works against you: $580 $1,840 $3,130 5 years $1,200 $2,480 10 years 15 years 20 years 25 years

14 Taking Control of Your Debt What You Can Do… Pay yourself first. Adjust your priorities and establish a budget. Earn additional income. Avoid the credit trap. Re-align your assets.

15 Most People Don’t Plan to Fail, They Fail to Plan In the early years, you don’t have money... In the later years, you better have money. Today 1. Young children 2. High debt 3. House mortgage Loss of income would be devastating At Retirement 1. Grown children 2. Lower debt 3. Mortgage paid Retirement income needed In the early years, you may need a lot of coverage... In the later years, you may not. The Theory of Decreasing Responsibility Over the Years, Your Needs Change.

16 Are You Financially Ready to Retire? When considering retirement, it’s very important to look at your: Lifestyle expectations during your later years Estimated sources of income Estimated expenses at retirement

17 Where Will the Money Come From? Social Security Company pension Retirement plan assets Personal savings Part-time employment

18 Where Will the Money Come From? 84% of workers expect retirement income from non- workplace savings or investments. However, only 56% report having these savings. (2008 Retirement Confidence Survey) Accounting for almost 40%, Social Security is the largest source of income for the average person 56 and older. (USA Today, February 22, 2008) Almost half of workers have less than $25,000 in personal savings and investments. (2008 Retirement Confidence Survey)

19 Counting on Social Security? If you’re counting on Social Security to fund your retirement, you could be in for a big surprise. The monthly Social Security benefit for the typical retired worker in 2009 is $1,062. –, September 2009 Could you live on $1,062 per month?

20 Quote from the front page of the Social Security Statement sent this year: “Without changes, by 2037 the Social Security Trust Fund will be exhausted* and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits.” Source: Social Security Administration, May 12, 2009 *These estimates are based on the intermediate assumptions from the Social Security Trustees’ Annual Report to Congress. Social Security Is Not Enough!

21 Risks Involved In Investing When investing it is important that you understand the risks consider the risks involved. Longevity Risk Inflation Risk Market Risk

22 How long will you live? Longevity Risk Longevity Risk is the risk of outliving your money Why? – more and more people are living longer lives Man Woman One of Couple 95 Year Old 17% 23% 36% For couples age 65, there is an 84% chance one person will live to age 85 and a 63% chance one person will live to age 90. 53% 65% 84% 85 Year Old 33% 44% 63% 90 Year Old Source: Society of Actuaries Annuity 2000 Tables

23 Inflation Risk Inflation is a rise in the general level of prices over time, which can erode your money’s purchasing power. Take a look at the cost of these items “Then” vs. “Now.” Inflation has definitely made an impact on how much things cost. Sources:, viewed on May 15, 2008;, January 7, 2009;, March 23, 2009;, March 23, 2009 ProductThen (1978)Now (2009)% Increase First-class stamp13¢42¢223% A gallon of regular gas63¢$1.96211% A dozen eggs82¢$1.78117% A gallon of milk$1.71$3.82123%

24 Inflation Risk To keep place with inflation, if you have $10,000 today, you’d need twice that amount in 20 years. Thirty years from now, you’d need more than three times that amount — $32,400 – just to keep up! Income Required To Keep Pace with Inflation* *Chart assumes inflation rate of 4% a year. $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $10,000 Today $12,200 5 Years $14,800 10 Years $18,000 15 Years $21,900 20 Years $26,700 25 Years $32,400 30 Years

25 Market Risk Will you retire in a bull or bear market? No one can be sure. Bull vs. Bear A bull market is a prolonged period in which investment prices rise faster than their historical average. Bull markets can happen as a result of an economic recovery, an economic boom, or investor psychology. A bear market is a prolonged period in which investment prices fall, accompanied by widespread pessimism. Bear markets usually occur when the economy is in a recession and unemployment is high, or when inflation is rising quickly. Diversification is key and includes both equities and bonds exposure. Diversification does not ensure a profit or protect against loss.

