MANAGING YOUR MONEY

THE BASIC FOR LONG TERM SUCCESS

Spend Less

Borrow Wisely

Protect against fraud Save More

Ever wonder at the

end of the month

where all your hard

earned money has

gone?

SPEND LESS:

TAKE A SERIOUS LOOK AT YOUR SPENDING

Create a Spending Plan (formally known as a budget)

Identify Needs vs. Wants

Cut from wants first (restaurant meals, premium TV,

subscriptions, memberships)

Consider Opportunities to save on necessities (public

transportation, buying used instead of new, look for sales, take

care of what you do have)

http://www.goodfinancialcents.com/best-free-online-budgeting-

tools/

SPEND LESS:

TAKE A SERIOUS LOOK AT YOUR SPENDING

Finally, don’t use credit to

buy things you can’t afford

p.s. remember that thing we used to call a budget?

It helps you decide how to spend your money and controls impulse buying

KEEP BANKING COSTS DOWN

Look at recurring charges on your statements

Review your habits to cut unnecessary fees

keep close tabs on your balance, no overdrafts

use only free ATM’s

Get as low of an interest rate as you can

Pay off as much as you can as soon as you can

Consider refinancing your home

Work your tail off to

get yourself in the

best place you can

and then stay put.

FIRST, YOU MUST UNDERSTAND

WHAT YOU HAVE AND WHAT IT

COSTS YOU

READ THE FINE PRINT

CHECK YOUR STATEMENTS

NOTE HOW YOU USE YOUR CREDIT

SHOP AND COMPARE WHAT IS AVAILABLE

NEXT, BE SMART WITH THE CREDIT

YOU ALREADY HAVE

PAY THE BILL ON TIME

DON’T RUN UP THE BALANCE

DON’T GET ADDITIONAL CARDS FOR

“FREEBIES”

KEEP AN EYE ON YOUR CREDIT REPORT AND

CREDIT SCORE

CREDIT SCORE…WHAT IS IT?

Numerical number that reflects how risky you are as a borrower

FICO Score is the most widely used score

Long before you need credit, get your score as high as possible

Credit Scores generally range from 300-850

Most folks score in the 600’s and 700’s

Most lenders consider anything above 750 a very good score

CREDIT SCORE…HOW IS IT USED?

Used to determine your credit worthiness

Helps determine what credit will cost you

Affects auto insurance premiums

Looked at as part of many job applications and promotions

Rental agreements and contracts terms

CREDIT SCORE…HOW IS IT CALCULATED?

Payment History – the first thing any lender would want to know is whether you have paid past credit accounts on time. This is also one of the most important factors in a credit score.

Amounts Owed – owing a great deal of money on many accounts can indicate that a person is overextended, and is more likely to make some payments late or not at all.

Length of Credit History – in general, a longer credit history will increase your score.

New Credit – is more debt, or the ability to obtain more debt, being taken on?

Credit in Use – what is the mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.

The median FICO score is 723 (2/14; FICO Labs).

BORROWING WISELY REQUIRES A GOOD

CREDIT SCORE

Get copies of your credit reports

www.annualcreditreport.com

free once every 12 months, 3 different credit bureaus

Experian, TransUnion, Equifax

Check to make certain all information is correct

Pay your bills on time

IMPROVING YOUR CREDIT SCORE

Understand how your credit score is determined

do you pay on time?

what is your outstanding debt

how long is your history?

how many and what type of accounts do you have?

have you applied for new credit recently

Beware of credit-repair scams www.ftc.gov

IMPROVING YOUR SCORE WILL HELP YOU:

Lower your interest rates

Speed up credit approvals

Reduce deposits required by utilities and landlords

Get approved for apartment rental

Get better credit card offers

If it sounds too good

to be true…it is.

COMMON SCHEMES

Mortgage Rescue Schemes

Any Loan “guarantee” with large upfront fees

Work at Home Schemes

“employer” steals your SS #, bank account numbers, etc.

