welcome to redstone asmc 2014 mini pdi - orgsites as leadership huntsville and the committee of 100...
TRANSCRIPT
“THE MILITARY IS CHANGING, WHAT SKILLS
DO I NEED TO SUCCEED?”
Welcome to
Redstone ASMC 2014
Mini PDI
13 March 2014
Bldg 3711
Redstone Arsenal
What is the American Society of Military
Comptrollers?
To serve the Redstone/Huntsville comptroller community by
providing quality educational, training and professional
development programs. to provide our members opportunities to
network and interact with other members of the comptroller
community and to support our community through service and
outreach programs.
ASMC - REDSTONE/HUNTSVILLE
Membership Benefits
1. Gain insight to information on current trends and development in the financial management of the
Department of Defense and U.S. Coast Guard.
2. Receive a subscription to the Armed Forces Comptroller, the quarterly professional journal of the
ASMC, and the ASMC Connection, the monthly e-newsletter. These publications, as well as the ASMC
website, contain articles, organizational news and updates on current trends and developments
within the financial management community and the ASMC.
3. Join in one of the more than 140 chapters worldwide. Chapter benefits could include monthly
luncheons, local education activities, chapter publications, philanthropic endeavors and more.
4. Receive discounts on enrollment and renewal in the Certified Defense Financial Manager (CDFM)
Program, which is one of the key certifications identified by the DoD for financial managers.
5. Have the opportunity to participate in the National Awards Program. This program includes
achievement awards, an essay contest, corporate member award, members' continuing education
grants, high school scholarships and many chapter program awards.
6. Gain access to the CPE management tool, which allows members to manage, track and record their
continuing education experience.
7. Have an opportunity to demonstrate leadership as a chapter officer or committee member.
8. Network with military comptrollers/financial managers and other business organization.
Start End Time Item
7:30 AM 8:00 AM 0:30 Registration
8:00 AM 8:15 AM 0:15 Opening Remarks by President / Welcome / Pledge of Allegiance
8:15 AM 9:00 AM 0:45 Ms. Dwanna Green – AFAA Certified Personal & Group Fitness Trainer,
“The Importance of Physical Fitness in the Workplace"
9:00 AM 9:15 AM 0:15 Break - Door Prizes
9:15 AM 10:00 AM 0:45 Mr. Anthony Daniels, Jr.
Corporate and Foundations Relations Officer Alabama A&M University
“Communication and Situational Awareness: 5 Generations in the Workforce"
10:00 AM 10:15 AM 0:15 Break – Door Prizes
10:15 AM 11:00 AM 0:45 Mr. Stephen Williams- President, Life Course Capital
“Getting Fiscally Fit”
11:00 AM 12:30 PM 1:30 Lunch
Door Prizes(After Lunch)
12:30 PM 1:30 PM 1:00 Mr.Gary Fouts, Senior Partner, Retirement Systems Solutions Nashville
“Successful Retirement Planning for CSRS and FERS”
1:30 PM 1:45 PM 0:15 Break – Door Prizes
1:45 PM 2:30 PM 0:45
Mr. Joe Fitzgerald
Civilian Aide Secretary of the Army North Alabama
What Can We Learn From “The Greatest Generation” A Talk About Honor Flight
Tennessee Valley
2:45 PM 3:45 PM 1:00 MG Lynn A. Collyar
US Army Aviation and Missile Command
3:45 PM 4:00 PM 0:15 Grand Prize- Closing Remarks - Evaluation sheets- Wrap up
Schedule of Events
CLPs: 7
“The Importance of Physical Fitness in
the Workplace”
Ms. Dwanna Green
AFAA Certified Personal & Group
Fitness Trainer
Get Healthy.Get Fit.Get Strong
The Importance of Physical
Fitness in the Workplace Dwanna Green, AFAA Certified Personal & Group Fitness Trainer
Get Healthy.Get Fit.Get Strong
Defining Physical Fitness
• Your ability to perform daily tasks efficiently without feeling overly tired. A person who is fit should possess the minimal levels of strength, flexibility and endurance to carry out every day work, while also having enough energy remaining to participate in additional activities outside the home or work.
Get Healthy.Get Fit.Get Strong
The Importance of Physical Fitness in
the Workplace: 1. Healthcare Costs – Studies have shown that companies that provide
structured wellness programs and an onsite fitness center can encourage their employees to lead a healthier lifestyle which aids in lower healthcare costs.
2. Productivity – Employees that have the option of going to a fitness
center during the day helps to relieve stress. The employee will get revived and rejuvenated and come back to work with renewed focus and energy to handle major tasks.
3. Accountability – By providing structured wellness programs and
exercise activity on the worksite, employers can encourage employees to take responsibility for reaching and maintain their health and fitness goals.
4. Time Management – Having a fitness center on site helps an employee
to properly balance fitness goals and job duties during the workday.
Get Healthy.Get Fit.Get Strong
Five Important Numbers You Need to Know
1. BMI – Body Mass Index (measures height to weight) a. Women - 25 or more Overweight b. Men – 30 or more Overweight
2. Blood Pressure
a. Normal 120/80
3. Cholesterol
a. Less than 200
4. Waist Circumference
a. Women less than 35 b. Men less than 40
5. Target Heart Rate – is the key to an aerobic workout because the increase in heart
rate and respiration strengthens your heart and lungs. a. Maximum Heart Rate 220-Age = MHR b. MHR x .50 = Low end of THRR c. MHR x .85 = High end of THRR
Example: If you’re 50, your MHR is 170 (220-50) beats per minute. Your THRR would be between 85 (170 x .50) and 144 (170 x .85) beats per minute.
Get Healthy.Get Fit.Get Strong
Get Healthy.Get Fit.Get Strong
Contact Info
Dwanna Green
Certified AFAA Personal & Group Fitness Trainer
205.919.4884
Door Prizes/Break
INGENUITY, INC.
This Door Prize brought to you by:
Mr. Anthony Daniels Jr.
Mr. Leroy Daniels
“Communication and Situational Awareness: 5
Generations in the Workforce”
Anthony L. Daniels Jr., Corporate and Foundations Relations Officer for
Alabama A& M University, was born in Florida; he grew up in Midway, Alabama
and considers it home. As an elementary school teacher, he was and continues
to be an advocate for education. Anthony’s education background qualifies
him to be a supporter for academic excellence. He taught third grade at the
Academy of Science and Foreign Language, fourth grade at University Place
Elementary (a Title I school) and a fourth and fifth grade blended-class at
Cochiti Middle School on an Indian reservation. He received a Bachelor’s
degree in Elementary Education and Master’s degree in Special Education
from Alabama A&M University.
Beginning in 2006, Anthony was elected as Chairman of the National
Education Association Student Program, where he represented more than
62,000 college students on over 1,100 campuses nationwide. As a result of
Anthony’s leadership and collaboration with various organizations, the College Cost and Reduction Act of 2007 was
signed into law by Pres. George W. Bush.