26 RISK or Volatility20082009YTD G Fund3.75%2.98%1.84% C Fund-37.0%26.7%-0.1% I Fund-42.4%30.0%-4.8% Market Risk Volatility can be defined as an investment's tendency to move up and down in price –For example: A stock whose price went up 10% yesterday and went down 25% today is more volatile than a stock mutual fund which increased 1% in both days.

27 The Cycle of Market Emotions “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” — Sir John Templeton Optimism Excitement Thrill Euphoria Anxiety Denial Fear Desperation Panic Skepticism Hope Relief Capitulation “Temporary set back — I’m a long-term investor.” “Wow, am I smart!” Point of Maximum Financial Opportunity Point of Maximum Financial Risk “How could I have been so wrong?” Pessimism

28 At the Bottom of the Cycle, What Happened Last Time? Van Kampen Investments Source: Strategic Insight as of 12/31/08 and Morningstar Advisor Workstation. Growth of $10,000 in S&P 500 assumes no withdrawals. The S&P 500, which is an unmanaged group of securities, is considered to be representative of the stock market in general. Because these indices are not managed portfolios, there are no advisory fees, taxes or internal management expenses reflected in their performance. If these were included, results would be lower. An investor cannot invest directly in an index. An investment in the money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in one. Stocks are more volatile than money market funds. International investing entails special risks such as fluctuations in currency, foreign taxes, economic and political risks. Past performance is no guarantee of future results. MM Assets as % of total mutual fund assets Average MM Assets as % of total mutual fund assets over time S&P 500 Index Growth of $10,000 in S&P 500 Index vs. Money Market Assets S&P 500 Bottom and Start of Bull Market Moving to cash may mean missing out when the market eventually rebounds. MM Asset Peaks (%)

29 What’s Happening This Time? Nearly $9 Trillion in Money Market Funds, CDs, Saving Accounts 1 That represents nearly 100% of the entire U.S. stock market 2 The eight previous times that cash peaked compared with the market’s capitalization, the S&P 500 rose an average 24% in six months 3 Where is all this cash? Checking accountsNo Interest Savings account0.25% 1 Yr Certificate of Deposits (CD)1% 50% do not have an investment accounts! 1, 3, “Cash at 18-Year High Makes Stock a Buy…”, December 29, 2008 2 As represented by the Wilshire 5000 as of April 30, 2009. The Wilshire 5000 Total Market Index represents the broadest index for the U.S. equity market, measuring the performance of all U.S. equity securities with readily available price data. This makes the Wilshire 5000 the most diverse of any U.S.-based index and it is in fact the largest index by market value in the world.

30 Take advantage of Tax Deferred Growth… Roth IRA Traditional IRA 401k/403b SEP Simple IRA Rollover IRA’s Safe Harbor IRA’s Annuities Children Education (ESA’s and 529’s)

31 Traditional vs. Roth IRAs Traditional IRA Anyone under age 70 1/2 who has earned income for the year at least equal to the amount of the contribution. Full contribution when Adjusted Gross Income is: - Less than $168,800 (single filers) - Less than $250,200 (joint filers) Up to $5,000 of earned income and $6,000 for investors over 50 Earnings are tax deferred Distributions are taxable as ordinary income Required Minimum Distributions at 70½ Roth IRA Anyone under age 70 1/2 who has earned income for the year at least equal to the amount of the contribution. Full contribution when Adjusted Gross Income is: –Less than $95,000 (single filers) –Less than $150,000 (joint filers) Up to $5,000 of earned income and $6,000 for investors over 50 Earnings are tax deferred Distributions are tax free No Required Minimum Distributions until the death on owner PFSI Representatives are not tax advisers. Consult your tax professional with any questions.

32 Most People Should Own A Roth Retirement Priorities –Invest in company sponsored plan up to their match –Every extra dollar should be invested in a Roth IRA Example: –6% of income for retirement –Invest 3% personally; Company invests 3% match –Invest 3% personally in Roth IRA

33 5 Great Reasons to Own a Mutual Fund 1.Professional money management 2.Diversification of assets 3.Growth potential 4.Affordability 5.Liquidity Mutual funds are not guaranteed against a loss. Mutual funds also have costs and fees that are attributable to management and distribution.

