Retirement 2007

CMW Financial, Inc. Financial Representative of and Advisory Services and Securities Offered through Lincoln Investment Planning, Inc., Registered Investment Advisor, Member NASD/SIPC. CMW Financial, Inc. and Lincoln Investment Planning, Inc. are independently owned and each is responsible for its own business. 09/07 Don’t Retire – Rewire! What’s Your Next Chapter?

What is Retirement? Pay Off Bills Pay Off House Buy Retirement Car

What Retirement Is… Opportunity The Next Chapter Hobbies Family Working at Something You Love

How Long Should I Plan For? ,[object Object],Couple Age 62 Today Joint Life Expectancy 89 92

How Should I Plan for One-Third of My Life?

The Pyramid of Financial Independence © RETURN RISK

Goals ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Modern Portfolio Theory (MPT) ,[object Object],[object Object]

What You See… ,[object Object],S&P 500 Index Average Mutual Fund Investor 3.7% 13.2% Average Annual total Returns 1984-2004 Source: Dalbar, Inc.

How Much Income Will I Need… ,[object Object],… in 10 years … in 15 years … in 20 years from now?

Your Retirement Income Should Support Your Needs & Goals ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

ORP Do I leave my money where it is? ,[object Object],Paycheck Retirement Paycheck $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

ORP How do I safely develop a spending plan so my money lasts? ,[object Object],[object Object]

How Standard Annuity Calculated Average of Highest 3 or 5 Annual Salaries May also visit http://www.trs.state.tx.us/Benefits/RetEst.html for an online Retirement Estimate Worksheet. Grandfathered Option Annual Annuity / 12 = Monthly Standard Annuity Total % Average Salary x = Annual Annuity Total Years of Service Credit x Total % = 2.3% (.023)

Grandfathered Provision ,[object Object],[object Object],[object Object],[object Object],Age 50 or meet the rule of 70 or have 25 years of service at 08/31/2005 if not covered by one of above, then the following will apply beginning 9/1/05

Increase Your Income in the Last 3/5 Years You Work ,[object Object],[object Object],[object Object],Increase your income for the rest of your life!

Buy Back Years to Increase Retirement Income 1. TRS members who have service credit in another state before 01/01/2006 can purchase TRS out of state service at the current subsidized cost. Purchase of out-of state service credits accrued after 1/1/06 will be charged at the full actuarial cost. Unlimited Substitute 5 Military 15 Out of State 1 Unlimited Texas 1 50 State Days 2 Career

These payment are not tax-sheltered.

How Do I Finance? ,[object Object],[object Object],[object Object],- Rolling takes 2 - 3 months

Eligibility for TRS-Care 1 ,[object Object],[object Object],[object Object],[object Object],1. Increase active member contribution to TRS Care from .5% to .65%

Vesting ,[object Object],[object Object],[object Object],* Even if you meet rule of 80, you must be 60 to get full benefits

Here’s the Math ,[object Object],[object Object],$ 34,500  12 = $2,875 per month $ 34,500

Out of State Years ,[object Object],Cost of Buying Out of State Years

Buying Back Years is Essential ,[object Object],$46,000  12 = $3,833 per month $ 3,833 - $2,875 = $958 more per month

Buying Back Years is Essential ,[object Object],[object Object],Years to Recover: 4.4

Investment Decisions ,[object Object],$166 per month Not Guaranteed

Buying Back Military ,[object Object],$50,000 x 6.9% (2.3 x 3) = $3,450 Annual Gain $287.50 Extra Per Month Years to Recover: 4.9

Partial Lump Sum ,[object Object],[object Object],[object Object],I want to have the money to...

The Tax Implications of Taking PLSO in Cash ,[object Object],[object Object],[object Object],[object Object],[object Object],Net To You: $ 81,000

Tax Implication of Taking Just Part of Your PLSO in Cash ,[object Object],[object Object],[object Object],[object Object],[object Object],Net To You $30,000

The Alternative ,[object Object],[object Object],*approximately $20 per month per $1,000 borrowed

TERRP* District Matching Bonus 403(b) / 457 ,[object Object],[object Object],[object Object],* Teacher/Employee Recruitment and Retention Program Annual Cap $360 100% of employee contributions up to 2% of pay Perfect Attendance $270 75% of employee contributions up to 1.5% of pay Excellent Attendance (absent fewer than 3 days) $180 50% of employee contributions up to 1% of pay Basic Matching

TRS-Care ,[object Object],[object Object],[object Object]

TRS and Social Security ,[object Object],[object Object]

Ages Increase to Receive Benefit 67 1960 and later 66 and 10 months 1959 66 and 8 months 1958 66 and 6 months 1957 66 and 4 months 1956 66 and 2 months 1955 66 1943-54 65 and 10 months 1942 65 and 8 months 1941 65 and 6 months 1940 65 and 4 months 1939 65 and 2 months 1938 65 1937 and prior Full Retirement Age Year of Birth

Retirement 2007

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Retirement 2007