Mystery Shopper Scams

usually involves wire transfers of deposited “bogus” checks

SCAMS AND SCHEMES

Fraudulent E-mails, calls from Financial Institutions

BANKS DO NOT CALL or EMAIL YOU TO CONFIRM

ACCOUNT NUMBERS OR PASSWORDS

Higher than normal interest rate offers on money market

and CD accounts

HOW TO PROTECT YOURSELF FROM RIP-OFFS

Be wary of requests for “updated” info…don’t share any personal information

create strong passwords, use alternatives to social security numbers

Be skeptical of any offer that requires upfront fees

Thoroughly research organizations that offer jobs, loans or deposits

Assume if the offer sounds unrealistic (especially if it is unsolicited and unfamiliar) …it is

IDENTITY THEFT & FRAUD…

DON’T BE AN EASY TARGET

Protect Your Personal Information

banks do not call or email you asking for your personal information

Don’t Carry unnecessary information on you

clean out your purse/wallet

Safeguard documents and other information in you home

Know what’s missing from your mail box

Shred all mail with relevant information, statements, offers, etc.

CURRENT RETAIL ISSUES

(TARGET, NEIMAN MARCUS, MICHAEL'S, AND WHOEVER IS NEXT)

Monitor Your Accounts

Sign-up for Alerts

Get New Cards

Change Account Numbers

Change Passwords

Don’t Share Personal Information

Get Your Free Credit Reports

Consider ID Theft Insurance

You work hard for

your money so

make your money

work harder for

YOU !

#1 CREATE YOUR EMERGENCY FUND

Self Insurance against unforeseen expenses

A minimum of 2-6 months of living expenses, more if

employment outlook is uncertain

Keep the $$ in a fairly liquid account i.e. money market,

short term CD, interesting bearing bank account

FDIC Insured would be best

www.myFDICinsurance.gov

OTHER TIPS ON SAVING MORE

Save for Long-Term Goals

may have to set those goals first (see goal sheet)

Pay Yourself First

automatic deposits from your paycheck

Start Small

“A latte a day” method

If you get a raise, save it

Use the money you “found” after doing your spending plan

SAVING…MORE TIPS

Review and Compare Your Existing Accounts

bankrate.com

ask questions of your financial institutions and planner

understand all fees associated with your accounts

Turn a Debt Payment into a Deposit

“snowball method” works well

Save, Don’t Spend a Financial Windfall

UNDERSTANDING THE TOOLS

Stocks

ownership, volatile, long-term

Bonds

fixed/steady income stream, less volatile

Money Market Investments

like cash, short-term, lower returns

Mutual Funds

professionally managed, automatic diversification,

thousands to choose from, differing objectives

UNDERSTANDING THE LINGO

Dollar Cost Averaging the outcome of systematically investing a predetermined amount of

money on a predetermined schedule

Asset Allocation process of investing in a combination of asset classes to create a

diverse portfolio

Risk & Return the greater the risk the greater the potential return, all investments

carry risk

consider tolerance, timeframe and goals

ULTIMATE SAVINGS GOAL…RETIREMENT

2014 OEA Wellness Conference PERS Basic and Beyond

Northwest Retirement Services

Services include:

Retirement income projections

Social Security benefit strategies

Wealth transfer & estate planning

Debt reduction and budget planning

Investment planning options

Life insurance and long term care needs analysis

Domestic partnership planning

PERS Membership

• Normal retirement age

• 58 or 30 years of service

• P/F 55 or 50 with 25 years of service

• 8% annual earnings Tier1

• Established in August 1996

• 60 or 30 years of service

• P/F 55 or 50 with 25 years of service

• No guaranteed earnings- market returns Tier2

• Established January 2004

• 65 years or 58 with 30 years of service

• P/F 60 or 53 with 25 years of service

• No market return- Defined benefit

OPSRP OR Public Savings Retirement Plan

How IAP Works For You!

