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TRS-Care, Medicare and TRS Annuity Options

Recorded on July 1, 2022

Thanks everybody for joining today. We’re gonna discuss some TRS options Healthcare and other insurance and retirement. This presentation is going to be a little shorter than the TRS and Social Security presentation that you have may have watched in the previous months. So let’s go ahead and dive on in here.

So TCG, we’re here to help if you have any questions regarding the topics that we discussed today. Or topics in general in terms of preparing for retirement Insurance questions, whatever they may be feel free to schedule a Telehealth. Consultation. These are great. A lot of the things we’re going to cover today may generate very specific questions and oftentimes these are the right times to ask them. This QR code will be up at the end to so. If you don’t have a smartphone, you’re more than welcome to go to TCGservices.com/telwealth and there will be the link right there to get that scheduled for you to schedule an appointment.

So, for most you I imagine you’re approaching retirement or you’re considering retirement. The TRS website has some great resources that you should check out in addition to some videos and some pamphlets one pagers white papers, they should answer most of your questions. And if you have more feel free to schedule an appointment with us. We’re happy to answer those. There are probably a few things that were alluded to in maybe some other presentations that you have attended. But when considering your TRS benefit, here’s a couple factors that are really important. When kind of planning out your retirement, inflation’s a big one. The cost of goods generally rise around a two to two and a half percent each year. Your TRS benefit does not have a COLA associated or a cost of living adjustment. So that benefit is what you will receive for the rest of your wife. The Texas legislature does have the ability to increase that however, it’s been several years since there has been any kind of increase. Life expectancy people are living longer. So, you know, make sure that you plan out to or a hundred. When you’re working on your retirement budget a lot of people think that once I retire I’m not going to spend. Any, you know, I’m gonna spend less money than I have when I was working. You know, I’m not gonna go out and do these things maybe potentially and that seems to be the exact opposite people are spending more money in retirement because they have more time to go out do things during the week. They go to dinner during the week when it was previously. Maybe only done during the weekends. My suggestion would be make that retirement budget. And prior to retiring try to live off that budget and make sure that it’s doable based on the income you have allotted for yourself. Paying attention to your savings and then also Healthcare is going to be a huge factor in retirement and and we’ll talk about the costs associated with that. But also projecting those out will be beneficial.

Let’s talk about TRS options. So you really have six options in there the first being the standard annuity and that’s going to be the maximum benefit for the retirees life only. So if you take the standard annuity that will pay you your benefit. for the rest of your life if you retire May 1st, you get your first checked July 1st, and you pass away August 1st, that annuity ceases and you’ve received two months of that payment. What we have what we suggest to clients is either option one or option five. Two, three, and four generally fit a very specific situation for that individual and we’re happy to have those conversations of why you may consider two three or five. But for % of the individuals that are taking TRS. Please consider option one or option five. So option one is gonna be a % joint Survivor. This is going to reduce that standard annuity amount. All Park about %. However, when you pass away your beneficiary spouse significant other will receive a hundred percent of that pension for the rest of their life. The standard annuity reduction is based on the beneficiaries life. So if you’re planning on retiring and you’re at right now and your spouse or significant other is that reduction is going to be on the lighter side. So six to maybe eight percent. if you decide to include a child or somebody significantly younger. Let’s say years younger that reduction will be maybe % of that standard annuity amount and that’s to account for the fact that that individual or that beneficiary is going to be living significantly longer than yourself if you’re beneficiary passes away prior. To you being the annuitant you will be bumped up to that standard annuity amount. Option very simple to option one. The only difference here are actually there’s really two differences first being they’re gonna receive that sort of beneficiary is going to receive %of that check and the reduction is going to be less about six to twelve percent. Once again, that’s gonna be based on the age of the beneficiary TRS care. So in order to be to eligible for TRS care, you can’t be a member of ERS UT or the A&M Health System. You must take the TRS retirement. And you must have at least years of service credits and either meet the rule of or have or more years of service. So, how do I elect TRS care? Well, first of all, go ahead and get that request that packet from TRS, you’re gonna fill out the information send it back once TRS approves your packet. They’re gonna send the information to TRS Care at that point TRS care will send you out information. For you to fill out here. You will have three options when you receive. TRS care you can elect it. You can defer it for an election later. Or you can decline it. The one thing I want you to take away right now is if you decline it you cannot come back and take it. They’re having to there has been individuals that have been able to come back. It’s few and far between and there are a lot of Hoops to jump through. It is not guaranteed. So just good rule of thumb if you decide to decline TRS care. That is it. There’s no going back. You can. If you elect it, then obviously you will take it when you retire and you can always if you have a spouse still working. You can pause that TRS care you can stay on that spouses or significance others insurance. And then once they are retired you can you can elect that TRS care. Make sure you submit that form within days of your retirement date.

