RETIREMENT MISTAKES INVESTMENT AND TAX PLANNING TAMMY FLANAGAN RETIREMENT BENEFITS SPECIALIST MAXIMIZING YOUR FEDERAL RETIREMENT BENEFITS

TAMMY FLANAGAN – FEDERAL BENEFITS SPECIALIST PRESENTER Webinars and Seminars retirement.com/webinar/ Pre-Retirement Mid-Career New Employee Radio Co-Host: For Your Benefit WRITER Feature Columnist Webinar Presenter Weekly Column  “Retirement Planning” Retirement Readiness Webinar on June 16 th ! Send me an for the link!

MISTAKE #1: AVOIDING RISK AND PLAYING IT TOO SAFE

RISK

Equities : C, S, and I funds are essential For a diversified retirement portfolio (mix of investments) The key to investing for and during retirement isn’t to avoid risk, but to diversify it. Due to rising life expectancies, retirement can last 30+ years

IS THIS A DO-IT-YOURSELF PROJECT? OR THIS IS A DO-IT-YOURSELF PROJECT!

MISTAKE #2: WHO CAN WE TRUST TO HELP US?

MonthL IncomeL 2020L 2030L 2040L 2050G FundF FundC FundS FundI Fund 2014 Jun0.58%1.19%1.52%1.77%1.96%0.19%0.14%2.07%4.45%0.99% Jul(0.26%)(0.97%)(1.34%)(1.63%)(1.86%)0.19%(0.19%)(1.37%)(4.38%)(1.95%) Aug0.84%1.64%2.07%2.40%2.61%0.20%1.12%4.01%4.98%(0.14%) Sep(0.42%)(1.36%)(1.84%)(2.18%)(2.50%)0.18%(0.58%)(1.40%)(5.10%)(3.82%) Oct0.61%1.09%1.36%1.58%1.70%0.20%0.96%2.45%4.11%(0.63%) Nov0.55%1.04%1.27%1.42%1.55%0.17%0.74%2.70%1.33%0.51% Dec(0.04%)(0.50%)(0.67%)(0.76%)(0.94%)0.18%0.21%(0.24%)0.99%(4.13%) 2015 Jan(0.08%)(0.58%)(0.83%)(1.02%)(1.18%)0.18%2.13%(2.99%)(1.85%)1.19% Feb1.19%2.95%3.80%4.39%4.99%0.13%(0.91%)5.75%6.05%5.97% Mar(0.07%)(0.44%)(0.58%)(0.64%)(0.76%)0.16%0.47%(1.57%)1.24%(1.43%) Apr0.37%0.81%0.95%1.00%1.16%0.15%(0.28%)0.96%(1.50%)4.11% May0.30%0.50%0.62%0.72%0.78%0.17%(0.26%)1.29%1.84%(0.42%) YTD1.72%3.25%3.96%4.43%4.97%0.79%1.13%3.26%5.71%9.59% Last 12 mo

MISTAKE #3: FOCUS ONLY ON ACCUMULATION

How much of my income will come from… FERS/CSRS? Social Security? Other sources? … at my 1 st Eligibility for CSRS or FERS? 5 years later? Are there any other milestones? HOW MUCH DO I NEED FROM TSP TO REACH MY GOAL? How much of my income will come from… FERS/CSRS? Social Security? Other sources? … at my 1 st Eligibility for CSRS or FERS? 5 years later? Are there any other milestones? HOW MUCH DO I NEED FROM TSP TO REACH MY GOAL?

WHAT DO YOU NEED THE TSP TO DO FOR YOU?

THRIFT SAVINGS PLAN

EXAMPLE OF PARTIAL WITHDRAWAL

EXAMPLE OF FULL WITHDRAWAL May change amount

REQUEST FOR PARTIAL WITHDRAWAL TSP-77 23

REQUEST FOR FULL WITHDRAWAL TSP-70 24

MONTHLY PAYMENTS

MONTHLY PAYMENTS: LIFE EXPECTANCY

MONTHLY PAYMENTS: ANNUITY

6% Rate of Return

TSP RETIREMENT INCOME CALCULATORS

ONE MINUTE VIDEO

BONUS MISTAKE: FORGETTING ABOUT TAXES!

ORDINARY INCOME TAX: 2015 FEDERAL TAX BRACKETS RateSingleMarried (Joint Return) 10%$0 - $9,225$0 - $18,450 15%$9,225 – $37,450$18,450 - $74,900 25%$37,450 - $90,750$74,900 - $151,200 28%$90,750 - $189,300$151,200 - $230,450 33%$189,300 - $411,500$230,450 - $411,500 35%$411,500 - $413,200$411,500 - $464, %$413,200+$464,850+

Other IRS Publications: Credit for the Elderly or the Disabled Pension and Annuity Income Contributions to Individual Retirement Arrangements (IRAs) Distributions from Individual Retirement Arrangements (IRAs) General Rule for Pensions and Annuities

SOCIAL SECURITY MAY BE TAXABLE Provisional Income: adjusted gross + tax-free interest + 50% of Social Security benefit

Kiplinger State by State Tax GuideKiplinger State by State Tax Guide/

Kiplinger State by State Tax GuideKiplinger State by State Tax Guide/

MARITAL STATUS If you get married, get divorced, or become widowed as a retiree, you may need to change your: Survivor benefit electionSurvivor benefit election for your retirement benefit. Health insurance coverageHealth insurance coverage. Beneficiary designation forms for FEGLI, CSRS or FERS, and TSP.FEGLICSRSFERSTSP Social Security benefits payable to your new spouse or from your new spouse.to your new spousefrom your new spouse If you get married, get divorced, or become widowed as a retiree, you may need to change your: Survivor benefit electionSurvivor benefit election for your retirement benefit. Health insurance coverageHealth insurance coverage. Beneficiary designation forms for FEGLI, CSRS or FERS, and TSP.FEGLICSRSFERSTSP Social Security benefits payable to your new spouse or from your new spouse.to your new spousefrom your new spouse

MARITAL CHANGES: CSRS AND FERS