supporting retirement readiness · diversifying your income strategy 18. ... will affect your...

Pattie Christensen, ChFC®, RICP®

Grace Longo, ChFC®

Education & Wellness

October 1, 2019

Episcopal Business Administration Conference

Supporting Retirement Readiness

Your Trip Planner!

2

3

Looking Closer…

Social Security and

Medicare Facts

4

Retirement Income

Social Security Example

5

31% income

replacement

Social Security Quiz

6

Your full retirement age is 67, generally, you can begin

getting your own Social Security retirement benefits as early

as age 62. At age 62, your Social Security benefits will be

reduced by as much as 30 percent below what you would

receive if you wait until your full retirement age of 67.

YES

What is Your Social Security Full Retirement Age?

Full Retirement Age (FRA): age that you can take

unreduced worker and spousal benefits

7

1943–1954 1955 1956 1957 1958 1960+1959Born

FRA(year/month) 66/0 66/2 66/4 66/6 66/8 66/10 67/0

Can take:

Reduced benefit as early as age 62

Increased benefit if delay beyond

FRA up to age 70

Clergy Pension Plan’s

Normal retirement age is 65

Myth: If I claim at 62, I will have more money

Assumptions: FRA is age 67 with a benefit amount of $1,500 and does not take inflation into consideration. 8

$289,800

$324,000

$334,800

$1,050

$1,500

$1,860

62

67

70

Age of

Retirement Lifetime

Benefit

Social Security Quiz

9

You just turned 62 and your spouse has NOT

claimed his/her benefit. Will you be able to

claim a spousal benefit?

NO

Social Security Quiz

10

If you are 60 years old and divorced. Your marriage lasted

at least 10 years. Will you be able to get benefits on your

former spouse’s record today?

NO

Social Security Quiz

11

Depending on your other income, up to 85% of your

Social Security benefit may be taxed at the federal level.

YES

Want to Learn More? Take the Social Security

eLearning Course on cpg.org

12

Ready to Start Receiving Your Social Security Benefit?

13

• Can apply up to 4

months before the date

you wish benefits to

start

• Social Security benefit

depending on the date

of your birthday

– Born on March 14?

You will receive your

benefit on the

3rd Wednesday

• Payments occur after

the month they are due

• Social Security card or Social

Security statements

• Birth certificate

• Latest W-2 or self-employment

tax return

• Current year earnings statements

(pay receipts, etc.)

• Bank statement/check for direct

deposit

• Marriage certificate, divorce decree,

military discharge (form DD214),

proof of railroad service

• You MAY be asked to produce

other documents to verify your info

You will need:

Source: medicare.gov/your-medicare-costs/part-b-costs

• Medicare Part A is free

• Medicare Part B has a monthly

billable premium if not collecting

Social Security

• $135–Standard Medicare Part B

premium in 2019

– Income based (go to medicare.gov

to calculate your premium)

• Sign-up for Medicare through

Social Security

General Information on Medicare Part A & B Enrollment

14

General Information on Medicare Part A & B Enrollment

• Enrollment in Medicare A & B

can impact your ability to

contribute to a Health Savings

Plan (HSA)

• Avoid a Part B late enrollment

penalty

– Initial Enrollment Period

– Special Enrollment Period

15

Scenario 1: You are Not receiving Social Security and

Want to begin Medicare at age 65

Initial enrollment –

3 months before and

3 months after your

65th birthday

• Research Medicare

Supplemental Plans

Note: Medicare suggests you stop contributing to an HSA at least 6 months before enrolling into any

Medicare Plan—even Part A to avoid any tax penalties. 16

Scenario 2: Still working age 65+ and enrolled in an

employer-group health plan, you may:

Enroll in Part A only and enroll in

Part B when employment ends

Employers:

• Medicare Secondary Payer Small

Employer Exception (MSP SEE) –

Note: Medicare suggests you stop contributing to an HSA at least 6 months before enrolling into any Medicare

Plan—even Part A to avoid any tax penalties. 17

Creating Retirement Income Plan

Retirement planning risks

Diversifying your income

strategy

18

Risk: Longevity—I can live a long time

Average Life Expectancy

19

*Social Security; Benefits Planner/Life Expectancy

**Vanguard.com “Savings for Retirement, Plan for a Long Retirement”

Men*

84

Women**

86.5

Couple**

90 (for one)

Risk: Inflation—Costs keep going up

20

Product

Cost in

Year 2000

Today’s

Cost (Aug)

%

Change

Cup of Coffee $1.96 $2.70 4%

Gallon of Gas $1.51 $2.65 7.5%

Gallon of Milk $2.78 $3.04 9%

Source: Milk and Gas prices – Bureau of Labor Statistics

Cup of coffee: www.gobankingrates.com and in 2019 US News;

Risk: How much can you withdraw?