Anthony has since been recognized as a leading voice on the issue of college access and affordability and has testified
before the U.S. Department of Education, spoken to live audiences, has been interviewed on nationally syndicated radio
programs, television broadcasts, and featured in various magazines on the topic.
In May 2009, he released his memoir, To Sweeten Alabama: A Story of a Young Man Defying the Odds.
Shortly after, Anthony was appointed to Mayor Tommy Battle’s Economic and Sustainability Council. He Co-founded
First-Book North Alabama, a non-profit organization that provides new books to disadvantaged children.
He recently returned to his alma mater as Corporate and Foundations Relations Officer and also acts as Chief
Operating Officer for Premiere Dental. Anthony is also currently involved in several community leadership organizations
such as Leadership Huntsville and the Committee of 100 Young Professionals.
LeRoy Daniels is a Human Resources Management consultant and an adjunct professor of
Human Resources Management at his alma mater, Alabama A&M University.
Daniels performed Project Management duties to facilitate achieving contractual objectives
involving highly complex governmental projects.
He performed Civilian Personnel Officer duties for the U.S. Army Aviation Center and
Fort Rucker from March 1980 to August 1984 and the Army Commands and Activities
at Redstone Arsenal from August 1984 to September 2001.
Noteworthy achievements:
• Planned and implemented the Research and Development Laboratory Demonstration
Project for the Army Missile Command and the Army Aviation and Missile Command as an
alternative civilian personnel management system.
• Co-chaired the planning and establishment of the South Central Civilian Personnel Operation
Center and the Civilian Personnel Advisory Center
• Planned and implemented actions associated with Base Realignment and Closure (BRAC) decisions
Education
• B.S. degree in History and Government from Alabama A&M University
• Master of Business Administration (MBA) from Alabama A&M University
• Numerous Executive Development and Training Programs Certifications
• Graduate of Leadership Huntsville/Madison County Alabama
• Graduate of Counselor Advisory University Summer Education - Tuskegee University
Daniels’ family includes wife, Sandra, two sons, one daughter-in-law and three grandchildren.
LeRoy Daniels, President
Options and Solutions, LLC
16
The exchange of thoughts, messages, or the like, as by speech, signals or writing.
To express oneself in such a way that one is readily and clearly understood.
The ability to communicate effectively with others is one of the most powerful tools for personal and or professional success.
Most people are challenged by the many day-to-day interactions with co-workers, family and friends.
Emotion, communication and conflict are present in all human interactions and affect us in different ways.
Everyone manages emotion, communication and conflict from habit patterns and styles developed early in life and over time.
80% of problems in the workplace are communication related.
One of the fastest ways to alienate yourself from other people is to communicate unsuccessfully
Effective communication empowers you to influence others.
Your capacity to communicate is often seen as a indicator of your ability and intelligence
Increased productivity
Reduced stress
Better understanding what others are saying
Better understand how to get your message across
Enhance relationships
Save time and money
Past Experiences Shape Communication Style
Communication doesn’t just happen; your style is based on your experiences that over time have developed into a pattern of attitudes and actions.
It is continuous cycle. Your experience influence your thoughts. Your thoughts ,over time, become your attitudes. These attitudes become the blueprint for new experiences, which develop into patterns of behavior.
An awareness of your personal style is critical to begin to transform negative attitudes and behaviors into positive ones.
It is key to empowering you to establish personal responsibility and accountability in the midst of changing your behavior. Remember, the only person you can every really control or change is yourself.
1. Face the speaker and maintain eye contact.
2. Be attentive, yet relaxed.
3. Keep an open mind to the speaker’s message – try to feel what the speaker is feeling.
4. Listen to the words and try to picture what the speaker is saying.
5. Do not interrupt and do not impose your “solutions.”
6. Wait for the speaker to pause to ask clarifying questions- ask
questions only to ensure understanding of something that
has been said (avoiding questions that disrupt the speaker’s
train of thought).
7. Give the speaker regular feedback, e.g., summarize, reflect
feelings, or simply say “uh huh.”
8. Pay attention to nonverbal cues – to feelings, tone of voice,
inflection, facial expressions, gestures, posture.
9. Be aware of potential barriers that impact your ability to
listen effectively.
Past experience that influence our reaction to the speaker.
Worry, fear, anger, grief and depression
Individual bias and prejudice
Semantics and language differences
Noise and verbal “clutter”
Preoccupation, boredom and shrinking attention spans.
1. What key points is the speaker making?
2. How does this fit within what I
know from experience? 3. How can this information benefit
me?
Turn your body and tilt your face toward the speaker
Use other parts of your body besides your ears to receive the message:
1. Look at the speaker to pick up non-verbal signals or cues
2. Your eyes will also send signals to the speaker
3. When the speaker sees a receptive audience they are motivated to work harder to communicate their message
React to the speaker by nodding your head.
Listen and acknowledge what you hear the speaker saying, even if you don’t agree with it. At this point do not express your point of view.
Acknowledging the speakers thoughts and feelings does not mean that you approve of or agree with the speaker’s opinions or actions
Your ability to listen and then acknowledge what the speaker said allows the speaker to feel a sense of satisfaction of being understood
Reflecting back
Reflecting is affirming to the speaker and encourages the speaker to elaborate further or delve more deeply into the topic.
Meaningful exchanges between you and the speaker are built on feedback.
In order to accurately feedback a person’s thoughts and feelings, you have to be consciously, actively engaged in the process of listening.
Try to experience what the speaker is describing, feeling the speaker’s feelings through the lens of our own experience.
Briefly explain the intention of your conversation.
The other person (s) will attend better if they have a basic understanding of the time and effort you will be bringing to the conversation.
Use “I” statements to communicate your feelings, and what you have personally seen, heard, need or expect.
Do not engage in verbal attacks on the other person, if you need to criticize the behavior or actions of the other person that bother you.
Stat what you need or expect in positive terms.
Briefly explain the intention of your conversation.
The other person (s) will attend better if they have a basic understanding of the time and effort they will be bringing to the conversation.
Use “I” statements to communicate your feelings, and what you have personally seen, heard, need or expect.
Do not engage in verbal attacks on the other person, if you need to criticize the behavior or actions of the other person that bother you.
State what you need or expect in positive terms.
Accept responsibility for your emotions
Use “I” statements. Say “I feel angry when…” rather than “You make me mad…”
Activity:
Consider the following statements you might make. How would you change them into “I” statements? 1. You make me so mad when you don’t complete your work
on time. 2. My supervisor frustrates me when she doesn’t communicate
her expectations. 3. My employee aggravates me when she comes in late. 4. My boss made me happy when he complimented my
financial report.
Your communication should include these five important components:
1. What you are seeing – have seen?
2. What you are hearing – have heard?
3. What you are feeling – have felt about the issue?
4. What you need or want?
5. What will be the positive results from receiving/acting on your request?
Five Components of Your Message
1. Your boss marked you low on your performance review. This was the first indication you had of how you were performing in your job.
