For Retired Members of Utah Retirement Systems

Holiday 2012 | Volume 30, No. 3

ESTABLISHING YOUR

» URS IRAs OFFER A NUMBER OF ADVANTAGES TO RETIREES | Page 6 » HOW TO SET UP A myURS ACCOUNT | Page 2

URS SAvingS PlAnS & TAxES

Distribution strategyDuring your career, as

you save money for retirement, you’re

in the “asset accumulation phase” of your life. After retirement, and as you start drawing down from your savings, you move into the

“distribution phase.” Let’s take a look at the various options and strategies you may use as you take withdrawals from your vested savings plans.

See STRATEGY, Page 4

Health & Wellness Personal Finance

Did you take your medicine today? Tips to stay on track

INSIDE » Know when URS Savings Plans require tax reporting, Page 3

HEAlTH & WEllNESS » Don't put your goals on ice just because the weather isn't ideal - just use common sense, Page 7

We can help set up withdrawals to meet your needs

It’s important to take your medicine as prescribed by your doctor. And, it’s best to stay on schedule.It helps you remember to take your prescription if you always take it at the same time every day, and it's also better for you. Here are some suggestions to help you remember: » Consider a pill box or pill minder. Use it to plan the week’s schedule.» Take your medication at the same time each day.» Set reminders.» Enlist the aid of a family member or friend.» If you forget your medication or run out while travelling, contact a local pharmacy to help you get enough to get you through your trip. n

What do George Foreman, Brett Favre, Michael Jordan, and you have in common? If you answered, “un-retirement,” this brochure might be for you. If you return to work for a URS participating employer following your retirement date with URS, you’ll want to know all the rules and restrictions for “post-retirement employment.”Download the brochure or call us at 801-366-7770 before you begin your new job. n

Holiday 2012 | Volume 30, No. 3

Utah Retirement Systems560 East 200 SouthSalt Lake City, UT 84102-2021www.urs.org

publications@urs.org

12/19/12B

Returning to work? Read this first

Cycles | Utah Retirement Systems Holiday 2012

Stay up-to-date on your benefits by creating a myURS account. View your pension information, manage your savings plans, access tax documents and URS account statements, and more.Go to www.urs.org or click here to create an account. You'll need your Social Security number and your URS account number. Find your URS account number on your URS statements or call us at 801-366-7770 or 800-695-4877.Once created, access your account at www.urs.org. Enter your URS ID and PIN in the top-right corner. n

one-stop account access

URS values your privacy. We never sell or otherwise share your private information, including your email and mailing address, to any outside entity.

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Featured Download

Remember when...1930s » This was the first full-color, all-talking wide-screen movie, released in 1930.

1940s » This player’s signing opens the door to integration in Major League Baseball.

1950s » The United States and Canada join this organization that creates a unified aerial defense system.

1960s » Customers really “cash” in with the invention of this banking apparatus in London.

1970s » The first cell phone call is made in 1973 by an employee of this company.

1980s »This wall comes down, leading to the reunification of Germany.

Answers: 1930s: Song of the Flame | 1940s: Jackie Robinson | 1950s: NORAD 1960s: Automatic Teller Machine | 1970s: Motorola | 1980s: Berlin Wall

With tax season around the corner, let's discuss the two tax documents that can be generated for URS Savings Plans (401(k), 457, traditional and Roth IRA).

1099RA 1099R is required if you take a distribution, which includes the following types of transactions:» withdrawals» rollovers» conversions» recharacterizations» required minimum distributions (RMDs)» refund of excess contributions» loan defaultsIf you have taken any of the above in 2012, you’ll get an IRS Form 1099R in January 2013 for tax reporting. You can also access your 1099R at

myURS. A loan from a 401(k) or 457 plan won't generate a 1099R.

