Hello everybody. My name is Darrell Smith. I’m with TCG group Holdings. I’m here today to talk to you about retirement plans and services that you have available through your employer. We focus on Educators and your retirement plans and needs and options. One of the things that we’re going to talk about today are one of the subjects we’re going to talk about today as we retirement income gap. Now the retirement income gap is something that’s created because with your TRS you will not get a hundred percent of your pay through TRS unless you work. Over years. Now I know to a lot of you that’s really scary. But TRS only provides a certain amount of income and you’re required on your own to provide the difference between that full income as when you’re working versus when you retire.
So on the left, you’ll see Educators and Educators have a TRS that on the average is about to percent of your retirement savings. You see a little sliver in Orange there that also is for Social Security and you may or may not get some of that Social Security and we’ll talk about that a little later. And then in the gray area, these are savings that you may have had on your own whether it’s in a savings account stocks bonds, whatever you have done on your own now if you compare that to your neighbors, which is somebody who works in the private sector somebody like myself. I’m required to do my own savings. So I have to contribute to my k at my company or I’ve have to like you folks have stocks bonds or other means of saving for retirement and then my Social Security portion is gonna be a lot bigger because from the time that you know, I started my employment career. I’ve been my jobs have always been the private sector so I’ve been putting into Social Security. So that’s why it’s a little bit different. What I wanted to talk about also is how do you get to your retirement?
How’s your retirement number through TRS figured that retirement formulas pretty simple. There’s really three things that you need to know years of service. There’s a state factor and then it’s the average of your three or highest five years of employment. So let’s talk about in our example here. We have a person who has years service. The state multiplier is . % And that’s the same whether you have five years of service or whether you have years of service. Everybody has the same multiplier. And the average income in our example here is $,. So let’s do the numbers. So the years of service times the . % multiplier equals %You take that % you multiply it by the, of your average salary and that gives you a maximum benefit of,. So not really hard to figure out you just have to find out what those numbers are. On this slide is the is a visual representation of somebody’s career and it just goes over everything that I just talked about. But you look at you see you start at a certain level and as your career progresses, you make more money and when you get to the end, you’re making an average salary in our example of $,. As we did the math in the previous slide, you noticed that that the teacher retirement income is,. So that retirement income gap shows that you have a % loss and income from the time you take your last check when you’re working versus your first check in retirement. I don’t know about you folks, but for me, I don’t think I could take a third of a third. Of my check loss going from working to retirement. That’s pretty tough to overcome. If you’ve done a good job saving that gray area of the pie chart, then you probably won’t have any issues here. But if you haven’t, you know, this is something that we could talk about now. We want to make sure that we’re working with you to achieve the amount of income that you’re going to need in retirement. So one of the ways that you can bolster that retirement or lessen that retirement income gap is your Social Security benefits that you may have. So one of the things I always want to make really really clear is that your TRS annuity is never going to be reduced by Social Security.
I’m gonna say that again your TRS annuity is not reduced by Social Security. Unfortunately, the opposite is not true. Your Social Security can be reduced because you have a TRS annuity or pension. There’s two regulations that come into play when we’re talking about social security and how it affects the reduction in your in your benefit. The first one is a wimpall elimination provision. And that provision is for your own social security benefit. It’s one that you’ve earned off your own earnings as you work. You may have working College you may have worked in high school. You may work to summer job while you were educator or you you may have consulted, you know, whatever process you use the government pension offset that is for a spousal benefits. So you’re entitled if you’re married to and to have of your spouse’s benefit that they qualify for. So the two Provisions are individual indifferent and there is a lot of calculations that go on that are related to these two provisions. One of the things I really really recommend is that you go on to ssa.gov and establish an account for yourself. Once you do that you’re going to be able to see all your yearly earnings and anything that you paid into Social Security and you’ll be able to figure out how many what what’s your what’s your data actually says and once you have that data, you can either you know, use the online tools there to figure out what your benefit would be but easier way would be to get with us and at the end of the This presentation you’ll see our contact information where you can sit down with one of our advisors and they can go through each of these provisions and talk about your Social Security individually.
The other way that you can bridge that Gap is to take advantage of some tools for savings that are related to your school district and what they provide your employer provides two types of plans one’s a b and one’s a four five seven. Both of these plans. If you’re familiar with a k that that like somebody like me has in the private sector, they’re very similar to that. There are also other types of plans that are not supported by the your school district, but are available to you in the outside of your school district. Those are either IRAs Roth IRAs, traditional IRAs or any other means of savings that you might have real estate stocks bonds and other types of things that you can use for retirement. But today we’re going to talk about the differences of the b and the and the similarities. Well so if you look at let’s talk about the similarities first contribution limits are basically the same and they are the same. Actually you can if you’re under years old, you can contribute,. If you’re over years old, you can contribute a maximum of, and that is for both plans. You’re not limited to have one plan or the other you could have both plans. Also something else that’s similar is the access to your funds the same things are going to be available for you. Obviously, if you leave employment you’re gonna have access on both plans if you’re disabled if you’re at retirement, and then also if you if you pass beneficiations will have access to those funds the things that are really different and this is where it becomes key where you want to make sure that you know all your options because both of these plans are great for savings, but they have different ways that they are. Age so the bs generally they are higher fee type plans and the reason why is because there’s commissions involved and there are there contracts that are involved as well. So when you sign up for a bThere are many of these plans where you have to keep your money in a specific type of investment for a specific amount of time. Whereas the four five sevens do not have that and that is one of the reasons why their fees are a lot lower. There’s no commissions. There’s no surrender charges. There’s no fees you can change your investment options whenever you want. So they’re quite a bit more flexible. The other thing is most people have heard about the % penalty for early withdrawal that’s imposed by the IRS. The IRS does impose that b but does not do that for four five seven and the reason why is because the four five seven was formulated for government employees. So, of course, they’re not going to charge themselves a % penalty, but you qualify under this under District as being able to contribute to a or b. Um, the investment types are a little bit different you have annuities usually with a b and very minimal amount of mutual funds on the side. You have self-directed portfolios or risk-based portfolios and mutual funds that you can choose from for the four five seven. So one of the things that I want to really stress is that our biggest goal is to help you understand what your options are. So here on this last slide. I want you to take the time to either schedule a phone call with one of our advisors, and the phone number for that is, or if you’d like to schedule a virtual appointment. You can do that at TCG Services Comm forward slash tele. Well, I want to thank you for your time today and please have a great day. Thank you.