2. An employee you supervise has been frequently absent causing lost production and a hardship for the rest of the employees in your unit.
3. Your co-worker has been opening your mail and going through your desk drawers, as well as saying negative things to others behind your back.
Emotional obstacles of effective communication include:
Vulnerability – people may not express their true feelings because they do not want to expose themselves to others
Protecting – people may not want to express their true thoughts because they don’t want to hurt or upset the other person
Expectations – social, professional, or cultural “rules” may inhibit expression of some feelings
Fear – people see approval and acceptance so they are often reluctant to say what they really mean for fear of rejection.
Recognize what you are feeling. Are you angry, embarrassed, or hurt?
Simplify your feelings. Select one or two words to describe how you feel. Be specific.
Do not act on your feelings right away. Don’t make a decision, enter into a discussion, or send an email in anger or frustration.
Choose appropriate time and place to communicate.
Accept that you are responsible for your emotions; Use “I” states. Say “I feel angry when..” rather than “You make me mad…”
FIVE GENERATIONS AT WORK
U.S. Birthrate Chart
Source: Generations, Inc. by Megan Johnson and Larry Johnson
Information developed from U.S. Census 40
The Traditionals (veterans) ARE THOSE BORN BETWEEN 1920’S AND 1945.
These are pre-boomers, 65 or older, who are staying in the workforce for various
reasons, such as
• Health care
• Financial – “can’t afford to retire”
• Empty nest is no longer empty
• Love the job and its responsibilities
• Personal fulfillment – no outside fulfillment
• Lonely
• Workaholic
THE TRADITIONALS OR VETERANS
41
The challenges for the Traditional workforce include:
• Sometimes viewed, comparatively, as unproductive, obsolete, and undesired.
• Rapidly changing technologies
• Continuous educational and professional development
• Performance requirements are changing e.g. multi-skilled specialist
• Health Issues
• Maintaining productivity
• Cultural attitudes about other generations, changing demographics, education,
careers, and life-long learning.
THE TRADITIONALS OR VETERANS (continued)
42
“
Baby Boomers” defined – those born during post World War II
(1946-1964) demographic boom in birth – nearly one third of all Americans
The boomer workforce characteristics and challenges include:
• Appreciate personal communication and the telephone
• Service oriented
• Appreciate team perspective
• Motivated workers – want challenging work environment
• Uncomfortable with conflict
• Some may put “success ahead of result”
• Want to work flexible hours to enjoy fruits of their labor
THE BABY BOOMERS
43
Intergenerational Workforce Challenges
• Want phased retirement and wellness programs to foster a healthy life style
• Most Boomers fifty-five and over want to continue working past retirement age
• Some boomers are viewed as working long past retirement eligibility and
therefore blocking upward mobility for younger workers.
• Many are retiring at an accelerating rate, leaving a gaping hole in
management and employment ranks.
GENERATION “X”
“Generation X” explained
These workers from this generation, born between 1965 and 1980, have the following
characteristics:
• Independent and creative as well as adaptable
• Technology-literate
• Like to buck the system
• Like independent work (no boss looking over their shoulders)
45
• Skeptical and distrustful of authority
• Don’t like micromanagers and flashy bureaucrats
• Like communicating by email and voicemail
• Looking for development opportunities and upward mobility
• No automatic loyalty
Those persons born between 1981 and 1995 are generally considered
Generation Y.
This generation has many names:
• The Mellennials
• The Tech/Net/Digital Generation
• Boomlets
• Echo Boomers
• The Entitled
• The Spoiled
GENERATION “Y”
47
These workers from this generation usually have the following characteristics:
• Excellent communications and diversity skills
• “More to life than work”
• Anxious to rise quickly to the top
• Want to chose their own work site (non-cubicle)
• Very mobile – willing to move for upward progression
• Optimistic – can-do spirit
GENERATION “Y” (continued)
48
• Ability to multi-task
• Inexperienced and require supervision and structure
• Prefers instant messaging, blogs, text messages and email
• Has difficulty communicating in the workplace
• Likes to be spoken with one-on-one
• Often paired with older mentor for workplace support
THE LINKSTERS
“Linksters,” also known as the Facebook Generation, are members of the population
who were born after 1995, according to Larry and Megan
Johnson, authors of Generations, Inc. This generation, like no other, is
linked to each other and the world through technology. They are currently
in their teens and are entering the workforce as part-time employees,
working after school and during the summers.
This generation has the following characteristics:
• Digital natives – born into technology as part of everyday life
• Love texting as communication method, thereby limiting personal
interaction and face-to-face communication
50
• Primarily work part-time while attending school
• Loves flexible schedules
• Stays connected through technology, especially the cell phone
• Many have “cell phone addiction”
• Environmentally aware – “Teens going green”
Anthony L. Daniels Jr LeRoy Daniels Corporate and Foundations Relations Officer President,
Alabama A& M University Options and Solutions, LLC
Thank You
Break / Door Prizes
This Door Prize brought to you by:
Budget Cut Fun:
Mr. Stephen Williams
President, LifeCourse Capital
“Getting Fiscally Fit”
©Society For Financial Awareness 1993-2014 “Confidential & Proprietary Information”
Securities offered through NEXT Financial Group, Inc. member FINRA/SIPC
LifeCourse Capital, Inc. and SOFA are not affiliates of NEXT Financial Group, Inc.
8331 Madison Blvd Suite 100
Madison AL 35758
256/489.4400
Fax 256/489.4403
www.LCCapital.net
Six Simple Steps to Fiscal Fitness
GIVE YOURSELF A RAISE
BUDGETING SAVES 20% of your income
HOW TO KEEP A BUDGET
GOAL of BUDGETING
Step 1: List your fixed monthly expenses and estimate variable
expenses over 3 months.
Step 2: Write down EVERYTHING you spend.
Step 3: Evaluate where you overspend and rectify it.
Build a cash reserve of 3-6 months of expenses in a liquid savings
account.
Reduce DEBT by building reserve to $1000 increments, applying it to
the debt accordingly.
GIVE YOURSELF A RAISE
BUDGETING TOOLS
FOR MOBILE DEVICES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$FREE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1.99
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$2.99
(includes web portal)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$FREE
YOUR CAR YOUR $
Choose your vehicle carefully
Saving Behind the wheel
Average costs per mile
DEPRECIATION will cost you 20% when your drive your new car
home.
• A new $35,000 car will be worth on average a year later
$8,050 less.
• A new $15,000 car will be worth $3,450 less a year later.
YOUR CAR YOUR $
Choose your vehicle carefully
Determine your driving costs:
Buy a used vehicle that is
one to two years old and well
maintained. Take care of it,
and keep it for a LONG time.
The mentality that believes
“You are what you drive” is
overrated and overpriced.
You want the bumper sticker
that says: “It’s paid for.”