What happens when I’m taking TRS care prior to? You are going to have a high deductible plan. So in the very beginning we talked about kind of health care expenses. If you are not going to be on a spouses or significant others health insurance and you both are going to be retired by before the age of and going to be dependent on TRS care. As of the deductibles are down there. It is a high deductible plant. So there is going to be a significant amount of cost for your health insurance. So we want to make sure that we get that budgeted in when considering our retirement date and how much of our monthly budget we should allowed to health care or should it have in a emergency fund to account for unplanned emergencies, healthcare emergencies. Now this is a lot different if I am over the age of and taking TRS care. So TRS charism Medicare Advantage plan. You’re gonna have a lot more. You’re gonna have a lot lower out of pocket than those pre individuals. So what does that look like? What’s gonna happen is you’re gonna enroll in Medicare area A and B. And your TRS care is going to be your advantage plan everybody in the US qualifies for Medicare if paid into it Medicare part A is free for you and your spouse. Medicare Part B. There’s going to be a cost associated with that and that’s going to be based on your income. Then what you’re going to have is your TRS care in addition to that and your TRS car is going to operate very similar to a supplement plan. So we strongly suggest that you take TRS Medicare the TRS Medicare Advantage plan over private plans. This is probably because it’s subsidized by the state. It’s a open PPO plan. All in all it’s a great product. And if you have any kind of underlying health conditions or anything else like that. What you’re what you’re gonna see is if you go to a private plan either having more out of pocket or being subject to increases every couple years. So one of the thing that needs to be considered regarding TRS care is it’s very dependent on the Texas legislature right now. There is house bill for which was brought out by representative Ken King out of the Texas Panhandle specifically Canadian, that would repeal TRS care. Since most of the individuals on this call have a have a dog in the fight regarding their Healthcare after or once they retire we would recommend reaching out to your state representative or Senator and inquiring about this and see how you know their thoughts and how it would affect you and your retirement and basically we kind of wanted to lay out, you know, what would happen if TRS care was removed So Below, you know, if you’re younger than age for lack a better terms, you’re gonna be in some deep do I you’re gonna have to Source Healthcare on the open market through the Affordable Care Act. This is going to be rather expensive. Maybe a little cheaper than Cobra but this is what you’re gonna be looking at quite a bit of medical expense here to be insured below the age of in retired. If you’re over the age of you would. enroll in a Medicare Supplement Plan through an insurance broker not much would change. for the individual and older but once again that TRS care is a is a better product a better plan. So if that’s why we strongly recommend taking it. Versus having a sourcing, a Medicare supplement and on the open market. The terrorist Terrace website has some once again, it has some great resources for you. We employ you to go check them out read educate yourself before you make a decision. Because a lot of these are irrevocable or very difficult to change. So once you’re planted for retirement and you want to retire make sure you get that budget in place. Make sure you can fund these costs that healthcare costs your day-to-day living expenses make sure any debts that you may have those can be covered to understand your health care costs. All these things are going to be part of that budget because the last thing you want to do is retire and then realize several months in or several years later that you need to go back to work.