IAP = Individual Account Program

Effective January 1, 2004

Employee contributions: 6% of Salary

Investment options - NONE! O.I.C. controlled

Retire from PERS = Retire from IAP

IAP Benefit Options at Retirement

Lump sum - mailed directly to you

5 – 10 – 15 – 20 year installments

Life span options

Rollover to Individual Retirement Account (IRA)

Determining which benefit

option maximizes

Retirement Income

Lump Sum

Annuity Option

1,2 or 3

Personal Balance Sheet

Client Summary

James Bond April 1, 2014

1 Prineville Home Approximate Value $ 240,000 *

Owe @ 3% $ 95,000 2 Montana Property Approximate Value $ 300,000 *

Owe @ 3% $ - 3 PERS Tier I Approximate Value $ 309,896 *

$154,948 x 2 4 IAP Approximate Value $ 34,540 *

6% of Salary Monthly $ 450 5 457 Def. Comp Approximate Value $ 35,000 *

Acct. # 5431 Monthly $ 400 6 ROTH Approximate Value $ 24,000 *

Acct. # 2687 Monthly $ 150 7 Credit Union Value $ 15,000 *

Savings/Checking Monthly $ 150 8 Life Insurance Value $ 200,000 *

Policy # 2567 * Values needs to be updated TOTAL $ 1,158,436 *

Your Income options

Option 1 $3,130

15yr certain $2,950

Refund Annuity $3,080

Option 2 $2,730

Option 2a $2,680

Option 3 $2,910

Option 3a $2,888

Half Lump Sum $146,820

LSS1 $1,840

LSS2 $1,610

LSS2a $1,580

LSS3 $1,720

LSS3a $1,700

Total Lump Sum $293,640

Retirement Date Calculation

5/1/14

FDGFDVCB

PREPARED FOR:

PREPARED BY:

DATE:

©2011 Northwest Retirement Services, Inc.

Northwest Retirement Services Inc. is not affiliated with or employed by the Oregon Public Employees Retirement System. Northwest Retirement Services Inc. 4725 Village Plaza Loop, Suite 201

Eugene, Oregon 97401 541-686-1795

PERS *Options OPTION 1

$

$

• OPTION 2

$

$

• OPTION 3

$

$

* Other PERS estimate options are available based on age, account balance, and actuarial tables

- OPTION 2(A) Pop-Up

Member Income No Benefits For Surviving Spouse

Member Income Full Benefits For Surviving Spouse

Member Income Half Benefits For Surviving Spouse

- OPTION 3(A) Pop-Up

$

$

f

½ PERS Lump Sum Rollover Analysis Estimate of Pension Annuity Benefits on

$

EMPLOYER $

MEMBER $

Monthly Irrevocable Income Option Chosen 1, 2, 2(A), 3, 3(A)

$

$

$

$

Monthly Income From IRA at

Pre 59 ½ Section 72(t) Monthly Income at

%

%

Total Monthly Income from Member and Employer Balance

72(t) programs are complicated and are not appropriate for all investors. It is recommended that investors seek the advice of a professional tax preparer prior to setting up distributions to determine suitability. Once established, changes or modifications to a 72(t) program may incur severe penalties from the IRS. 72(t) distributions from a qualified plan are still subject to normal taxation . Investors should note that distributions taken under a 72(t) program may be subject to surrender charges and/or early redemption fees based upon the type of investments held within the qualified plan.

