Workshop ey w nc conference 06-18-14 final

Financial Planning Workshop
GBOPHB

Session objectives
Take the Know Your Numbers quiz
Consider your retirement goals and
income needs through a 6-step process
Consider your investment strategy
Learn to use the tools and resources
available to you
Know which steps to take next

Tools and resources
EY workshops
and webinars
General Board Website
• www.gbophb.org
EY Website
• EY Financial Planning
Center® (EYFPC)
Benefits Access
• www.benefitsaccess.org
Telephone counseling
• EY Financial
Planner Line® (EYFPL)
General Board
Call Center
• 1-800-851-2201

EY Financial Planner Line®
•No cost for participants in General
Board Retirement Plans
•Objective and confidential
•Financial planning
•Retirement
•401(k) /403(b)/investments
•Education
•Insurance
•Debt & spending
•Much, much more!
•How To get started:
•Phone: 1.800.360.2539
•Monday - Friday, 9 a.m.- 8 p.m. Eastern

Action Step
• Site: http://gbophb.eyfpc.com
• Company code: gbophb
• Company program: gbophb

Action Step When Done
□
□
□
□
□
□
□
Personal action plan
Action Step
• Create your own personal action
plan throughout this presentation

Net Worth
Statement
Cash Flow
Statement
Where are You Today?
Net Worth = Assets ― Debts
Cash Flow = Income ― Expenses

Know Your Numbers
Planning “Number” Resource / Action
Net Worth and debt interest rates
Your REAL cash flow
Emergency fund need
Credit score
Credit report
Future value – retirement
Retirement time horizon & “Picture”
Asset allocation / approach
Retirement savings % / $
Estate planning documents
Presentation title

Know your numbers:
Net Worth
• Prepare annually; develop a goal to increase Net
Worth number each year
Net worth
(assets – debts)
• Financial approach
• Psychological approach
• Cash Flow approach
Interest rates
from high to low
• Monthly debt payments ÷ Monthly gross income
• < 36% is preferred by lender
• > 42% - potential signs of financial difficulty
Debt to
income ratio
• Can deduct up to $2,500 in qualifying student loan
interest per year
• Adjusted Gross Income limits apply
• MFJ: $130k - $160k Single: $65k - $80k
Student loan
interest
deduction

Prepare an annual Net Worth statement
Assets
401(k) and IRAs $150,000
Bank account $20,000
CDs $10,000
Home $200,000
Car $20,000
Other assets $25,000
Total Assets $425,000
Debts
Credit card $5,000
Car loan $10,000
Mortgage $110,000
Total Debts $125,000
Net Worth $300,000
Goals
Retirement
Emergency
Fund
Action Step
• Visit “Calculating Your
Net Worth” on the
EYFPC.

Prepare a Cash Flow statement
Ways to control spending
Comparison shop before
spending
• Use a price check app on your
phone while at the store
Avoid impulsive spending
opportunities
Use credit cards
responsibly, or use cash,
checks or debit cards to
control spending
Monitor ATM withdrawals
Maintain a budget to
understand where your
money ‘belongs”
Record all expenditures
(Notebook Method)

Personal Decisions — Finding Ways to Save
*Savings grown tax-deferred at 7% per year for 30 years and assumes no withdrawals; figures rounded to the nearest $100
ACTIVITY SAVINGS GROWTH*
Dine out one less time per month $45 / month $54,600
Spend less on dry cleaning $7.50 / week $39,400
Reduce new clothes purchases $400 / year $40,300
Skip gourmet coffee every other day $7 / week $36,800
Car wash every two weeks vs. each week $12 / month $14,600
Stream a movie vs. going to the theatre $11 / month $13,300
Total savings & investment growth $1,970 / year $199,000

Know your numbers:
Maintain an emergency fund
Know your number: 6 months of necessary expenses

Know your numbers:
Obtain your credit score

Know your numbers:
Access a free credit report every 4 months

Funding Your Goals: Education
• Tuition
• Room and board
• Books and supplies
• Travel
• Other (telephone, extracurricular activities, etc.)
What are the costs involved?
• In-state / Out-of-state
• Private / Public
What type of school?
• 529 Plans
• Financial aid (grants, scholarships, student loans, work-study programs)
• Personal savings and investments
• Other loans
• Tax credits
What are your savings and education funding sources?
Presentation title
Action Step
• Call the EYFPL for an
Education Funding
Analysis & discussion

1) What are your goals?
2) What will you need?
3) What will you have?
4) Is there a gap?
5) What should you do?
6) How can you stay on track?
The retirement planning process

• When will you retire?
• Where will you live?
• What will you do?
Action Item: Develop your “Picture of Retirement”

Age
65
Age
35
Age
90
30
years
25
years
TODAY
HOW MANY
YEARS?
END
OF
RETIREMENT
BEGINNING
OF
RETIREMENT
HOW MANY
YEARS?
Know your numbers:
Consider your retirement time horizon today

What will you do with your time?
Will you be
employed?
Will you do
volunteer work?
Will you take up
a hobby?
What activities do
you enjoy?
Will you join a
club?
Do you plan to
travel?