Use the Retirement Savings Spending Calculator

Source: Retirement Savings Spending Calculator; cpg.org 21

Ready to Retire? You still need a budget!

Source: Consumer Financial Protection Bureau 22

Income Options from Defined Contribution Plans

Guaranteed Income for Life

• Income for one

• Income for two

• Options to provide for a beneficiary

Systematic Withdrawals

Required Minimum Distributions

(RMD)

23

Risk: Health Care Costs

Health care costs as a percentage of household budget:

• Ages 55-64: 7% of budget*

• Ages 65-74: 10% of budget*

Couple retiring today needs $285,000 for medical expenses

in retirement**

• Medicare Premiums, Out of pocket expenses,

Medicare Supplement Plan premiums

Think about long-term care costs

24*2016 Consumer Expenditure Survey, Bureau of Labor Statistics (BLS)

**2019 Fidelity Retiree Health Care Cost Estimate, April 2, 2019

Recap

25

Social Security • Medicare • Retirement Income Risks • Health Care Planning

CPG Resources: eLearning Library

26

More CPG Resources

*Bi-lingual in Spanish and English

Complimentary Individual

Financial Discussions

• Committed to helping you

retire with more financial

security. Our dedicated

financial education specialists

understand the unique needs

of those who serve the

Episcopal Church

Church Pension Group

19 East 34th Street, NY, NY 10016

(800) 223-6602

Website: cpg.org

Client Services

Monday to Friday

8:30 AM to 8:00 PM ET (excluding holidays)

(866) 802-6333

Email: benefits@cpg.org

Tax Hotline

• The Rev. William

Geisler, CPA

(877) 305-1415

• Mrs. Nancy

Fritschner, CPA

(877) 305-1414

• Ms. Dolly Rios, CPA*

(833) 363-5751

27

Questions & Answers

Disclaimer

29

This material is provided for informational purposes only and should not be viewed as investment, tax, or other advice. In the event of a conflict between this material and the official

plan documents, the official plan documents will govern. The Church Pension Fund (CPF) and its affiliates reserve the right to amend, terminate, or modify the terms of any benefit

plans described in this material at any time, for any reason, and (unless required by law) without notice. The Clergy Pension Plan is a qualified plan under section 401(a) of the Internal

Revenue Code, but as a church plan, it is not subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA). An independent audit of the Clergy Pension

Plan’s financial condition is disclosed in the Church Pension Group Annual Report, which is available on our website at cpg.org.

The information presented here does not take into account the investment objectives, financial situation, or retirement needs of particular individuals. It is important that you consider

this information in the context of your personal risk tolerance, investment objectives, and retirement goals. You should not depend solely on this information in making any decision that

will affect your personal financial, retirement, or tax situation or before investing in any product. You should contact your own professional advisor prior to making any such decision

and for details on how such decisions will affect your personal legal and tax situations.

Always seek the advice of a health care professional with any questions about your personal health care status, and prior to making changes in your approach to diet and exercise.

Check your Plan Document Handbook carefully to determine which health care services are covered.

CPF plans to continue to provide the Medicare Supplement Health Plan subsidy. However, CPF must maintain sufficient liquidity and assets to pay its pension and other benefit plan

obligations. Given uncertain financial markets and their impact on assets, CPF has reserved the right, in its discretion, to change or discontinue providing a Medicare Supplement

Health Plan subsidy.

Life insurance is offered by or through Church Life Insurance Corporation, 19 East 34th Street, New York, NY 10016 (“Church Life”). Like most insurance policies, Church Life's

policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. For complete details of coverage, including exclusions, limitations, and restrictions,

please consult the actual policy or certificate. Products and features may not be available in all states. If the descriptions of the Church Life products in this document conflict with the

terms of the actual policy, then the terms of the actual policy will govern.

Church Pension Group Services Corporation, doing business as The Episcopal Church Medical Trust (the Medical Trust), maintains a series of health plans for employees (and their

dependents) of the Episcopal Church. The Medical Trust serves only ecclesiastical societies, dioceses, missionary districts, or other bodies subject to the authority of the Episcopal

Church. The benefit plans maintained by the Medical Trust are intended to qualify as “church plans” within the meaning of Section 414(e) of the Internal Revenue Code, and are

exempt from the requirements of ERISA. The health plans that are self-funded are funded by The Episcopal Church Clergy and Employees’ Benefit Trust, which is a voluntary

employees’ beneficiary association within the meaning of section 501(c)(9) of the Internal Revenue Code.

Unless otherwise noted, websites references herein that are outside the cpg.org domain are not associated with The Church Pension Fund and its affiliates (collectively, the “Church

Pension Group”) and the Church Pension Group is not responsible for the content of any such website. Unless otherwise noted, the Church Pension Group does not endorse any

organization, product, or services that are unaffiliated with the Church Pension Group.

#2019CPGEBAC

30

Follow Us! ¡Síguenos!