national life insurance company® life insurance of the southwest® national life group is a trade...

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National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest (LSW), Addison, TX and their affiliates. Each company of NL Group is solely responsible for its own financial condition and contractual obligations. LSW is not an authorized insurer in New York and does not conduct CalSTRS Retirement System Overview Save for a better tomorrow LR#12998

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Page 1: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

National Life Insurance Company® Life Insurance of the Southwest®

National Life Group is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest (LSW), Addison, TX and their affiliates. Each company of NL Group is solely responsible for its own financial condition and contractual obligations. LSW is not an authorized insurer in New York and does not conduct insurance business in New York.

CalSTRS Retirement

System Overview

Save for a better

tomorrow

LR#12998

Page 2: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

Retirement Realities

Page 3: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

Dream…

Page 4: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• Build towards your goals

– Estimate your total retirement income

Plan…

• Plan to live longer than you think

• Lifetime Income• Savings

• Earnings• Other Assets

Page 5: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• Foundation for district employees

• System provides benefits and services

• Unfunded liability and budget shortfalls creating harder look at programs

Your State Pension Plan

Page 6: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• Determine Age Factor– Hired prior to Jan 1 2013: use 2% @ 60 Table

– Hired after Jan 1 2013: use 2% @ 62 Table

• Multiply by Total Service Credit

• Multiply by Final Average Compensation– 2% @ 60 member with 25+ service credit – use highest one year

compensation

– 2% @ 62 member or member with less than 25 total service credits – use highest consecutive 3 year salary

• Divide Annual Payment by 12 to get Monthly Payment

How to Calculate Your Pension Benefit

Source: CalSTRS Handbook, 2013

Page 7: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

Benefit Calculation: Example 2% @ 60

You’re averaging $59,825 per yearYou have 29 years of school service.

Your pension:

$2,891per month

Age Factor 2%

Multiplied by YOS x 29

Equals Payout Factor 58%

AFC Multiplied by $59,825

Equals Total Annual Benefit $34,698

Page 8: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

Payout Options

Member only benefit – level payments for life

100% Beneficiary Option

75% Beneficiary Option

50% Beneficiary Option

Compound Option – designate multiple beneficiaries to receive survivorship benefit

Page 9: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• Automatic benefit increase equal to 2% of initial benefit (non-compounded)

• If purchasing power of initial benefit falls below 85% of the initial benefit, a one year supplement will be paid.

Payment Increases

Page 10: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

Act…

All figures assume a 4% annual rate of return compounded monthly and do not include any matching contributions made by an employer which are available in some qualified retirement plans.

Page 11: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

– Buy years of service

– Explore savings options through employer- sponsored plan

– Create an income stream for life

Act…

• Can you live on a fraction of your salary?• Bridge the retirement gap

Page 12: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

Act…

This hypothetical example is for illustrative purposes only. Taxes are deferred until monies are withdrawn from the plan. This example is based on a teacher in the state of California claiming single and zero allowances not considering state taxes. Source: TRAK Software

Page 13: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

How Much Can Be Contributed in 2015?

• 15 year catch-up may apply if plan document permits (restrictions apply)

$18,000 Base

$6,000 age 50+ catch-up

Page 14: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• Subject to plan approval

• Allow for access without a qualifying event

• Low cost with no credit approval

• Must be paid back in five years or less

– Up to 25 years for primary home purchase

• Maximum loan amount subject to IRS guidelines

403(b) Loans

Page 15: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• Rule 1: Must be aggregated with all plans of the employer

• Rule 2: Cannot exceed the lesser of:

403(b) Loans – How Much Can Be Borrowed

$50,000Less any highest out-

standing balance

in last 12 months

50% of present value of participant’s non-forfeitable benefit

under the plan* less any outstanding loan

balance

*This amount will not be violated if the loan does not exceed the lesser of (1) $10,000 or (2) 100% of his or her vested account balance.

Note: IRS limits are for total maximum loans under the plan, carriers may limit the amount that may be borrowed from their individual policies

Page 16: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

403(b) Hardship Distribution

• Only employee contributions may be withdrawn• Maximum distribution limited to amount needed due to hardship and not available

from other sources • Contributions must stop for 6 months after hardship distribution

Medical Expenses Funeral Expenses Tuition Expenses(next 12 months)

Purchase Primary Residence

Prevention of EvictionForeclosure on

Mortgage

Casualty loss to employees primary

residence not covered by insurance

Page 17: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

403(b) Distributions

Elective deferrals cannot be withdrawn until:

Age 59 ½

Death

Qualified Domestic

Relations Order

Total disability

Separation from service

Distributions prior to age 59 ½ may be subject to 10% IRS early distribution penalty.

Page 18: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• Follow your dreams

• Now is the time to put your retirement income strategy in place

• Experience the financial security for a retirement lifestyle you have always dreamed of

Enjoy…

Page 19: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®

• This presentation represents our understanding of the tax code and state retirement plan

• You should always consult your tax professional or state retirement system about your individual situation

• Information believed to be accurate as of February 2015

Disclosure

Page 20: National Life Insurance Company® Life Insurance of the Southwest® National Life Group is a trade name of National Life Insurance Company, Montpelier, VT,

© 2015 National Life Group®