FIND ME THE $
Simple ways to save money
Auto & home insurance
• Go on-line and shop every few years
Utility bills
• Insulate, adjust the thermostat, and turn off appliances.
Groceries • Weekly sales and coupons can save you 40%.
General items
• Buy used or refurbished.
Downsize • Sell unwanted items on Craigslist and Ebay.
Vacations
• Plan carefully. Shop for deals on-line.
FIND ME THE $
Simple ways to save money
SPEND LESS
• EAT OUT LESS: limit how often you visit restaurants.
• Reduce memberships. Downgrade gym, club, cable, cell phone, &
internet plans.
• Trim transportation costs. Start a carpool routine with neighbors or
co-workers.
• Save on health care. Use generic medications and mail-order
pharmacy.
• Boost your income. Get a second, part-time job, baby-sit or sell items
on-line.
• Lower your living costs. Ditch the second car or rent out a room.
REDUCE DEBT
IMMEDIATELY
GET OUT!
A borrower is a slave to the lender.
Example: The $160,000 credit card.
Credit card debt of $30,000 at 18%
paying it off over 10 years at $541 per
month
versus
SAVING the $541 per month into an
investment earning 8% per year.
You will have paid a total of $64,857 in
paying off the credit card. The investment
will have grown to $99,634.
That is a difference of $164,501.
Debt Name Total
Balance
Monthly
Payment
Division
Answer
Payoff
Priority
Accelerated
Monthly
Payment
Months to
Pay Off
1 2 3 4 5 6 7
CountryWide
Mortgage $100,000.00 $733.26 136 9 $ 2,794.73 36
Discover $1,700.00 $34.00 50 6 $ 1,678.54 2
Capital One $3,287.00 $65.74 50 7 $ 1,744.28 2
Visa Platinum $1,550.00 $31.00 50 5 $ 1,644.54 1
Mastercard $850.00 $17.00 50 4 $ 1,613.54 1
Dillards $1,122.00 $33.66 33 3 $ 1,596.64 1
Ford Credit
(SUV) $12,350.00 $671.90 18 2 $ 1,562.98 8
GMC Finance
(truck) $7,250.00 $491.08 15 1 $ 891.08 9
RFCU (Home
Equity Loan) $23,530.00 $316.69 84 8 $ 2,030.97 12
TOTALS $151,639.00 $2,394.83 72
Total Debt (total column 2)
$151,693.0
0
Total Monthly Payments (total column 3) $2,394.83
Total Accelerated Payments (A + I)
(400+2,394.83)
= $2,794.83
Years to Debt Freedom (total column 7 ÷ 12) (72 ÷ 12) = 6 years
PAY ATTENTION
to what happens to your money
Diversify Investments
• Never put more than 10 % of your assets into an
investment.
• Buy multiple investments that behave differently from
one another.
Assess Risk
• Diversified global bonds are proving to be even more
important as an asset class at all ages in a portfolio
based on market performance.
Manage the portfolio
• Assess the funds and percentages you have once a
year.
• Do not make rash moves based on fear/headlines.
PAY ATTENTION
to what happens to your money
S&P 500 Index
PAY ATTENTION
to what happens to your money
S&P 500 Index
Intermediate Bond
Index
THE BENEFITS
of MUTUAL FUNDS
Convenience
• Allow investor to systematically invest with small dollar amounts
on regular basis. Professional Management
• Portfolio managers supply expertise for buying, monitoring, &
selling . Flexibility
• Customization of your investment portfolio.
• Wide variety of investment styles and objectives to suit your
investing profile.
• Adjust quickly to changes in your lifestyle or your market outlook. Diversification
• Invest across a wide range of securities, industries, or asset
classes.
• May help reduce investment risk and enhance long-term return
potential.
Saving Strategy
10% may not be enough
EXAMPLE: Mr. and Mrs. Gottaquit are 63 and want to
retire at 65.
• Currently living on $12,000 per month.
• Estimate $9000 per month in retirement.
• Assets to generate income are social security, 401k savings &
personal investments.
Social Security $2250
401k plan +$2000
Investments +$1800
Total =$6050 which is
$2950 short!
Factors to consider:
• Retirement age, lifestyle, length of retirement, & income sources
I’d love to speak with you if you have
questions about your plan or about specific
financial products. Call our office or send me
an email and we will set up a time to meet
to review your needs and address any
concerns you may have.
CONTACT ME TODAY 256/489.4400
8331 Madison Blvd.
Suite 100
Madison AL 35758
256/489.4400
Fax 256/489.4403
www.LCCapital.net
Securities offered through NEXT Financial Group, Inc. member
FINRA/SIPC
LifeCourse Capital, Inc. and SOFA are not affiliates of NEXT Financial
Group, Inc.
“ ”
Lunch Break
1100 to 1230 1.5 Hours
Break / Door Prizes
This Door Prize brought to you by:
INGENUITY, INC.
I am doing it right?
Mr. Gary Fouts
Senior Partner, Retirement System
Solutions Nashville, TN “Successful Retirement Planning for CSRS and
FERS”
© 2013 Retirement Systems Solutions, Inc. 80
WELCOMES…
Federal Employees
of the Greater Huntsville Alabama Area
“Keeping You in Tune with
Your Federal Employee Benefits in the New Environment”
March, 2014
Retirement Systems Solutions, Inc.
www.rssbenefits.com
© 2013 Retirement Systems Solutions, Inc. 81
“Our Goal is quite simple….deliver the most
accurate, up-to-date benefits information and
federal retirement benefits advice available to
ALL the various groups of federal employees.”
Gary Fouts National Director, Nashville TN
~ ~ ~ ~ ~ ~ ~
© 2013 Retirement Systems Solutions, Inc. 82
Initial Thoughts….
What if…
what you thought you knew… turned out not to be true… when would you want to know?
© 2012 Retirement Systems Solutions, Inc.
THEN:
Having a “Real”
Retirement Plan
Relax & Enjoy!!!
Helping You Build a Bridge to
Your Retirement…
NOW:
Assets
Lo
ng
Term
Care
Taxes
© 2012 Retirement Systems Solutions, Inc.
HOLD ON….Some former students!
© 2013 Retirement Systems Solutions, Inc. 85
Today’s Topics…..
Retirement Annuity Systems (CSRS & FERS)
Basic Qualifications
Should I purchase my military time?
As a CSRS should I contribute to the VC program?
Survivor Benefit Planning
Basic Understanding
Possible Pitfalls
FEGLI & FEHB?
Which options are best for me?
Thrift Savings Plan Overview
Basic Program Overview
What is the impact of my TSP decisions?