Where will you live in retirement?
A. Current home
B. If living in a parsonage, will you buy or rent a home?
C. Buy a home, in state or out of state
D. Rent a home, in state or out of state
F. Don’t know

• How long will you live?
• What income will you need each year?
• How will inflation impact your needs?
• Will you have any one-time expenses?

Estimating your spending during retirement
Today
FICA/SECA Taxes 15%
Savings 7%
Transportation/commute 8%
Income Taxes 15%
Housing 20%
Clothing 5%
Food 10%
Gifts/donations 10%
Entertainment 5%
Insurance 5%
Replacement Ratio 100%
Retirement
0%
0%
5%
10%
20%
5%
10%
10%
10%
10%
80%
Action Step
• Visit the “forms” section of the EYFPC to complete the cash flow statement
worksheet to help determine your current and future spending

How will inflation affect you?
Years From Now 3% Inflation
0 $50,000
10 $67,200
20 $90,300
30 $121,400
40 $163,100
50 $219,200
60 $294,600
Note: Figures rounded to the nearest $100
4% Inflation
$50,000
$74,000
$109,600
$162,200
$240,000
$355,300
$526,000

• Social Security
• GBOPHB Benefits
• Personal Resources

Social Security
When can you collect benefits?
Born
Age For Full
Benefits
Reduced Benefit
At Age 62
Delayed
Retirement
Credits
Before 1938 65 80% 7% - 8%
1943-1954 66 75% 8%
1960 and Later 67 70% 8%
Note: For missing years add two-month increments to reach your age for full benefits

Know your numbers:
Social Security statement
Action Step
• Visit www.ssa.gov to obtain your Social
Security statement, review your earnings
record, and run the Retirement Estimator

How do you benefit from the General Board
Retirement Plans?
Features Benefits
Plan Types ►DB and DC components
Contributions ►100% church funded
Payment Options
►CRSP DB: Monthly benefit
►CRSP DC: Lump sum or cash installments
►MPP: As of 01/01/14, 65% must be annuitized
►Pre ‘82: Monthly benefit
Vesting ►100% immediate
Action Step
• Use Benefits Access to obtain a projection of your retirement benefits

How do you Benefit from the UMPIP?
Features Benefits
Matching Contribution ►Incentive to contribute
Pre-Tax Savings
►Reduces current Federal & SECA taxes
►Helps you save more
Tax-Deferred
Compounding
►Savings grow faster
Investment
Control/Responsibility
►Self-directed or LifeStage
Payment Option ►Lump Sum or cash installments
Payroll Deduction ►Automatic savings
Action Step
• Contribute at least 1% of your pay to the UMPIP to receive a 1% match

How to benefit from the UMPIP over time
$1,200 Annual
Savings
$3,000 Annual
Savings
$4,800 Annual
Savings
Start Saving at
Age 55
$16,800 $41,900 $67,100
Start Saving at
Age 45
$46,800 $117,000 $187,200
Start Saving at
Age 35
$100,600 $251,400 $402,200
Start Saving at
Age 25
$196,900 $492,100 $787,400
Accumulated Savings at Age 65:
Assumes a 6% annual rate of return. Figures rounded to the nearest $100.

Lifestage Retirement Income
• Service that manages your distributions by turning your
defined contribution accounts into monthly payments
designed to last for your lifetime.
What is it?
• Yes, this service manages the investment aspect of your
account. This combination aims to provide regular monthly
income with adjustments for inflation.
Must you use
LifeStage Investment
Management Service?
• The payments vary each year based on the value of your
Defined Contribution Account, age, investment performance
and other factors in your LifeStage personal profile.
How are the
payments determined
each year?
• You can you stop the service or take additional withdrawals
from your account at any time.
• Can set aside a reserve amount for emergencies of up to
20% of the balance
What flexibility
does it provide?
Action Step
• To learn more, visit www.gbophb.org/sri_funds/lsri.asp

Designated housing allowance exclusion
• When taking distributions from the CRSP or UMPIP, you
may elect to have some or all of your withdrawals excluded
from federal gross income as housing allowance exclusion
What is it?
• Yes, it can be applied to both lump sum and monthly
benefits received from MPP, CRSP-DB and pre 1982 plans
Can it be applied to annuity and lump sum distributions?
• Can elect to have no taxes withheld from annuity payments
How does it impact withholding?