34 Which type of investor are you? Should you be Aggressive or Conservative? Investments with the potential for greater returns also carry higher risks, including loss of principal and investment gains. AGGRESSIVE Aggressive Equity Funds Emerging Growth Funds LOWER RISK = LOWER REWARD HIGHER RISK = HIGHER REWARD CONSERVATIVE Income Funds Bond Funds Municipal Bond Funds, Government Funds MODERATE Large-Cap Equity Funds Balanced Funds Mid-Cap Funds, International Funds

35 What’s one of the most effective long-term investment vehicles? — Mutual Funds What is a mutual fund? Note: Each mutual fund invests differently. Read the mutual fund’s prospectuses to determine how a fund may invest and to determine its current holdings. Mutual funds are actively managed portfolios and incur advisory fees and internal management costs. Investment in mutual funds does not assure a profit. The value of funds fluctuates, and, when redeemed, may be worth less than their original value. Source: Morningstar. Average based on 3,276 U.S. domestic equity open-end funds. Did you know? The typical mutual fund holds more than 150 stocks on average. Professionally Individual InvestorsManaged MoneyTop Holdings Examples CONSUMER The Procter & Gamble Company (Folger’s, Crest, Duracell, Gillette, Tide) ENTERTAINMENT The Walt Disney Company (ABC Television Network, Disney Channel, Walt Disney World Theme Park) PHARMACEUTICALS Pfizer, Inc. ( Zyrtec, Zoloft, Celebrex) TELECOMMUNICATIONS Verizon Communications, Inc. (Wireless, long-distance telephone, broadband Internet) CONSUMER McDonald’s Corporation TECHNOLOGY Microsoft Corporation (Windows computer software, Xbox video game system)

36 Diversification is a time-tested principle. Spread out your investment dollars to protect against market risk. What is the ideal asset mix? ? ? Source: Morningstar. Past performance is no guarantee of future results. This chart is for illustrative purposes only and does not represent an actual investment or the performance of any specific investment. All investments involve risk including loss of principal. See endnote 3 for specifics regarding asset classes. Bond prices will decline as interest rates rise. These securities do not carry guarantees like the bonds themselves.

37 Rate of Return is the Key Source: Morningstar. Past performance is no guarantee of future results. This chart is for illustrative purposes and does not represent an actual investment. Further, the returns do not reflect the past or future performance of any specific investment. All investments involve risk including loss of principal. The figures in the chart above assume reinvestments of dividends. They do not reflect any fees, expenses or tax consequences, which would lower results. Because these indices are not managed portfolios, there are no advisory fees or internal management expenses reflected in their performance. Investors cannot invest directly in any index. The figures represent an initial investment of $10,000. The Standard & Poor’s 500®, which is an unmanaged group of securities, is considered to be representative of the stock market in general. U.S. Long Term Government Bonds are represented by the U.S. Long Term Government TR Index, which has a maturity of 10 years or more. The U.S. 30-Day T-bills are government backed short-term investments considered to be risk-free and as good as cash because the maturity is only one month. Morningstar collects yields on the T-bill on a weekly basis from The Wall Street Journal. Treasury Bills are secured by the full faith and credit of the U.S. Government and offer a fixed rate of return, while an investment in the stock market offers no such guarantee. Inflation history is gathered from the Ibbotson Stocks, Bonds, Bills and Inflation module. Growth of a $10,000 Investment December 31, 1978 to December 31, 2008 What kind of return do you need to reach your goals? How can you invest to reach them? Investing in mutual funds may be a very good way! $228,858 S&P 500 Total Return 10.99% $54,888 30-Day Treasury Bills 5.84% $30,903 U.S. Inflation 3.83% U.S. Long-Term Gov’t Bonds 10.22% $185,492