ROTH Options
© 2013 Retirement Systems Solutions, Inc. 86
FEDERAL
RETIREMENT
SYSTEMS
Civil Service Retirement System (CSRS)
&
Federal Employee Retirement System (FERS)
© 2013 Retirement Systems Solutions, Inc. 87
Federal Retirement Systems
CSRS – Hired before December 31,
1983
Two Components of retirement pay:
1. CSRS Annuity (pension)
2. Thrift Savings Plan (TSP) – 401(k)
Spouse Survivor Benefit - 55% max
© 2013 Retirement Systems Solutions, Inc. 88
Federal Retirement Systems
FERS – Hired after December 31, 1983
or Transferred from CSRS (‘87 or ‘98)
Three Components
1. FERS Annuity (pension)
2. Thrift Savings Plan (TSP) – 401(k)
3. Social Security Income
Spouse Survivor Benefit - 50% max
© 2013 Retirement Systems Solutions, Inc. 89
Retirement Eligibility - CSRS
Category Age/Service Special Requirements
Optional – No age
Reduction
62 – 05
60 – 20
55 – 30
None
None
None
**Optional – With Age
Reduction
Any Age – 25
50 – 20
Early Out
Transfer of Function
Major Re-organization
R.I.F.
Deferred
Any Age – 05
Annuity @ Age 62
Not eligible for health, life
** Annuity reduced under age 55. 1/6 of 1% per month or 2% per year
© 2013 Retirement Systems Solutions, Inc. 90
Retirement Eligibility - FERS
Category Age/Service Special Requirements
Optional – No age
Reduction
62 – 05
60 – 20
MRA – 30
None
None
None
**Optional with
Reduction MRA – 10 Voluntary Separation
Optional – No Age
Reduction
Any Age – 25
50 – 20
Early Out
Transfer of Function
Major Re-organization
R.I.F.
Deferred
Any Age – 05
Annuity @ Age 62
Not eligible for health, life
** Annuity reduced under 62. 5/12 of 1% per month or 5% per year
© 2013 Retirement Systems Solutions, Inc. 91
Retirement Supplement - FERS
Retirement Supplement is paid until age 62… 1. Imitates Social Security benefit payable at 62
2. Number of Years Served in SS system Divided by 40 (example: 30/40 = 75% of age 62 SSA)
3. Only FERS employees entitled to this supplement
4. Wage Earnings Tested*
MRA with 30 years of service
Age 60 with 20 years of service
MRA under discontinued service (involuntary) and early retirement
provisions (RIF, Re-org, etc)
Excludes the MRA+10 and deferred annuity retirees
Special Category Nuances (pre-MRA & Wage Restriction)
*Subject to same Wage Earnings test as age 62 Social Security
© 2013 Retirement Systems Solutions, Inc. 92
RETIREMENT SPECIAL CATEGORY PAY
1. Law enforcement
2. Fire Fighter
3. Air Traffic Controller
© 2013 Retirement Systems Solutions, Inc. 93
Retirement Eligibility-Special Pay
RETIREMENT
CATEGORY
CSRS & FERS
AGE /SERVICE
SPECIAL
REQUIREMENTS
MANDATORY
56 / 20*
57 / 20*
57 / 20*
Air Traffic Controller
Firefighter
Law Enforcement
OPTIONAL
50 / 20* (CSRS & FERS)
Any Age / 25* (CSRS ATC only & FERS all three)
Air Traffic Controller
Firefighter
Law Enforcement
* 20 “good years”
© 2013 Retirement Systems Solutions, Inc. 94
What About My…
MILITARY
TIME?
© 2013 Retirement Systems Solutions, Inc. 95
Military Time & Federal Service
CONDITIONS: Honorable Discharge
Automatic, if military before 1/1/57
Not automatic, if after 1/1/57
- Special Conditions for Crediting
Retired Military - option to combine with Federal retirement ?
© 2013 Retirement Systems Solutions, Inc. 96
Military Buyback:
SAMPLE CSRS
CSRS 7% + Interest
Interest began 10/1/1986 OR
3 years after CSRS hire date,
whichever is later
Military Earnings
$48,000 x 7% = $ 3,360
Interest Due = $ 10,219
Total Deposit $13,579
Interest began 1/1/1989 OR
3 years after FERS hire date,
whichever is later
Military Earnings $132,000 x 3% = $3,960
Interest Due = $ 6,721
Total Deposit $10,681
FERS 3% + Interest
© 2013 Retirement Systems Solutions, Inc. 97
SAMPLE:
CSRS Annuity & Military Time
Adding 10 Years of military service:
With military time (30 yrs) $65,000 X 5 yrs @ 1.5% = $4,875
$65,000 X 5 yrs @ 1.75% = $5,687.50
$65,000 X 20 yrs @ 2.0% = $26,000
$36,562 / 12 = $3,046.87 / month
Without military time (20 yrs) $65,000 X 5 yrs @ 1.5% = $4,875
$65,000 X 5 yrs @ 1.75% = $5,687.50
$65,000 X 10 yrs @ 2.0% = $13,000
$23,562 / 12 = $1,963.54 / month
$3,046.87- $1,963.54 = $1,083.33 monthly deduction if military time is not bought back
$13,579 (previous slide) ÷ $1,083.33 = 12.54 months
© 2013 Retirement Systems Solutions, Inc. 98
Retired Military
If you are a retired military, you MAY combine your active duty military service and civilian service for one annuity
Requires a deposit into the civilian retirement system for the active military service plus interest
Must waive your military retired pay at the point of receiving the combined annuity
You do not have to waive your military retired pay if it was awarded for a combat disability
© 2013 Retirement Systems Solutions, Inc. 99
Retired Military & the Math…
NECESSARY BACKGROUND:
• Now a CSRS Employee (22 years)
• Retired Military (20 Years) drawing pension
• Age 65 with a $100,000 current High-3
• Buyback Cost @ $15,000 deposit and $35,000 interest = $50,000
Normal CSRS and Military Calculations:
• Annuity rate if retiring at 22 years CSRS = 40.25%
• CSRS Annuity value = $40,250/yr
• Stand Alone Military Retirement Annuity = $28,750/yr
• Total Value = $69,000 / yr
Add 20 years of Military Service to CSRS annuity at retirement
• CSRS Annuity rate as 42 years = 80%
• Annuity value = $80,000 / yr
• No Military Pension at this time
© 2013 Retirement Systems Solutions, Inc. 100
Military Time & Federal Service
SUMMARY
Know how the rules affect you, NOT
your fellow employees!
Find out how much you owe
Stop interest – pay as soon as you can
© 2013 Retirement Systems Solutions, Inc. 101
CSRS - Voluntary Contributions
Voluntary Contributions are optional
payments that only qualified CSRS
and CSRS Offset employees may
make to the Civil Service Retirement
and Disability Fund, in addition to the
regular retirement deductions taken
from their salary.