Designated housing allowance –
Excludable income
The amount excludible from gross
income is the lesser of:
1
• Amount officially designated as housing allowance by the
General Board
2
• Actual expenses for your primary residence, including:
• Mortgage principal and interest, utilities, taxes, insurance, maintenance
and furnishings
3
• Fair rental value of the home, including furnishings and cost of utilities

Designated housing allowance –
Example
Amount
officially
designated
as housing
allowance
by the
General
Board
$30,000
Amount
spent for
your primary
residence
$24,000
Fair rental
value of the
home,
including
furnishings
and cost of
utilities
$28,000
• Amount excludable from gross income$24,000

Taxation of GBOPHB benefits
• Subject to ordinary income taxes
• 10% penalty may apply if under age 59 ½
• Mandatory withholding of 20%
• Accounts subject to Required Minimum Distributions at Age 70½
Lump sum and installments
• Subject to ordinary income taxes
• Optional withholding
Annuity distributions
Note: Taxation may differ if distributions are designated as a “housing allowance exclusion”

Personal resources
IRAs
Taxable
accounts
Previous
employer’s
retirement plans
Spouse/partner’s
retirement assets
and pension
Equity in
personal
residence

IRAs: Eligibility and contributions
Traditional IRA Roth IRA
Ability to
Contribute
► Must have earned income
(non-working spouse is eligible to
contribute)
► Must have earned income
(non-working spouse is eligible to
contribute)
►2014 AGI Phase Out
►Single & HOH: $114,000 - $129,000
►MFJ: $181,000 - $191,000
Maximum
Contributions
►$5,500
►$1,000 catch-up for those age 50+
Contribution
Deductibility
► 2014 AGI Phase Out – You
►Single & HOH: $60,000 - $70,000
►MFJ: $96,000 - $116,000
► 2014 AGI Phase Out – Spouse
►MFJ: $181,000 - $191,000
►Not deductible
Taxation of
Distributions
►Ordinary income on before-tax
contributions and earnings
►10% penalty may apply if under
age 59 ½
►Tax-free qualified distributions
►Non-qualified distributions may
be subject to tax and/or penalty

• 40Years (until goal)
• 7%Annual Interest %
• $0Present Value
(current balance)
• $6,000Annual Payment
(savings)
• $1,281,657Future Value
• 35Years (until goal)
• 7%Annual Interest %
• $0Present Value
(current balance)
• $6,000Annual Payment
(savings)
• $887,481Future Value
Know your numbers:
Use the Savings Calculator on the EYFPC or a future value app

• How do your goals and income
sources compare?
4) Is there a gap?

Run a retirement report
Action Step
• Visit the EYFPC and/or
call the EYFPL for a
retirement funding analysis

4) Is there a gap?
• What can you do?
• What are you willing to do?

4) Is there a gap?
• Monitor and update your plan at least annually
6) How can you stay on track?

Closing the gap
Save more Work longer
Spend less in retirement
Use an alternate asset
allocation
Combination

Know your numbers:
Asset allocation asset class percentages
Foreign
Equity __%
Fixed
Income __%
Large Cap US
Equity __%
Mid/Small Cap
US Equity __%

Deciding your investment approach
Key
Decision Factors
Choose Your
Own Set of
Investments
Use the
Guidance of
an EY
Planner
Choose a
Balanced
Fund
Use
LIfeStage to
Manage Your
Portfolio
Time Required
Knowledge Required
Choose an Asset
Allocation
Reallocate Existing
Balances and Future
Contributions
Rebalance

Why is asset allocation important?
Asset-class winners and losers
Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2014 Morningstar. All Rights Reserved.
Highest
return
Lowest
return
• Small stocks • Large stocks • International stocks • Long-term government bonds • Treasury bills • Diversified portfolio
28.2
3.1
2.1
0.0
–3.3
–11.7
11.628.6 29.8 21.5 22.8 17.8 60.7 20.7 14.0 26.9 25.9
9.920.3 27.3 5.9 3.8 1.6 39.2 18.4 7.8 16.2 1.6
5.513.1 21.0 0.1 3.7 –6.3 28.7 11.9 7.1 15.8 –17.9
5.311.9 14.8 –3.6 –0.6 –13.3 26.2 10.9 5.7 13.0 –36.7
4.74.9 4.7 –9.1 –11.9 –15.7 1.4 8.5 4.9 4.8 –37.0
–5.2–7.3 –9.0 –14.0 –21.2 –22.1 1.0 1.2 3.0 1.2 –43.1
32.5
28.1
26.5
14.4
0.1
–14.9
31.3
15.1
13.0
10.1
8.2
0.1
18.2
17.9
16.0
11.1
3.3
0.1
45.1
32.4
23.3
17.9
0.0
–11.4
33.4
22.8
15.9
15.9
5.3
2.1
23.0
17.6
10.2
6.4
5.2
–0.9
37.6
34.5
31.7
24.2
11.6
5.6
8.1%
3.9
3.1
1.7
1.3
–7.8
20081998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 20131997199619951994

