1. Retirement Accounts

2. Save $20,000 for 47 years with 8% interest Worth $744,640 10% interest, Worth $1,763,949 Every Million saved = $50,000 in retirement With 8% annual interest rate Calculate what you want to make in retirement Consider Social Security payouts Consider retirement account payouts

3. Answer I think and I want on page 32 Watch Dave Chapter 3, Part 1 Do you have all page 33 to 35 answers? IRS (Internal Revenue Service) codes Retirement account = tax savings All names based on tax code Just a name of account - have all types of investments in the account Dressed up in a coat

4. Roth Pay taxes now & Never again Money grows tax free Tax Deferred Accounts Make more now than retirement Pay taxes latter = pay less in taxes If take $ early = penalty

5. SEPP Self-employed person may deduct up to 15% How a pension work now days Tax, employer and (minimum) employee funded Get to retire without saving much / any Who gets them? Politicians, Police, Fire, Teachers – Public Servants

6. Companies really do not have pensions Most are now self-funded and matching plans 401(k) = company 403(b) = non-profit organization 2010 median match = 3% of pay Meaning, earn $40,000 you put at least 3% or $1,200 in 401(k) and employer will put in 3% or $1,200 free money into your account Law forces you to enroll or opt out Can usually put up to 15% into 401(k) up to $17,000

7. Deferred compensation For government employees Do not use a Guaranteed Investment Contract Difference between 457 & 401/403 No 10% penalty for withdrawal before the age of 59½ Independent contractors can participate

8. You should be funding your plan whether your company matches or not. You should always rollover retirement plans to an IRA when you leave the companyrollover Or, if allowed roll to your new 401(k) Or, you will be charged more fees Use a direct transfer or may get charged taxes and penalties Answers: Pay the taxes separately and you understand all taxes will become due

9. Never BORROW on your retirement plan Will become a habit 1. Fund 401(k) or other plan up to the Match 2. Above the match, fund Roth IRAs 3. Complete 15% of income by going back to your 401(k) or other plans

10. Date of birth: 6/15/1988 Current earnings: $40,000.00 Benefit in year-2010 dollars Retirement month: 6/2049 Estimated monthly benefit Start at age 62 and 1 month in 2050 $1,061.00 For your estimate, we assumed no future increases in prices or earnings

11. Worksheet – Watch Dave and answer questions Will go over