© 2013 Retirement Systems Solutions, Inc. 102
Voluntary Contributions - CSRS
PROCESS –
Qualify for Voluntary Contributions
1. CSRS or CSRS Offset only
2. All service time is paid-up
3. Obtain OPM approval
4. Obtain 10% earnings estimate (HR, SSA, etc…)
Place after-tax funds into VC via SF-2804
Rollover/Transfer VC into Roth IRA
© 2013 Retirement Systems Solutions, Inc. 103
Voluntary Contributions - CSRS
NON-QUALIFIED FUNDS
(non tax deferred)
CSRS & CSRS OFFSET
MAX Contribution - 10% of Lifetime Earnings
Voluntary Contribution Program
Rolled Over to a ROTH
IRA… WOW!!!
© 2013 Retirement Systems Solutions, Inc. 104
Retirement Annuity Summary
1. Do you know if you qualify?
2. Should you buy back your military time?
3. CSRS/Offset – Should you place $$ in the VC?
© 2013 Retirement Systems Solutions, Inc. 105
SURVIVOR
BENEFIT
PENSION
© 2013 Retirement Systems Solutions, Inc. 106
Survivor Benefit Pension
CSRS & FERS ANNUITY
IF DEATH OCCURS WHILE EMPLOYED
IF DEATH OCCURS IN RETIREMENT
SURVIVORS?
1. SURVIVING SPOUSE
2. SURVIVING EX-SPOUSE
3. INSURABLE INTEREST
4. SURVIVING QUALIFIED CHILDREN
Under 18
22, if full-time student
Disabled
© 2013 Retirement Systems Solutions, Inc. 107
Survivor Benefit Pension In Retirement
CSRS – Survivor Annuity Options
0% up to a maximum of 55%
of any whole dollar amount
FERS – Survivor Annuity Options
0%, 25%, maximum of 50% (only options!)
Any amount less than the maximum annuity requires notarized spousal consent!!
© 2013 Retirement Systems Solutions, Inc. 108
Survivor Benefit Pension Cost - CSRS
CSRS employees pay 2½% of the first
$3,600, and 10% of their earned annual
Retirement Annuity in excess of $3,600 to
provide a full 55% Survivor Annuity to their
spouse
About 9.5% on average!
Use ~ 10% for “off the cuff” calculations
© 2013 Retirement Systems Solutions, Inc. 109
Survivor Benefits – CSRS In Retirement
EX: ~$96,000 – “High 3” with 35 Years Service
Age Annuity +
2.5% COLA
SBP
Cost
Net
Annuity
Spouse
Benefit
Cumulative
SBP Cost
55 $5,700 $545 $5,155 $3,135 $6,540
60 $6,450 $617 $5,833 $3,547 $34,860
70 $8,250 $789 $7,461 $4,537 $77,040
75 $9,340 $893 $8,447 $5,137 $127,500
80 $10,570 $1,010 $9,560 $5,813 $184,590
85 $11,995 $1,143 $10,852 $6,597 $249,180
If spouse pre-deceases the retiree…
ALL accumulated cost is FORFEITED!!
© 2013 Retirement Systems Solutions, Inc. 110
Survivor Benefit Pension Cost - FERS
FERS employees pay 10% of their earned
annual Retirement Annuity to provide a
full Survivor Annuity (50%) to their spouse
FERS employees pay 5% of their earned
annual Retirement Annuity to provide a
half Survivor Annuity (25%) to their
spouse
© 2013 Retirement Systems Solutions, Inc. 111
EX: ~$85,000 – “High 3” with 35 Years Service
Age Annuity +
2.5% COL
SBP
Cost
Net
Annuity
Spouse
Benefit
Cumulative
SBP Cost
60 $2,422 $242 $2,180 $1,211 $2,904
65 $2,673 $267 $2,406 $1,337 $18,168
70 $3,025 $302 $2,723 $1,512 $35,439
75 $3,422 $342 $3,080 $1,711 $59,184
80 $3,872 $387 $3,485 $1,936 $77,086
85 $4,381 $438 $3,943 $2,190 $102,198
Survivor Benefits – FERS In Retirement
If spouse pre-deceases the retiree…
ALL accumulated cost is FORFEITED!!
© 2013 Retirement Systems Solutions, Inc. 112
Survivor Benefit Plan & FEHB
THIS IS A BIG DEAL …!
Federal retiree families MUST
participate in SBP at least at a
minimum level in order for the
surviving spouse to maintain a
lifetime of …
Health Benefits (FEHB)
© 2013 Retirement Systems Solutions, Inc. 113
Survivor Benefit Pension - Summary
1. How do I make sure my family has a lifetime
of health care (FEHB)? (Hint- SBP)
2. Can I stop SBP at any time?
3. Do the cost of these benefits increase over
time?
4. What happens to the money spent on this
benefits if my spouse pre-deceases me?
© 2013 Retirement Systems Solutions, Inc. 114
FEGLI
&
FEHB
© 2013 Retirement Systems Solutions, Inc. 115
Federal Employees’ Group Life
Insurance Program (FEGLI) Participation is optional
>96% of all federal employees participate during
their careers
NOTE: Postal employees Basic is paid until retirement (or age 65)
Five Categories
1. Basic
2. Extra Benefit (< 45 years old)
3. Option “A” Standard
4. Option “B” Additional
5. Option “C” Family
MUST have for 5 years immediately prior to retirement in
order to carry over retirement threshold!
© 2013 Retirement Systems Solutions, Inc. 116
FEGLI
FEGLI is Group Term Cost increases each five (5) years
Builds NO cash value
NO loans
Types of Insurance Term – Increments from 5 years to 30 years
Cost is very low at younger ages
Permanent – can build cash values, level premium
Whole Life
Universal Life
Many Product Variations
© 2013 Retirement Systems Solutions, Inc. 117
FEGLI
BASIC INSURANCE Annual salary rounded to next $1,000 + $2,000
Accidental Death (2x)
EXTRA Benefit Amount - Double Value Life Coverage at younger ages (age 45 Double stops)
OPTIONAL INSURANCE
A – Standard - $10,000 Accidental Death (2x)
B – Additional - up to 5 times Annual Pay
C – Family - up to 5 units 1 unit = $5,000 spouse, $2,500 each child to 26
© 2013 Retirement Systems Solutions, Inc. 118
FEGLI
Important Points
Changes to coverage of FEGLI
Reduce at any time… KEY!
Increase coverage
Open Season…?