38 Performance of TSP L IncomeL 2010L 2020L 2030L 2040G FundF FundC FundS FundI Fund Average Annual Returns 1-Year8.57%10.30%19.14%22.48%25.19%2.97%2.99%26.68%34.85%30.04% 3-Year2.85%1.56%(0.56%)(1.65%)(2.73%)3.86%6.18%(5.56%)(4.26%)(5.86%) 5-Year3.64%3.69%2.95%2.54%2.19%4.20%5.06%0.47%2.25%3.67% 10-Year-----4.62%6.39%(0.94%)-- Since Inception3.64%3.69%2.95%2.54%2.19%6.15%7.10%9.31%4.86%4.03% Inception DateAug-05 Apr-87Jan-88Jan-99May-01 Calendar Year Returns 20052.15%2.99%3.04%3.59%3.92%4.49%2.40%4.96%10.45%13.63% 20067.59%11.09%13.72%15.00%16.53%4.93%4.40%15.79%15.30%26.32% 20075.56%6.40%6.87%7.14%7.36%4.87%7.09%5.54%5.49%11.43% 2008(5.09%)(10.53%)(22.77%)(27.50%)(31.53%)3.75%5.45%(36.99%)(38.32%)(42.43%) 20098.57%10.03%19.14%22.48%25.19%2.97%5.99%26.68%34.85%30.04% YTD1.89%1.81%1.22%1.11%0.94%1.84%6.53%(0.11%)6.15%(4.81%)

39 Recommended Funds 13 Considerations 1.Performance vs. Index (S&P 500 etc) at least 1% better 2.Performance vs. Peer Group (Large Cap Value or Growth) at least 1% better 3.Short vs. Long Term Performance Long term performance under the same money manager will trump short-term or inconsistent performance 4.Manager Longevity in Current Fund Less than 20 U.S. stock funds have had the same manager on board for at least two decades. 5.Fund’s Longevity Minimum 5 year track record 6.Fund’s Fees Lower fees are better; don’t have to be the lowest 7.Fund’s Size Want $1Billion for sector funds; $2 – 15 Billion for others; greater than $30 Billion limits flexibility 8.Fund’s Turnover Ratio Want turnover ratios less than 60%; the lower the better.

40 9 Lessons from the Current Depression 1.Beware of market forecasts, TV analysis and even by experts. 2.The sectors than performed the worst in 2008 did well in 2009 (Emerging markets). 3.Never underrate the importance of asset allocation, particularly the inclusion of bonds. 4.Mutual funds with superior performance records often falter, particularly funds with a high concentration of a stock (Lehman Brothers) or sector (banking sector). 5.Avoid performance chasing. e.g. China funds

41 9 Lessons from the Current Depression 6.Avoid funds that exceed the category by a larger margin. 7.Avoid funds that use leverage. The first lesson is that leverage kills. 8.Continue to hold sectors which have negative correlations to the S&P. 9.Beware of financial innovation. Because most of it is designed to enrich the innovators, not investors. These products have taken down our national brokerages, investment bankers, national banks and hedge fund industry.

42 Chuck Futel & Associates Started in July 1983 Serve over 3500 families in the Tri-State (Ohio, Kentucky & Indiana) One of the largest minority businesses in the Tri-State Recognized by the Cincinnati Enquirer Offers solutions to retirement, investment, long term care, life, auto & homeowners insurance, debt, mortgages and credit repair Offers financial need analysis

43 Chuck Futel & Associates Our three promises: Education Integrity Complimentary and Courteous Service Chuck Futel & Associates 2300 Montana Avenue #105 Cincinnati, OH 45211 (513) 821-3332