TRS has death benefits. If a member dies for the individuals that have under five years of service. They’re on this webinar. It’s going to be two times your anal rate of compensation or two times your credible. Cop up to $, . If you have more than five years of service. Your beneficiary will be allotted one of two-options month monthly payments equal to the standard annuity or option one, which would be the lifetime annuity. If there are any spouses or significant others on the phone in the event of the loss of your loved one, there can be a lot going on what you need to remember is option one. At the end of the day this is going to be the best option for providing income for you and for any other individuals that you need to support. So just remember in the event that this caption happens always choose option one. In addition to that monthly payment TRS also has some benefits up to , . This is generally for individuals that either have Children or a dependent parent if you’re subject to physical assault in the job and end up passing away. There’s also an additional hundred and sixty thousand dollars available. And you have to be an active member of TRS to get some of these benefits. If you are not there are some subject clauses in there that either element you to to specific benefits. The one thing that you always be entitled to will be that. Return of members accumulated contribution. So should you be not active and something happen and unable to claim some of those death benefits you still will be entitled to having that return of those accumulated benefits for TRS. And that’s located on the right side kind of middle of your your TRS benefit. TRS disability so conditions to receive disability.

The biggest thing biggest takeaway here is that the disability is probably permanent. And it may require recertification annually. If you have or more years of service. You’re gonna calculate your lifetime standard annuity. It’s going to be unreduced due to early age and you’re gonna take that years of service times the state Factor. and then obviously your final average salary at disability. The minimum benefit is a hundred and fifty dollars per month. And you you can pick other annuity options. Should you become disabled and take that early retirement. But those are based on actual early factors, too. So just need to be cognizant of that if you have fewer than years of service. That minimum payment still gonna be a hundred and fifty dollars per month. However there’s going to be a few other factors taken into account. And this is really why individuals that have not vested really need to which we will discuss here shortly consider that that long-term disability plan through their group benefits. So let’s go ahead and touch on those. You know, what other insurances are available. When do I need them? So first off I’m gonna slide all the way to the right side of the screen here and we’re going to talk about people that are probably five or more years outside of retirement. So and may not be vested at this point into TRS. Disability protection get that group policy either short-term or long-term disability. Those are going to be extremely important should something happen to you. That’ll help pay the benefits. That you have not earned through TRS.

