1. Will We Have to Work Forever? Revised 2009

2. Susan K. Morris, AFC Extension Educator, Family and Consumer Sciences Montgomery County “Educating People to Help Themselves ”

3. Is a retirement plan really necessary?

4. Your Retirement Goals What’s your choice? Retire by age ? Work part-time? Travel? Buy a home in warmer climate? Reduce lifestyle? Maintain or increase current lifestyle?

6. When do you plan to retire? How much to save? Age 35 Age 55 $1$4

8. How long will your retirement last?

10. What will retirement cost?

11. What are the sources of retirement income?

12. Sources of Retirement Income Social Security Company Retirement/Pension Plans Individual savings Tax deferred or taxable Part time work

13. Social Security  Contribute for 40 quarters  Replacement rates between 59% and 24% depending on income earned  Collect full benefits at designated retirement age

14. Full Retirement Age by Year of Birth Year of BirthFull Retirement Age 1937 & earlier65 years 193865 years, 2 months 193965 years, 4 months 194065 years, 6 months 194165 years, 8 months 194265 years, 10 months 1943 - 195466 years 195566 years, 2 months 195666 years, 4 months 195766 years, 6 months 195866 years, 8 months 195966 years, 10 months 1960 & after67 years

15. Check Social Security Records þ SSA will automatically mail your statement of retirement, disability & survivor benefits 90days before your birthday þ Use “Requests for Earnings and Benefits Form” from Social Security office or call 1-800-772-1213 or consult web site www.ssa.gov þ Save IRS W-2 Forms

16. Retirement Plans  Company Retirement Plans  Salary Reduction Retirement Plans  Individual Retirement Accounts (Traditional or Roth)  Plans for the self-employed

17.  Maryland State Retirement and Pension System  Optional Retirement Plans Which State Retirement System Are You Enrolled In?

19. College of Information Studies (CLIS) Administrative Affairs (VPAA) BSOS (BSOS) College of Life Science (CLFS) Architecture (ARCH) Education (EDUC) Libraries (LIBR) CMPS (CMPS) Engineering (ENGR) Office of Extended Studies (EXST) President’s Office (PRES) Journalism (JOUR) Shady Grove (SGC) Research & Grad School (VPR) Public Affairs (PUAF) R. H. Smith School of Business (BMGT) School of Public Health (SPHL) Student Affairs (VPSA) ARHU (ARHU) SVPAAP (SVPAAP) Relations (VPUR) University OIT (OIT) Undergraduate Studies (UGST) AGNR (AGNR) University Human Resources - UMCP

20. TAKE ADVANTAGE OF TAX DEFERMENT

21. Contributions with pre-tax dollars lowers taxable income. Pre-Tax= $1.00 After-Tax= 72¢ $1.00 earned - 28¢ taxes = 72¢ to save

22. TAX DEFERRAL MAGIC 403b 457 IRA 401k

23.  MD Supplemental Retirement Plan (administered by Nationwide)  Fidelity Investments  TIAA-CREF  401(a) Match - $600 Are You Enrolled in a Supplemental Retirement Plan?

24. Today may be a good time to start! DID YOU KNOW? Save $5 a week until age 65 - Start at 20= $114,282 - Start at 30= $49,701 - Start at 40= $20,606 The Time Value of Money

25. Maximize benefits from your Retirement Plans $ Begin contributions as soon as possible. $ Make maximum contributions allowed, if possible. $ Choose investments that pay high earnings

26. Individual Retirement Accounts Tax-deferred retirement program Must have earned income or alimony Contribute up to *:$5,000 in 2009 *Amount shown is for an individual. Amount doubles for a couple.

27. Traditional Individual Retirement Accounts Fully deductible from income taxes if no retirement plan at work. OR May be partially or fully deductible, based on Adjusted Gross Income.

28. Deductible IRA Income Limits Year 2009 Joint Return $89,000-$109,000 (married filing jointly) $166,000-176,000 (only one is an active participant) Individual Return $55,000-$65,000 For 2010 and beyond, check with IRS publications for IRA income limits.

29. Deductible IRA Contributions Reduce taxable income Report on 1040 tax form

30. Traditional Non-deductible IRA Contributions File IRS Form 8606 with Federal Tax return Retain copy permanently

31. Roth IRA Contributions made with after-tax dollars No mandatory age for withdrawals No mandatory age limit for contributions Contributions (after-tax dollars) always available for withdrawal without penalty

32. Investing in IRAs Don’t have $5,000 all at once? Consider making automatic monthly payments from a checking account or through payroll deduction.

33. Timing IRA Contributions  Make contributions as early in year as possible  You can make previous year’s contribution until April 15th, but tell account custodian it is for the previous year

34.  Accounts can be held in any bank, credit union, mutual fund company, and/or brokerage firm.  Investments can be reallocated.  Invest for high return.

35. Transferring Your Money IRA Direct Transfers Rollover Transfers

36. Other IRA Transfers Employer plan to employer plan Employer plan to rollover IRA Employer plan to employer plan Employer plan to rollover IRA

37. How much have you currently set aside for retirement?

38. Estimating the Amount to Save $ Retirement income goal $ Social Security and Pension income $ Additional income needed $ Value of assets currently owned $ Revised amount to save

39. Retirement Calculators

40. Do your own “Ball Park E$timate” for retirement planning http://www.choosetosave.org/ballpark/

41. Retirement Planning Has Changed! $ More self-directed $ No “guarantees” $ Living longer $ Portable plans $ Inflation & taxation

42. Think of retirement as a vacation -- take half as much baggage and twice as much money!

43. Now... What are your questions? Your input is very valuable to us! Please take a moment to complete the evaluation form.

44. Will We Have to Work Forever? Revised 2009