Your Retirement Plans at . . .

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Your Retirement Plans at . . .
Houston County Schools
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Goals for this session

• Show the big picture
• Understand TRS cost and benefits
• How Social Security fits in
• Save more?
• HCBE-selected retirement options
• Gathering your questions

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TRS a defined benefit plan

• Benefit is determined by formula
• Earnings x Service x 2 Benefit
• The plan assumes investment risk . . .
• . . . Not you

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What Houston puts into it

• 9.28 of pay

Annual Pay of 34,000 x
.0928 3,155 each
year
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What you put into it

• 5 of pay

Annual Pay of 34,000
x .05 1,700 each
year
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Total contributions

• 14.28 of pay
• 4,855 each year
• More as your pay increases

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Calculating benefits

• 34,000 today
• 25 years of service
• 3 pay raises
• Final pay of 71,188

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The calculation

• 2 of final pay
• Times years of service 25 Years
• 2 x 25 50
• 50 of 71,188 35,594
• Just under 3,000/month

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What about Social Security?

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What Houston puts into it

• 6.2 of pay

Annual Pay of 34,000 x
.062 2,108 each year
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What you put into it

• 6.2 of pay

Annual Pay of 34,000 x
.062 2,108 each year
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Total contributions

• 34,000 salary
• About 4,200 each year
• More as your pay increases

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How is the benefit calculated?

• Complex formula specified by law using
• Average career earnings
• When you choose to retire
• The plan assumes investment risk . . .
• . . . Not you

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Total contributions

• On 34,000 pay
• 26.68
• Over 9,000 per year
• Growing each year

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Total benefit at retirement

• TRS 3,000
• SS 1,800
• Total 4,800
• Final Pay 5,932

81 of your final pay
estimated
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Think spendable income

• Gross pay 100
• Less TRS cost 5
• Less SS cost 7.65
• Less other costs 4
• Spendable income 83.35

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Nearly full replacement

• Spendable retirement income
• Spendable pre-retirement income
• A very close match
• Total income adjusts with COL
• Great security

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Why save more?

• Wont have 10 years service
• Stop working before SS begins
• No retirement benefits for spouse
• Have big plans?
• What are your goals/needs?

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Want to save more?

• How much greater benefit?
• Create a savings target
• Deciding how to invest
• Tells what you need to save

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The risk/return spectrum
High return
High risk
Small-company stocks
Large-company stocks

Bonds
Fixed income funds
Money market funds
Low return
Low risk
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Determining your risk tolerance

• Conservative
• Moderate
• Aggressive

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How long do you have to save?

• Just starting out
• Mid-career
• Nearing retirement
• At retirement

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Our supplemental options

• AIG Valic
• TIAA-CREF

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Why these two?
AIG - VALIC

• Choice of many of you
• Local representative
• Many different funds
• Large, well-known company

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Why these two?
TIAA-CREF

• Choice of most colleges
• Much lower expenses
• Large, highly-rated company
• A very different option

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The impact of expenses

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Putting it all together

• Know what benefits youre likely to get that are
  already being funded by HCBE and you
• Get and review your TRS and Social Security
  statements
• Visit the websites

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Websites

• www.socialsecurity.gov
• www.trsga.com

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What to do next

• Attend next meetings to hear more about TRS and
  Social Security
• Attend meeting on Investing 101
• Discuss your goals with an AIG-VALIC or
  TIAA-CREF advisor