Total PERS Lump Sum Rollover Analysis

Estimation of Pension Annuity Benefits on

EMPLOYER $ $

MEMBER

Income Per Month at

Pre – 59 ½ Section 72 (t) at

%

%

$

$

$ $ $ IRA $ $ $

Advantages/Disadvantages Lump Sum Rollover

Advantages

1. Investment Control

2. Control of Taxation

3. Control of Income

4. 70 ½ Minimum Distribution

5. Pre 59 ½ Section 72 (t)

6. Balance to Heirs – Stretch IRA

7. Roll to Roth IRA

8. IAP can be Rollover to IRA

Disadvantages 1. No Cost of Living Allowances

(Not Guaranteed by PERS)

2. Higher Monthly Income with PERS

A Roth IRA distribution is qualified if you’ve had the account for the least five years and/or the distribution is made after you’ve reached age 59 ½, because of your total and permanent disability, in the event of your death or for the first-time home buyer expenses. Distributions made prior to age 59 ½ may be subject to federal income tax penalty.

SUMMARY

The Retirement estimates are based on projections received from your personal state pension plan. Market conditions and future legislation could have an effect

on these retirement income estimates. We note that it is your responsibility to ensure the numbers and calculations provided are accurate and can be

substantiated. We also offer no comment regarding the legal nature of the signature portion provided here.

Client Signature Date

Representative Signature Date

SECURITIES OFFERED THROUGH ROYAL ALLIANCE, INC., MEMBER FINRA & SIPC. Northwest Retirement Services Inc. is not affiliated with Royal Alliance Associates Inc. or registered

as a broker/dealer or investment advisor.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Your Personal Bucket List

Signed Date

X

PERS Lump Sum

Rollover Analysis

Estimate of Pension Annuity Benefits on 1/1/2014

Employer $ Member $

$225,000 $225,000

Double Lump Sum

$ 450,000 Monthly income

from IRA % 5

•Primary & Contingent

Beneficiaries

2,250

Lump Sum Rollover Options:

Pros Cons

Control of investment

Balance to heirs

Income flow stop or start

Can defer balance

Pre 59 1/2 distribution

IRS 70 1/2 min. distribution

Can roll IRA to Roth

Guaranteed income for life

No possible 2% Cost of Living

Adjustment (COLA)

No Guaranteed income for life

Investment decisions

Could lose principle value on

Investment

No investment decisions allowed.

Decided by O.I.C.

Once IAP income has started, you

cannot change your decision.

Cannot do “60” day withdrawal and

put back Into IAP

Zero liquidity. Takes 90-120 days to

get the IAP account rolled over.

No guarantee of interest that the IAP

earns. Payout is based on PERS

Board annually.

Death claim to heirs can take 90-

120 days.

IAP Options to Roll to IRA

Control of IRA Account, you own it

Multiple options with IRA. You have

endless funds to choose from.

Primary + Contingent + Generational

Beneficiaries.

100% Liquid at all times if needed.

Can roll to a Roth IRA.

Potential guaranteed Income for life.

Can donate income to charity.

You are able to do a stretch IRA for

Beneficiary.

“If you can’t explain it simply, you don’t understand it well enough.” –Albert Einstein

Pros: Cons:

Benefits and Tax considerations

Monthly benefits subject to

State and Federal taxes

-Federal tax only, no

Oregon tax

-No tax withholding for

any other state

OREGON RESIDENT NON- OREGON RESIDENT

What is B.I.F!?

B.I.F. (Benefits in Focus)

If you leave employee and employer contributions in PERS at

retirement your entire amount is transferred to the B.I.F.

2% COLA unless legislature amends the law

Board determines the B.I.F. earning percentage

Deficit occurs, employer is liable

Earnings occur in B.I.F. reserve used to offset deficits in the

actuarial valuation account and helps pay 2%

Buy Back Options

Option to purchase your first 6 months of services

Military, out of state teaching, and refunded time

What is the cost?

What are the benefits?

P/F units

Purchase- (8 units)

Employee Cost = $4,000

Employer Cost = $4,000

Payroll reductions or buy back

Benefits

$160 per month for 60 months

How to Access Social Security Info,

Benefits & Statements Online

Go to http://www.ssa.gov/myaccount/

Click on ‘Create an Account’

Enter in all information requested

Once your account is created you will be able to

access your Social Security benefits and

downloadable statements online anytime!