Small stocks Large stocks Government bonds Treasury bills
–60
–30
0
30
60
90
120
150%
1-year
Holding period
5-year 20-year 1-year 5-year 20-year 1-year 5-year 20-year 1-year 5-year 20-year
Compound
annual return:
12.3% 10.0%
5.5% 3.5%
Past performance is no guarantee of future results. Each bar shows the range of compound annual returns for each asset class over the period 1926–2013. This is for
illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2014 Morningstar. All Rights Reserved.
1926–2013
5-year holding periods
Reduction of risk over time

UMPIP investment options
Asset Class Fund Name Expense Ratio
Multi Asset Class
Multiple Asset Fund 0.67%
Balanced Social Values
Fund
0.44%
Fixed Income (Bonds)
Stable Value Fund 0.36%
Inflation Protection Fund 0.44%
Fixed Income Fund 0.55%
Equities (Stock) – All Cap U.S. U.S. Equity Fund 0.71%
Equity (Stock) – Foreign International Equity Fund 0.83%

• Automatic rebalancing and reallocation
Provides customized investment fund allocation
using the General Board investment options
• Ability to opt in and out for optional plans
Mandatory use for some plans, optional for others
• Free to active and inactive members
No cost to you
• Customized investment mix developed based on age, risk
tolerance and eligibility for Social Security Benefits
A personal Investment Profile can be developed
LifeStage Investment Management Service
Action Step
• Visit gbophb.org to learn more
and/or sign-up for LifeStage

Deciding your investment approach
Key
Decision Factors
Choose Your
Own Set of
Investments
Use the
Guidance of
an EY
Planner
Choose a
Balanced
Fund
Use
LIfeStage to
Manage Your
Portfolio
Time Required High Medium Low Low
Knowledge Required High Low Low Low
Choose an Asset
Allocation
You EY Fund Manager LifeStage
Reallocate Existing
Balances and Future
Contributions
You You You LifeStage
Rebalance You You Fund Manager LifeStage

Ensure your wishes are followed
• Financial & Healthcare
• Choose today who will make your financial and health decisions for you if
incapacitated
Powers of Attorney
• Make your life sustaining wishes known to family and doctors
Living Will
• Opportunity to make key decisions – executor, guardian, distribution of
personal assets
Will
• LOOK at the forms every 5 years
Beneficiary forms
• Organize your affairs – ease the burden on your survivors
Vital Records Organizer
Action Step
• Visit the estate planning section of
the EYFPC to print and complete
a Vital Records Organizer

Know Your Numbers
Planning “Number” Resource / Action
Net Worth and debt interest rates EYFPC: Calculating your net worth
Your REAL cash flow Notebook Method
Emergency fund need Necessary expenses x 6
Credit score CreditKarma.com
Credit report AnnualCreditReport.com
Future value – retirement fCalculate (iPhone) or other
Retirement time horizon, “Picture” and
pricetag
You
Asset allocation / approach You and/or EY financial planner
Retirement savings % / $ EY Retirement analysis report
Social Security projection
Estate planning documents EYFPC / Attorney / Computer
Presentation title

Tools and resources
EY workshops
and webinars
General Board Website
• www.gbophb.org
EY Website
• EY Financial Planning
Center® (EYFPC)
Benefits Access
• www.benefitsaccess.org
Telephone counseling
• EY Financial
Planner Line® (EYFPL)
• 1-800-360-2539
General Board
Call Center
• 1-800-851-2201

Personal action plan
Action Step When Done
Consider your retirement goals and
determine your income needs
Next 10 days □
Determine your investor profile Next 14 days □
Develop and implement an appropriate
savings and investment plan
Next 30 days □
Call the EYFPL and visit the EYFPC As needed □
Monitor and update your plan At least annually □

Workshop ey w nc conference 06-18-14 final

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Workshop ey w nc conference 06-18-14 final