5498A 5498 is generated if you have a balance in your traditional or Roth IRA at the end of the year. You will also get a 5498 for these types of IRA transactions:» contributions » rollover contributions» conversions» recharacterizations» repayment of qualified reservist distributionsIf you have a balance in your traditional or Roth IRA at the end of 2012, or have had any of the above transactions, you will receive an IRS Form 5498 in the spring of 2013 for tax reporting purposes. You can also access your 5498 at myURS. n

Have a 401(k), 457, or IRA from an old employer? Why not roll it over to URS?Some of the benefits of consolidation include:

» Ease of managing your accounts

» Local customer service

» Professionally managed investment options

» Low investment and administrative feesIf you ever consider rolling money over to another financial institution, be sure to review its fees and investment options to make sure they meet your needs. Even small increases in fees, over a long period of time, can add up to thousands of dollars. Be sure to ask a representative of your financial institution to clearly detail and explain all fees, requirements, and restrictions of any plan in which you have money invested. And, don’t be afraid to ask for further explanation of financial terms you don’t understand. n

Consolidating savings plans makes sense

urs savings Plans May require tax reporting For example, if you take a distribution or rollover to an IRA

Learn moRe» Access your 1099R and/or 5498 at myURS

» Learn more at irs.gov

» Call us at 800-688-4015 or 801-366-7720

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Taxes URS Savings Plans

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Cover Story

STRATEGYContinued from Page 1

To begin, it’s important to understand your sources of income and whether they are fixed or variable. A fixed benefit could be Social Security, your monthly retirement (pension) benefit, or a combination of both. Generally, you can count on these to continue through your life, and you don’t have to worry about running out of money. Variable benefits are those that can change according to interest rates, investment returns, and/or the speed at which you spend – such as a 401(k), IRA, or savings account at the bank. If your fixed benefits will provide you with an adequate income, you have more flexibility in how and when to withdraw your variable savings plans. On the other hand, if you depend on your savings plans to maintain your lifestyle and health, how quickly you spend is vital.

Periodic DistributionsOne of the benefits of URS

Savings Plans is your ability to establish periodic withdrawals. Consistent

periodic withdrawals allow you to control how long your money will last. You decide if your regular payments come monthly, quarterly, semiannually, or annually. These payments can be automatically deposited to your checking account, and will be combined with your monthly retirement benefit (if applicable).

Fixed AmountSuppose you get $3,000 each month from a combination of Social Security and URS pension benefits. Let’s also suppose you need an extra $500 per month to live comfortably. You can set-up a fixed amount to withdraw from your savings plans each month and modify it as your needs change. With this method,

be sure to multiply out how many years your money could last.You can also instruct us to calculate a fixed amount determined by the number of years you want your savings to last, combined with an assumed rate of return. For example, if you have $50,000 in your account, you want it to pay monthly for 20 years, and you believe the plan will earn at least 4% per year over that period, your payment stream would be $300 per month. Each year you can review the rate of return your investments have actually earned and make adjustments to your assumptions, increasing or decreasing your withdrawal rate accordingly.

See STRATEGY, Page 5

LeT US HELP

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We can help you figure out your distribution strategy and set up withdrawals. Call or visit 8 a.m. through 5 p.m. Monday through Friday.

801-366-7720 | 800-688-401(k)560 East 200 South, Salt lake City

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Cover Story

STRATEGYContinued from Page 4

Finally, you can simply tell us how many years you want your money to last. Each year we divide your balance by the number of years remaining and adjust the payout accordingly. For example, suppose you have $50,000 and you want it to last 20 years. The first year we would pay you $208 per month (($50,000/20)/12). The next year we would divide your remaining balance by 19 years, etc. Using this method, you can control the number of years your account will pay you, regardless of stock market movement and earnings.

Minimum DistributionsWhen it comes to tax-deferred retirement plans (such as a 401(k) or traditional IRA), federal law requires you to withdraw a portion of your account each year, beginning the year you turn 70½ years old. If your fixed assets pay you an adequate income, you could choose to take the bare minimum from your savings plans. URS can compute the amount for you, and send it out each year, monthly, quarterly, semiannually, or annually – your choice. If you

don't specify otherwise, we send it each fall, combined with your retirement benefit.The IRS publishes a chart to determine how much you must withdraw. The following is a sample:

Age Factor

70.5 27.4

71 26.5

72 25.6

73 24.7

74 23.8

75 22.9

How it works: You obtain the balance in your account as of Dec. 31 in the year before your age shown in the chart. You divide that balance by the corresponding factor. For example, someone who is 70½ years old with an account worth $50,000 must withdraw $1,825 for that year (50,000/27.4 = 1,825). Again, URS is happy to compute this for you and send it each year.If you choose to use one of the periodic distribution options discussed above, and if those payments exceed the required minimum distribution, you will not need to go through this process. Another benefit we provide: Each year we monitor our members’ 401(k) and 457 accounts to make sure they meet this requirement, regardless of the other withdrawal methods used.

