Reaching Retirement with RSA-1

Decisions & Your Retirement 2018 RSA-1 Presentation - TRS Early to Mid-Career Seminar Decisions & Your Retirement Dreaming about retirement is fun, but are we making the right decisions and saving enough money to make our retirement dreams become reality?

Sources of Retirement Income Your monthly TRS Pension Benefit Social Security A Personal Savings Plan RSA-1 could be your Personal Savings Plan.

Topics To Be Covered Explanation of RSA-1 Deferred Compensation Plan Steps to opening an RSA-1 account Making Withdrawals from RSA-1 after retirement. Comparison of Tier 1 and Tier 2 pension benefits Importance of RSA-1 enrollment for Tier 2 retirees The power of compounding interest and importance of starting retirement savings early

What is RSA-1 and How Does it Work? RSA-1 is a voluntary Governmental Defined Contribution Plan. The plan is based on Section 457(b) of the IRS and authorized by the Code of Alabama. The plan enables you to set aside a portion of your salary today to save for your retirement tomorrow. RSA-1 contributions are not taxable for federal or state of Alabama income tax withholding, which directly reduces your tax liability.

Additional Benefits of RSA-1 If eligible to purchase permissible service credit, you may use money in your RSA-1 account to purchase that service. Accepts transfers from other employer-sponsored 457(b) plans Retirement Savers Credit* *Eligible tax credit is based on your Adjusted gross Income (AGI).

RSA-1 Has NO FEES! No membership fees No investment fees No administrative fees No membership fees No investment fees No transaction fees No commission fees The administrative cost for the operations of the RSA-1 Deferred Compensation is provided from the expense of the Employees’ Retirement System and Teachers’ Retirement System.

Who can participate in the RSA-1? RSA-1 participation is open to any member of: the Teachers’ Retirement System (TRS); the Employees’ Retirement System (ERS); or any public service employee . You can join RSA-1 at any time!

Opening Your RSA-1 Account is Easy! Complete the following forms found in the back of the RSA-1 Member Handbook that is available for you today! Plan Enrollment Form - mail to the RSA Beneficiary Designation - mail to the RSA Investment Option Election – mail to the RSA Authorization to Defer Compensation - give to payroll

2018 RSA-1 Presentation - TRS Early to Mid-Career Seminar Investment Options Bond Fund Majority Corporate & Governmental Bonds Stock Fund S&P 500 Index Fund Short Term Investment Fund (STIF) Mix of securities; U.S. Treasury bills & notes Members may change their Investment Option Election (IOE) once every 90 days.

Investment Decisions Dr. Bronner and the RSA Investment Staff do the investing for the RSA-1 Plan… … the same expert investment team that invests your regular TRS retirement monies!

Maximum Contributions to RSA-1 Under Age 50 $18,500 for calendar year 2018 Age 50 & Over $24,500 for calendar year 2018 Catch-Up Prior Year Unused Deferrals $37,000 - Three years prior to Normal Retirement Age (NRA)

Making Withdrawals from RSA-1 Separation of service, regardless of age Retirement Termination of Employment Distributions are Not required until age 70 1/2

Distribution Options at Separation of Service from RSA-1 Lump Sum Partial Lump Sum Equal Monthly or Equal Annual Payments Delay distribution of RSA-1 monies until age 70 ½. *70 ½ Distribution may be delayed until April 1, following the year you attain age 70 ½.

Keeping Track of Your RSA-1 Account 2018 RSA-1 Presentation - TRS Early to Mid-Career Seminar Keeping Track of Your RSA-1 Account RSA-1 account statements are issued quarterly. Monthly returns are posted on the RSA website. View your RSA-1 account online.

What Agency HR /Payroll Can Do: 2018 RSA-1 Presentation - TRS Early to Mid-Career Seminar What Agency HR /Payroll Can Do: Request an RSA-1 presentation Encourage new hires to take advantage of the benefit of contributing to RSA-1. Know that RSA requires original documents for any forms that need to be notarized. Submit Enrollment forms before before submitting the employee deferrals.

Do I have Tier 1 or Tier 2 retirement? Any member who began eligible employment with a participating RSA agency prior to January 1, 2013 Member Contribution Rate 7.5% Any member who began eligible employment with a participating RSA agency on or after January 1, 2013 Member Contribution Rate 6%

Pension Benefit Comparison Tier 1 (Benefit factor: 2.0125%) Tier 2 (Benefit factor: 1.65%) An RSA member who retires at age 62 with an average final salary of $65,000 and 25 years contributing membership service will draw a maximum annual retirement benefit of $32,700. Eligibility to retire is defined as 10 or more years at age 60 or 25 years at any age. An RSA member who retires at age 62 with an average final salary of $65,000 and 25 years contributing membership service will draw a maximum annual retirement benefit of $26,800. Eligibility to retire is defined as 10 or more years at age 62.

Tier 2 Retiree Deficit Over Time 1 year $ 5,900 5 years $ 29,500 10 years $ 59,000 15 years $ 88,500 20 years $118,000

The Power of Compounding Interest Start saving at age 25 deferring $100 every month, at age 55 your savings could amount to $100,451.50*. Start saving at age 30 deferring $100 every month, at age 55 your savings could amount to $69,299.40*. Saving for retirement at any age is a good thing, but starting to save earlier is better! *Assumes a 6 % rate of return

The Power of Contributing Early Years to Grow: 25 Monthly Contribution: $100 Total Investment: $30,000 *Future Value: $69,299 *Assumes 6% rate of return Years to Grow: 15 Monthly Contribution: $238 Total Investment: $42,840 *Future Value: $69,214 *Assumes 6% rate of return

Pay Yourself First! Get more RSA-1 information on our website: www.rsa-al.gov Call RSA-1: 877.517.0020 or 334.517.7000 Email RSA-1: rsa1info@rsa-al.gov

2018 RSA-1 Presentation - TRS Early to Mid-Career Seminar Questions?

2018 RSA-1 Presentation - TRS Early to Mid-Career Seminar RSA-1 COMMON QUESTIONS Q: Can I contribute after retirement? A: Only If you go to work after you retire part-time and are working for a TRS or ERS participating Agency Q: Is there a minimum contribution? A: No Q: What happens to my RSA-1 account at my death? A: Distribution is paid directly to you designated beneficiary.