44 End Notes An investor should carefully consider a mutual fund’s commissions, trailing commissions, management fees, charges and expenses, as all may be associated with mutual fund investments. The prospectus contains this and other information about mutual funds. Please read and carefully consider this information before investing. You can obtain a prospectus from your PFSI registered representative. Investing in mutual funds entails risk, including loss of principal. Shares, when redeemed may be worth more or less than their original value. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The variable annuity contract prospectus contains information about the contract’s features, risks, charges and expenses. The investment objectives, risks and policies of the investment options, as well as other information about the investment options, are described in their respective prospectuses. Please read the prospectuses and consider this information carefully before investing. You can obtain a prospectus from your PFS Investments registered representative. There is no guarantee that any of the variable investment options of a variable annuity will meet their stated goals or objectives. The account value is subject to market fluctuations so that, when withdrawn, it may be worth more or less than its original value. All variable annuity product guarantees are based on the claims-paying ability and financial strength of the issuing insurance company. Please contact your Registered Representative for complete details. Variable annuities are long-term investment vehicles designed for retirement purposes. Withdrawals of taxable amounts are subject to ordinary income tax and if made before age 59 1⁄2, may be subject to a 10% Federal income tax penalty. Withdrawals will reduce the living and death benefits and account value. Withdrawals during the first eight years of the contract may be subject to surrender charges. See the contract prospectus for more information.

45 End Notes There are a number of factors that can affect whether a portfolio will last through retirement. The table shows how the rate of withdrawal and various portfolio allocations can affect the chance of meeting income needs over a 25-year retirement. A high probability indicates it is more likely that an investor will meet their income need in retirement, while a low probability indicates that an investor is less likely to do so and may face a shortfall. Generally, the chance of a portfolio running out over a long retirement is less likely as the amount withdrawn decreases and as equities are added. It is assumed that a person retires at year zero and withdraws a required income need each year beginning in year 1. Annual withdraws are inflation-adjusted by the historical 1926-2007 inflation rate of 3.1% each year. Annual investment expenses were assumed to be 0.95% for stock mutual funds and 0.76% for bond mutual funds. The image was created using parametric simulation. This model estimates the range of possible outcomes based on a set of assumptions including arithmetic mean (return), standard deviation (risk), and correlation for a set of asset classes. The inputs used herein are the historical 1926-2007 figures. The risk and return of each asset class, cross-correlation, and annual average inflation over this time period follow. Stocks: risk 20.0%, return 12.3%. Bonds: risk 5.7%, return 5.5%. Correlation 0.04. Inflation: return 3.1%. Note that other investments not considered may have characteristics similar or superior to those being analyzed. Each simulation produces 25 randomly selected return estimates consistent with the characteristics of the portfolio to estimate the return distribution over a 25-year period. Each simulation is run 5,000 times, to give 5,000 possible 25-year scenarios. A limitation of the simulation model is that it assumes a constant inflation-adjusted rate of withdrawal, which may not be representative of actual retirement income needs. This type of simulation also assumes that the distribution of returns is normal. Should actual returns not follow this pattern, results may vary. Primerica Financial Services is an affiliate of PFS Investments, Inc. ©2009 Primerica Financial Services 38905/08SEC165-6/3.09

46 Retirement from IRS Colleen Keeton-Sims 41 st Annual Business Meeting & Training Seminar August 9 – 15, 2010  Cincinnati, OH

47 Retirement: Agenda Planning IRS plans (CSRS & FERS) Retirement reasons Helpful seminars Retirement estimate What may affect benefits? Questions & Answers

48 Retirement: Planning Hopefully you did the following: Verified your IRS Plan (e.g. CSRS, FERS) benefits Answered probing questions Set & met goals Diversified your portfolio

49 Retirement: Planning cont. p2 Answered probing questions: –When do I plan to retire? –What is required to retire? Determine comfortable amount Paperwork or necessary processes

50 Retirement: Planning cont. p3 Set & met goals –How I obtained the goal Determined critical objectives Made plan & checklist –Tracking purposes –Monitored status –Checked off tasks met –Followed up on incomplete items »marked for rework »required change

51 Diversified –Within IRS TSP contribution using IRS match Made outside investments – secured “nest egg” builders Personal savings Stock market IRAs Retirement: Planning cont. p4