Qualifying Life Events (marriage, divorce,
adoption, death of spouse)
Physical – pass a medical exam
© 2013 Retirement Systems Solutions, Inc. 119
FEGLI – Cost Summary
No Reduction In Retirement
AGE SALARY BASIC OPT A OPT B TOTAL MONTHLY ANNUAL CUMULATIVE
53 $65,000
$67,000
$10,000
$325,000
$402,000
$123.39
$1,481
$1,481
54 $66,950 $69,000 $10,000 $335,000 $414,000 $127.08 $1,525 $3,006
55 $68,959 $71,000 $10,000 $345,000 $426,000 $238.23 $2,859 $5,864
60 $79,942 $82,000 $10,000 $400,000 $492,000 $559.65 $6,716 $24,982
65 0 $82,000 $10,000 $400,000 $492,000 $774.06 $9,289 $68,337
70 0 $82,000 $2,500 $400,000 $484,500 $1,190.06 $14,281 $119,773
75 0 $82,000 $2,500 $400,000 $484,500 $1,710.06 $20,521 $197,417
80 0 $82,000 $2,500 $400,000 $484,500 $2,230.06 $26,761 $306,261
© 2013 Retirement Systems Solutions, Inc. 120
FEGLI – Cost Summary
75% Reduction – Basic & Option A
AGE SALARY BASIC OPT A OPT B TOTAL MONTHLY ANNUAL CUMULATIVE
60 $79,942
$82,000
$10,000
0
0
$92,000
$39.65
$476
$476
65 0 $82,000 $10,000 0 $92,000 $39.65 $476 $2,380
66 0 $62,320 $7,600 0 $69,920 0 0 $2,380
67 0 $42,640 $5,200 0 $47,840 0 0 $2,380
68 0 $22,960 $2,800 0 $25,760 0 0 $2,380
69 0 $21,750 $2,500 0 $24,250 0 0 $2,380
70 0 $21,750 $2,500 0 $24,250 0 0 $2,380
80 0 $21,750 $2,500 0 $24,250 0 0 $2,380
© 2012 Retirement Systems Solutions, Inc. 121
FEGLI Summary
1. Never Throw away FEGLI before you have an
understanding of what it takes to replace it. You
could be throwing away Hundreds of Thousands
of dollars!
2. What insurance should I have now?
3. What insurance should I take into retirement and
how do I make sure that I can do that?
4. Are there any options that are FREE in
retirement for me?
© 2012 Retirement Systems Solutions, Inc. 122
FEDERAL
EMPLOYEES
HEALTH
BENEFITS
© 2012 Retirement Systems Solutions, Inc. 123
Federal Employees Health Benefits
FEHB
Continuation of Coverage into Retirement…
Employees are permitted to carry their health
benefits into retirement under certain conditions
You must have been continuously covered for
5 years immediately preceding your retirement
Retire on an immediate annuity
Must have SBP for spouse to continue FEHB
Continuation Under Other Forms of Annuity
Employees who separate and are eligible for a
deferred annuity cannot reinstate their health
insurance coverage
© 2012 Retirement Systems Solutions, Inc. 124
Temporary Continuation of Coverage
Allows personnel to temporarily continue their coverage after separation*
Enrollees must pay full premium
Dependent Children are eligible for TCC until:
Marriage (now there are exceptions)
Reach age 26
Loss of status as stepchild, foster child or recognized natural child
*Employees 18 months and dependents 36 months
© 2012 Retirement Systems Solutions, Inc. 125
Retirement use of FEHB
At age 65 if actively employed FEHB is the primary insurance.
At age 65 if retired Medicare becomes the primary insurance and the FEHB and Tricare are the supplemental policies.
After age 65, retirees who are Medicare eligible may suspend their health insurance in order to enroll in a Medicare approved HMO. If at a later time you should decide to leave the HMO, you may re-enroll in FEHB
Premiums will be deducted from your monthly annuity payments; if the annuity is insufficient to cover the cost, payment is made directly to OPM
Also applies to Military retirees and Tri-Care for Coordination of Benefits
© 2012 Retirement Systems Solutions, Inc. 126
THRIFT
SAVINGS
PLAN
www.tsp.gov
© 2012 Retirement Systems Solutions, Inc. 127
Thrift Savings Plan (TSP)
Thrift Savings Plan (TSP)
Pre-Tax or Post-Tax contribution of
base salary & locality pay up to a
maximum dollar amount
After-tax (ROTH) deferral options now
available
Who Can Participate?
All employees can contribute (CSRS employees do NOT receive matching funds)
© 2012 Retirement Systems Solutions, Inc. 128
TSP Contribution Chart - FERS
Employee
Contribution
Automatic
Contribution
Matching
Contribution
Total
Contribution
0.0% 1.0% 0.0% 1.0%
1.0% 1.0% 1.0% 3.0%
2.0% 1.0% 2.0% 5.0%
3.0% 1.0% 3.0% 7.0%
4.0% 1.0% 3.5% 8.5%
5.0% 1.0% 4.0% 10.0%
© 2012 Retirement Systems Solutions, Inc. 129
Thrift Savings Plan (TSP)
Contributions Eligibility
$17,500 Contributions Limit for 2014
Age 50, or 50 during the calendar year
2014 “Catch-up*” Contribution – $5,500
(Payroll deduction ONLY)
*In Addition to IRS Maximum Contributions
© 2012 Retirement Systems Solutions, Inc. 130
TSP Investment Funds
G Fund – Historically Least Volatile
Government Securities investment
Invested in short-term, non-marketable U.S. Treasury Securities
Managed by Thrift Investment Board
F Fund – 2nd Least Volatile
Bond Fixed Income Index investment
Barclays Capital U.S. Aggregate Index tracks U.S. bond market
Managed by BlackRock Institutional Trust and under control of
TSP Investment Board
© 2012 Retirement Systems Solutions, Inc. 131
TSP Investment Funds
C Fund – Moderate Volatility
Common Stock Index investment
BlackRock Equity Index Fund tracks S&P 500 Stock Index invested in large-cap U.S. stocks
Managed by BlackRock Institutional Trust and under control of TSP Investment Board
S Fund – 2nd Most Volatile
Common Stock Index investment
BlackRock Extended Market Index Fund tracks Dow Jones U.S. Completion TSM Index invested in small & mid-cap U.S. stocks
Managed by BlackRock Institutional Trust and under control of TSP Investment Board
I Fund – MOST Volatile
Common Stock Index investment
BlackRock EAFE Index Fund tracks Morgan Stanley Capital International EAFE Index invested in large-cap foreign stocks
21 countries, including Europe, Australia and Far East
Managed by BlackRock Institutional Trust and under control of TSP Investment Board
© 2012 Retirement Systems Solutions, Inc. 132
TSP Investment Funds
Lifecycle or L Funds
Combination of all 5 funds
Provides some diversification
Automatically re-allocated daily
Automatically re-balanced each quarter
Set it & forget it?... Use Caution!
No added fees for professional asset
management...fees are imbedded and will begin
being sent to consumers starting 2012 like all other
plans.
© 2012 Retirement Systems Solutions, Inc. 133
Thrift Savings Plan (TSP)
Choosing an “L” Fund
FUND When are $$
needed?
GROWTH Preservation
of Assets
RISK
L2050 2045 or later High Very Low Very High
L2040 2035 thru 2044 High Low High
L2030 2025 thru 2034 Moderate Low High
L2020 2015 thru 2024 Moderate Moderate Moderate
L Income In Retirement Low High Low
© 2012 Retirement Systems Solutions, Inc. 134
Before we go on….Tax Deferral
IS EXCESS DEFERRAL OF TAXES A SOUND THEORY?