James Bond RETIREMENT ASSET BALANCE SHEET

AGE 58

RETIREMENT AGE 60 May 1, 2014

Monthly income desired during retirement after taxes and inflation: $4,000 Current Assets

Product Market Value* Monthly Contribution Asset Class

1 IAP $67,000 $475 B 2 DEF COMP $75,000 $1,570 B 3 SEPP-IRA $160,000 B 4 X 5 X

* Value as of May 1, 2013

DEFINED BENEFIT Asset Class Key

MONTHLY Capital Pres. C SOCIAL SECURITY# Income I 1 CLIENT $1,749 Balanced B 2 SPOUSE $0 Growth G PERS# High Yield H 3 CLIENT $2,000 Aggres. Growth A CURRENT VALUE

4 SPOUSE $0 CURRENT VALUE

*THIS IS A SAMPLE RETIREMENT

INCOME PROJECTION AND IS

NOT TO BE USED FOR

INVESTMENT PURPOSES

James Bond ESTIMATED RETIREMENT PROJECTION

RETIREMENT AGE 60

May 1, 2014

CURRENT AGE 58 Retirement Surplus or

YEARS UNTIL RETIREMENT 2 Goal (Deficiency)

MONTHLY INCOME AT RETIREMENT 60 TOTAL GROSS INCOME * $3,962

AFTER TAX INCOME $3,170 TODAY'S EQUIVALENT $2,988 $4,000 ($1,012)

MONTHLY INCOME AGE 62

TOTAL GROSS INCOME * $5,792 AFTER TAX INCOME $4,633

TODAY'S EQUIVALENT $4,117 $4,000 $117

MONTHLY INCOME AGE 72 TOTAL GROSS INCOME * $6,849

AFTER TAX INCOME $5,479 TODAY'S EQUIVALENT $3,622 $4,000 ($378)

MONTHLY INCOME AGE 82

TOTAL GROSS INCOME * $8,213 AFTER TAX INCOME $6,570

TODAY'S EQUIVALENT $3,232 $4,000 ($768)

NUMBERS REFLECT INTEREST ONLY ON DEFINED CONTRIBUTIONS

IF YOU ELECT TO TAKE INTEREST AND PRINCIPLE OVER YOUR LIFE EXPECTANCY, MONTHLY GROSS INCOME INCREASES $391

* "TOTAL GROSS INCOME" is calculated by adding the monthly investment income, any pension plans with an appropriate cost of living adjustment, and social security with a cost

of living adjustment. All of these figures are provided by the client and cost of living assumptions are stated in the Assumptions box on page 3.

PERS Rules you should know

Trustee to trustee transfer to purchase buy back and

refunded time

2 free benefit estimates per year

Working after drawing benefits

Verification of employment history

COLA date - guaranteed?

120 day rule

Thank you for your attendance!

Please take a few minutes to fill out the

information card.

www.nfcc.org

www.mymoney.gov

www.quickbooksonline.com

www.mint.com

www.frugalliving.about.com

1. The Total Money Makeover

2. How to Get Out of Debt, Stay Out of Debt, and Live Prosperously

3. Your Money or Your Life

4. All Your Worth: The Ultimate Lifetime Money Plan

5. I Will Teach You to Be Rich

6. The Complete Tightwad Gazette

7. The Random Walk Guide to Investing

8. The Millionaire Next Door

9. Work Less, Live More: The Way to Semi-Retirement

10. Why Smart People Make Big Money Mistakes (and How to Correct Them)

RESOURCES

Teresa Muench

800.708.4632

tmuench@neamb.com

Thank You for Coming!

Northwest Retirement Services

Bill and Matt Hoffman

541-686-1795

Bhoffman@nwrs.com

Mhoffman@nwrs.com

PRESENTERS CONTACT INFORMATION