52 Retirement: IRS Plans Civil Service Retirement System (CSRS) Federal Employees Retirement System (FERS)

53 Retirement: What is CSRS? CSRS –Hired before 1/1/84 –5 (+) years prior federal service –Regular CSRS employees fund Contribute 7% of basic pay –Law enforcement officers (LEOs) contribute 7.5% of basic pay

54 Retirement: CSRS Offset Hired before 1/1/84 –left federal service over a year –returned after12/31/83 Covered by CSRS and Social Security Contributes 7% Receives same CSRS benefits until age 62 –SSA eligible? CSRS annuity offset Irrevocable transfer option to FERS –Break in service 3 days (+) –During FERS open season

55 Retirement: What is FERS? Three tier Annuity plan –Basic FERS plan administered by Office of Personnel Management (OPM) Social Security Administration (SSA) Thrift Savings Plan (TSP) Required if hired after 12/31/83 Alternative for CSRS Offset

56 Retirement: Reasons Retirement eligible Offered early retirement –Reduction in force (RIF) –Realignment Disability –On the job injury workman compensation –Non-job related injury or medical

57 Retirement: Helpful seminars Attend pre-retirement seminar –Locally (Check with BeST) Advise manager want to attend –Interactive Video Teletraining IVT broadcasts held via satellite –11am-430pm EST: CSRS: 9/15/10 & 12/8/10 FERS: 9/16/10 & 12/9/10

58 Retirement: Helpful seminars Pre-retirement seminars cover –Retirement benefits –Social Security (SSA) –TSP –Federal Employee Health Benefits Program (FEHBP) –Long Term Care –Federal Employees’ Group Life Insurance Program (FEGLIP)

59 Retirement: Estimate reports Retirement estimates –Where & how to check retirement benefits HR Connect National finance (NFC) Employee Connection –On ERC page under “My Profile” tab –Click on “View my benefits information” link –Enter your SEID and Employee Connection PIN or default (last two digits of SSN followed by first two digits of SSN)

60 Retirement & benefit statement periodically sent to address on file –Request estimate 45-60 days prior Employee Resource Center (ERC) – 866-743-5748 option 1 or via IRWeb (Intranet) –OS Get Services Retirement: Obtain Estimate

61 After receive estimate contact –BeST Specialist Verify if benefits are available Select from eligibility options –keep or cancel medical with IRS –keep or cancel life insurance with IRS Avoid delay submit paperwork timely Retirement: Estimate Received

62 Once get estimate contact SSA –(Social Security Administration) Coordinate benefits disability retirement Medicare (Part A, B, C & D) Military (e.g. TRICARE) Retirement: Estimate Received

63 Errors & follow up: –Correct errors with BeST SSA –Verify all data received –If projected receipt date past –Received incorrect quote or pay –Submit paperwork timely Retirement: Errors & Follow up

64 Full retirement benefits affected –Seasonal or part time work –Leave (excessive) –Military pro: time served con: received retirement payouts –TSP cash out before age 59 ½ Retirement: Benefits Affected

65 Government Pension Offset (GPO) –Based on spouse’s work Retirement: Benefits Affected

66 SSA –Early retirement eligible (62 years) –Returns to work before full retire age –Makes more than allowed –Windfall elimination Based on your work Company did not pay into SSA –Teachers (some districts do but rare) –Postal workers Retirement: Benefits Affected

67 References Government Pension Offiset (GPO) based on Spouse: =193&QuestionID=1706 IVT: Windfall elimination based on you not spouse: =193&QuestionID=1705 =193&QuestionID=1705 Social Security Administration (SSA)

68 Questions & Answers 41 st Annual Business Meeting & Training Seminar August 9 – 15, 2010  Cincinnati, OH Make sure you signed in. Complete your questionnaire for Mr. Futel Complete the workshop survey for AIM Thank you for investing in your future

69 Presenters: Chuck Futel, VP of Chuck Futel & Associates Colleen Keeton-Sims Moderator: James E. Kent II Monitor: Debra Smith (McCall) 41 st Annual Business Meeting & Training Seminar August 9 – 15, 2010  Cincinnati, OH Financial Planning & 401K

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