Roth IRAOne of the advantages of a Roth IRA is you're never required to withdraw money. If you are over 59½ and have had the account open for at least five years, all withdrawals are tax-free. Therefore, the IRS isn't concerned if you do not withdraw the money during your lifetime (if yours is a beneficiary, or inherited, Roth IRA – you must still take out a required distribution).

Partial Balance DistributionsYou are always allowed to withdraw a portion of your account, even if you have other methods of periodic distributions established. Just a word of caution when you reach in and take large chunks from your account, the withdrawal is generally taxable. It is often advisable to spread your taxable distributions over several years to soften the impact of income taxation.

We're Here for YouOur counselors are trained and available to help you with your questions regarding all aspects of your savings plans. Call or come into our offices at your convenience. You can also use our Savings Plans Future Values Calculator to help you model your distribution phase. n

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URS Savings Plans

You may be retired, but that doesn’t mean your retirement savings plans must stop working. The URS Roth and traditional IRAs can continue to help make your money work for you. Here are a few benefits.

Tax Planning » You decide when to pay income tax by converting money from your pre-tax retirement accounts (401(k), 457, 403(b), traditional IRA, etc.) to an after-tax URS Roth IRA. » A traditional or Roth IRA allows you to opt out of federal tax withholding. Simply roll over or convert your retirement savings plans to a URS traditional or Roth IRA, and say goodbye to the mandatory 20% withholding.

Continue Saving for the Future

» As a retiree, you can contribute to an IRA as long as you have earned income (wages) or income from self-employment. Social Security

or income from retirement plans are not considered earned income.

Consolidation» You can roll over pre-tax amounts from the different retirement accounts you have accumulated over your career into a URS traditional IRA. Having your money in one convenient place can make managing your finances easier.

Investments» The URS traditional and Roth IRA offer the same professionally managed core investment options as the URS 401(k) and 457. The low fees are also some of the best in the business. n

ConTribUTion LimitS

Learn moRe aT www.UrS.orG

The 2012 contribution limit for both the traditional and Roth IRAs is $5,000 (combined), with an additional age 50 catch-up provision of $1,000.

You can make IRA contributions after the end of the calendar year. Your contributions for 2012 can be received until April 15, 2013. (These limits do not apply to rollovers and conversions.)

Consider the advantagesUrS TrADiTioNAL AND roTH ira

As a retiree, you can still contribute and convert money » Download the URS

Roth & Traditional IRAs Guidebook to learn more details about these excellent plans

» Learn about IRA investment options

» Check daily values of URS investment funds

If being more physically active is one of your goals for the new year, don’t let the cold temperatures keep you from getting outside. Outdoor activity and exposure to natural light can increase your energy, decrease tension and frustration, and help fight depression. In fact, because your body works harder in the cold, it boosts the production of feel-good hormones called endorphins. If the weather isn’t extreme, an outdoor workout can be just what you need. Imagine going for an invigorating jog through the gently falling snow or the exhilaration of sliding down the ski slope or gliding across an ice skating rink. If you’re up for getting out, here are a few tips to help you make the most of your cold-weather workout while staying safe and warm.» If you have certain conditions, such as asthma, heart problems, or Raynaud’s disease, check with your doctor first.

» Know what the weather is going to be like before you go out, so you can be prepared. Consider shortening your workout or skip it if the weather is extreme. » Dress appropriately. In the cold, blood flow is concentrated on your body’s core, leaving your hands and feet vulnerable to frostbite. » Move safely. Get your muscles and joints ready to go with a dynamic warm up, followed by a short static stretch. Pay attention to your surroundings and foot placement as you walk or run.» Drink plenty of water, even if you don’t feel thirsty. Your thirst mechanism is reduced during cold weather. Fluid loss can occur easily when you sweat in insulated clothing.» Eating a meal or snack before outdoor exercise will help you maintain hydration. Eat warm foods if possible.» Don't overdo coffee and caffeine consumption, as they cause your body to lose heat more quickly.» Go easy on the alcohol. It’s a myth that alcohol warms you up; in fact, it increases heat loss by dilating the blood vessels. n

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viewpoint | Utah Retirement Systems Holiday 2012

Hot tips for Winter Fitness

Learn moRe

Don't put your goals on ice — just use some common sense

» More winter workout tips

» Winter health and fitness tips for kids

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