We Were Told our Contributions Were…
Higher Earnings = Higher Tax Bracket
We Were Told our Withdrawals Would Be…
Lower Earnings = Lower Tax Bracket
What about TSP Contributions Above 5% Match?
Should Tax FREE options be considered?
© 2012 Retirement Systems Solutions, Inc. 135
2014 Federal Tax Brackets
What is Real Tax rate of $150,000 earnings? (~20%)
35 %
33 %
28 %
25 %
15 %
10 %
Tax
398,351 – 450,000
223,051 – 398,350
146,401 – 223,050
72,501 – 146,400
17,851 – 72,500
0 – 17,850
Married – Joint
Earnings
398,351 – 400,000
183,251 – 398,350
87,851 – 183,250
36,251 – 87,850
8,926 – 36,250
0 – 8,925
Single
Earnings
450,001 and Up 39.6 % 400,000 and Up
© 2012 Retirement Systems Solutions, Inc. 136
Historical Tax Brackets
YEAR HIGHEST TAX RATE ON INCOME OVER
1913 7.0% 500,000
1918 77.0% 1,000,000
1925 -1931 25.0% 100,000
1945 94.0% 200,000
1951 -1963 91.0% 400,000
1971 -1981 70.0% 200,000
1982 50.0% 85,600
1991 31.0% 82,150
1994 39.6% 250,000
2003 - 2012 35.0% 379,151
Historical Avg. ~ 63%.....Where Are Taxes Going?
© 2012 Retirement Systems Solutions, Inc.
Tax Deferral Conundrum…
© 2012 Retirement Systems Solutions, Inc. 138
To Roth or
Not to Roth This is the question…
© 2012 Retirement Systems Solutions, Inc. 139
What are the details?
1. Available in 2013 to most agencies
2. Allows contribution of After-Tax dollars into TSP
3. Investment and earnings of after tax contributions will
provide Tax Free access to balance after age 59.5
4. Will be coordinated with your Original “Traditional” TSP
5. Government match will be placed in the traditional tax
deferred bucket
6. Contribution Limits are the same
Thrift Savings Plan (TSP) - ROTH
© 2012 Retirement Systems Solutions, Inc. 140
Sample: Original TSP 1. Employee makes $100,000 per year
2. Employee has $50,000 in original TSP
3. $10,000 in each fund (G,F,C,S,I)
4. Employee contributes $5,000 per year Pre-Tax (same funds)
5. Government All-In matches 5% or $5,000 to this traditional bucket
6. All money is Tax-Deferred and those rules apply
Sample: ROTH TSP 1. Same employee shifts over to full ROTH contributions
2. $50,000 remains in associated funds and continues Tax-Deferral
3. New $5,000 per year are contributed After-Tax into ROTH Bucket (same funds)
4. Government All-In matches 5% or $5,000 continues to place in the Tax-
Deferred Traditional Bucket
5. New Bucket is Tax-Free if executed properly (5 years and age 59.5)
Thrift Savings Plan (TSP) - ROTH
What will it look like if this employee contributes like this and earns 7% for the next 10 years?
Person
“A”
Person
“B”
© 2012 Retirement Systems Solutions, Inc. 141
Sample 10 Year ROTH Journey…
$50,000 in
Traditional Bucket at 7% (continued contributions)
$246,193 100% Ordinary Income Tax
$172,275
$50,000 in
Traditional Bucket at 7% (stopped contributions – match only)
ROTH Bucket at 7% (NEW contributions)
$73,918
$246,193 70% Ordinary Income Tax / 30% Tax - Free
Person
“A”
Person
“B”
© 2012 Retirement Systems Solutions, Inc. 142
TSP Options at Retirement
1. Cash Out” is default option on balances <$3,500
2. Leave balance in TSP:
Up until April 1st of the calendar year after the year
you turn 70½ (RMD rules)
3. Rollover to a “qualified” IRA
4. Lump Sum Distribution
5. Immediate Annuity (Government Designated Carrier)
6. Specified Amount or Life Expectancy Distribution
(10% Penalty Caution!)
© 2012 Retirement Systems Solutions, Inc. 143
Thrift Savings Plan (TSP)
WITHDRAWAL OPTIONS
Partial Withdrawal 1. One time withdrawal
2. Before or after retirement (age based)
3. Remainder for future withdrawal
Full Withdrawal
Single Payment
Series of Equal Periodic Payments
Payments based on IRS Life Expectancy
Specified Dollar Amount
Life Annuity, or combination of above
© 2012 Retirement Systems Solutions, Inc. 144
TSP Summary
1. How much should I be contributing?
2. Should I be in Traditional or ROTH buckets?
3. What buckets best suit my needs (G,F,C,S,I) ?
4. Should I be concerned about deferred taxes as a federal
employee?
5. What distribution option is best for my situation headed
into retirement?
© 2012 Retirement Systems Solutions, Inc. 145
RETIREMENT
TIME & PROCESSING
© 2012 Retirement Systems Solutions, Inc. 146
CSRS - Best Time to Retire?
First 3 days of any month
Your computation for annuity starts immediately
Receive first retirement check the next month (5 weeks?)
If you retire after first 3 days of the month, your computation
for annuity starts at the beginning of the following month and delays
your interim checks by a month
Example:
Retire March 4th or after, computation starts on Apr 1st and interim
checks processing starts at that time…check arrives May 1st !
Leaves an entire month of retirement pay with the government
January retirement
Annual Leave “carry over”
© 2012 Retirement Systems Solutions, Inc. 147
FERS - Best Time to Retire?
Last day of any calendar Month
Your computation for annuity starts immediately
Receive first retirement check the next month (5 weeks?)
If you retire after that, your computation for annuity may start at the
beginning of the following month and delays your interim checks by
a month
Example:
Retire March 1st , computation starts on Apr 1st and interim checks
processing starts at that time… interim check arrives May 1st !
Leaves an entire month of retirement pay with the government
December retirement
Annual Leave “carry over”
© 2012 Retirement Systems Solutions, Inc. 148
NOW We Could Use Your Help:
1. Please complete evaluation and give us your
feedback so we can better serve the local community!
2. You are EACH entitled to your own personal Federal Benefits analysis on how to Maximize your Federal Benefits.
3. We would be delighted to assist you or your agencies from right here in the Greater Huntsville Alabama Area.
© 2012 Retirement Systems Solutions, Inc. 149
Questions?
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Achieving New Heights | Managing Change
PDI 2014, the premier training event hosted by the American Society of Military Comptrollers, will be
held at the Washington State Convention Center in Seattle on May 28–30.
The National Professional Development Institute (PDI) is the premier training event of the American
Society of Military Comptrollers. Resource managers in the Department of Defense and US Coast
Guard converge for a three day event whose objective is to enhance the skills and abilities that
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In addition to the more than 21 CPE credits available to attendees, the PDI provides a forum for
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