Supporting Retirement Readiness · Diversifying your income strategy 18. ... will affect your...
Transcript of 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!
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Looking Closer…
Social Security and
Medicare Facts
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Retirement Income
Social Security Example
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31% income
replacement
Social Security Quiz
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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
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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
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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
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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
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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
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Ready to Start Receiving Your Social Security Benefit?
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• 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
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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
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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
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Risk: Longevity—I can live a long time
Average Life Expectancy
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*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
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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)
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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
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Social Security • Medicare • Retirement Income Risks • Health Care Planning
CPG Resources: eLearning Library
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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: [email protected]
Tax Hotline
• The Rev. William
Geisler, CPA
(877) 305-1415
• Mrs. Nancy
Fritschner, CPA
(877) 305-1414
• Ms. Dolly Rios, CPA*
(833) 363-5751
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Questions & Answers
Disclaimer
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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
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