As for life insurance, you will have group policies through those benefits available through your employer should you have other funding needs or income replacement needs? Such as College funding for the children or debt or other things along those lines. It may be advantageous for you to get a Term Policy. Outside of that group if you need under $, to satisfy any kind of funding or income replacement needs most of the time that group policy is going to be the cheapest option there. And generally does not require any kind of medical exam. Umbrella coverage. This is a very cheap way to add that extra layer of protection for you and your family. Should there be an accident or something that involves an insurance company that needs to pay out. This is generally tagged on to your homeowners insurance. And as those retirement income those retirement assets or other assets generally as your net worth grows. It’s good to continually to bump these umbrella coverage as up. They come in million dollar blocks. Sometimes it’s as low as to dollars a month. As we talk about individuals that are nearing retirement if you vested in TRS. And you’re playing a retiring it then maybe that. Long-term disability policy is not what you need to sign up for this year. Once again, you need evaluate. Where you are in TRS? Where are you planning on taking retirement? And does that extra cost add you any benefit for individuals that are near retirement. You know if I’m in my s. Life insurance is generally not a need for individuals. At that age should you have some debt or another financial strain or funding requirement? Should you pass away, that would burden that spouse significant other or loved ones then term insurance may be proper at this point. Once again, as you grow older than insurance is gonna become more costly. So just educate yourself do some reading and understand is that is that risk mitigation tool required in my life. Once again, umbrella coverage is always a great thing. Umbrella coverage is something you probably need to consider throughout your lifetime. Long-term care insurance. So this is something that has a product that’s been around for for many of years, but it really has come to the Forefront probably in the last years individuals are living longer. There’s been this trend from individuals wanting to are being in a nursing home to transitioning to being In-Home Care. Um, this can be a tremendous strain on your assets because of how costly not only nursing homes can be but also In-Home Care long-term care policies can also be very expensive so when you’re evaluating whether or not long-term care may be inappropriate Insurance to purchase whether you need to transfer some of that risk to a third party. What I would suggest doing once again is educating yourself understanding what exactly you’re looking for. And why you’re looking for it? Long-term care policies also often have Provisions requiring you should you need to use the benefit a certain amount of time before you can apply for that benefit. So you may need to move into a nursing home days prior to being able to receive that that long-term care benefit. what’s crucial here is to make sure that your retirement savings can fund. Those or days. Should you need in your later years to be admitted into a nursing home or require In-Home Care? Most of these policies like any other insurance policy you can add bells and whistles. Galore to these things once again understanding what those bells and whistles what that Cadillac gives you and you do you need it. There has been quite a few policies that have been created in the last several years traditionally long-term care insurance was much like life insurance. You paid a premium. Whole life or Universal you pay to premium and if the insurance company had increased cost they could increase those premiums over the years. Now there are products on the market that you can dump a lump sum into of , that would pay a benefit. They also allow you to have a return of Premium. once again Look for a product that Taylor’s what you need. If you believe you or an in need of this particular benefit and you would like I would say also consider should you end up not using this benefit or this policy? Does it give any does it give a return a premium to your heirs? Or does the insurance company keep all those all those premiums you have paid. If you do end up using the policy and what point will the insurance company pay? And then if you use x amount of that policy, will they and pass away? Will they transmit any of that benefit to your beneficiaries? Coming down to our retirement checklist. Once again educate yourself consult your handbook your online tools videos visit a counselor. If you once again would like to schedule an appointment with one of our retirement plans Specialists. They would be more than happy to assist you in understanding. Maybe some of these great areas. When is the best time I should take this? Should I consider TRS care I have this option for long-term care insurance doesn’t make sense. We do not sell insurance. And so we act as a fiduciary in terms of advising our clients along those lines. You know, make sure you contact TRS six months prior to your retirement date request that estimate that packet fill out form verifying complete. and then we’re gonna do is start collecting our pension. You know, let’s evaluate those TRS care options terminate the employee your employment by the effective date and I alluded to this earlier. But there is a month waiting period roughly between the time that you terminate your employment and when you first receive that pension check, so just be cognizant of that. So in this example if you retire May 1st, there’s the June way and you’ll receive that first pension check. In the beginning of July or the first business day of July.

So for those who have may have missed this in the very beginning. if you would like to schedule a Telehealth conf consultation with one of our senior retirement or retirement plan specialist, they would be more than happy to answer your questions about retirement plans TRS care Medicare how Social Security affects my potential social security benefit is affected by my TRS all those good things. If you have a smartphone you can scan that QR code and set up appointment if you would like prefer to do that over. the internet on a web page you can go to TCG services.com/telewealth and click through there and schedule an appointment that way. Here’s some disclosures. And lastly. There’s our phone number. There’s an email address which goes to all the advisors and individuals that offer consultation for it individuals at TCG. So you’re more than welcome to submit any questions you have via that. I would say the best way to get an answer. Um and be able to talk one-on-one about specifics in your situation would be to schedule that telewealth consultation. There’s been a couple questions that have popped up in the chat. First of all, if I request a complimentary consultation, do I have to pay? No? If you engage us for a particular service that we offer, there may be a cost associated with that. However, if you’re just interested in understanding, you know. How do I fill out my TRS packet or should I take this TRS benefit or should I take this annuity option over this annuity option those retirement plans Specialists are there to help answer those questions? And that’s absolutely free to you. This presentation will be emailed out. There’s also a recorded it’s being recorded and there’s also another recorded copy on our website so you can take a look at it.

Once again, the TRS website has some great resources. So I would say check that out first. Which will probably lead to more questions kind of develop that that list of questions and then schedule a consultation through Telehealth have all those questions there and somebody will be able to kind of walk you through. You know when you should take TRS what options should you take any other questions along those lines? You’re welcome to submit any other questions into the chat if you have something very specific. Once again, it’s best addressed through a consultation. Once again, if you have any questions, you’re welcome to direct message them to me in the chat. And I’ll be happy to to answer them.

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