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How do you envision your retirement?
1
It’s About Money, Not Age
One of the biggest misconceptions people have about retirement is that it is simply a function of age.
•You could spend one-third of your life in retirement.•To maintain your standard of living in retirement, you will likely need an annual income equal to about 80% of your final working income.
Estimate your life expectancyEstimate your life expectancy
Source: National Vital Statistics Report, Vol. 58, No. 21, June 28, 2010
Current Age Men Women
25 76.5 81.1
35 77.2 81.4
45 78.1 82.0
55 79.7 83.0
65 82.0 84.7
75 85.4 87.3
85 90.7 91.8
Will you have money for “must-haves?”
Healthcare • Housing • Food • Transportation
Personal Retirement Savings
NC Retirement System
Social Security
Traditional Retirement Benefits
Gallagher Benefit Services, Inc.
“Three Legged Stool”
When Does Social Security Begin?
If You Were Born… Full Benefit Begins Reduced Benefit Begins
Before 1938 Age 65 Age 62
Between 1939-1959 Between Age 65 and 67* Age 62
In 1960 or later Age 67 Age 62
Social Security Benefits
“The average monthly Social Security benefit for a retired worker is about $1,177 in 2011.”
Source: www.socialsecurity.gov
* The full retirement ages for this group change based on the specific year of birth. For more information, visit the Social Security Administration at www.ssa.gov
$0.51 $0.69 $0.99 $1.41 $1.50 $1.98 $2.79 $3.94
$7,200 $11,420 $15,047 $19,054 $20,411 $26,877 $37,913 $53,480
What will costs be in the future?
Inflation can zap the power of your retirement savings. So you may need more than you thought.
For illustration purposes only. Assumes a 3.5% annual inflation rate.
1980 1990 2000 2010 2012 2020 2030 2040
Annual Benefits Statement
How confident are you in providing for your retirement?
“A penny saved is a penny earned.” - Ben Franklin
Improve Your Retirement Possibilities with the NC 401(k) & NC 457 Plans
Start saving NOW with the NC 401(k) & the NC 457 Plans
Don’t forget to increase your savings as you age
Contributions to NC 401(k)/457 Plans
• Made by payroll deduction
• No minimum contribution
• Maximum is $23,000 if you’re 50 or older in 2013 ($17,500 if you’re younger than 50)
• Change your contribution anytime– You don’t have to meet with a representative!
– website, toll-free customer service center or forms
Contributions to NC 401(k) & NC 457…
• Tax Advantages– Pre-tax contributions offered in either plan may be best if you:
• Have a short time horizon until you need to take withdrawals
• Need a tax break this tax year
• May be in a lower tax bracket in retirement
– Roth after-tax contributions to the NC 401(k) may be best if you:
• Have a longer time horizon until you need to take withdrawals
• Want a tax-free source of income in retirement
• May be in the same or higher tax bracket in retirement
• Rollover funds into your account – May roll funds from former employer retirement plans and some IRA’s
– Can be done regardless of employment status
– Requires pre-approval from Prudential
Put asset allocation into action!
You have two options:
1.Do it yourself
2.Get help withGoalmaker
13
Do it yourself
Stock FundsLarge-CapNorth Carolina Large Cap Value FundNorth Carolina Large Cap Index Fund North Carolina Large Cap Growth Fund
Small-Mid CapNorth Carolina Small/Mid Cap Value FundNorth Carolina Small/Mid Cap Index FundNorth Carolina Small/Mid Growth Cap Fund
InternationalNorth Carolina Global Equity FundNorth Carolina International Index FundNorth Carolina International Fund
Stable ValueNC Stable Value Fund
Fixed IncomeNorth Carolina Fixed Income FundNorth Carolina Fixed Income Index Fund
All investing involves risk, such as fixed income (interest rate), default, small cap, international and sector risks—including the possible loss of principal.
The GoalMaker asset allocation models available in your plan have been determined by [insert advisor firm name here].
You may want to consider other assets, income, and investments you may have before applying these models to your individual situation. Consult the prospectus for information about how the portfolio manager invests the assets of any particular investment option. Proposed allocations assume a retirement withdrawal period of 15 years. Past performance of investments or asset classes does not guarantee future results.
Introducing GoalMaker®
GoalMaker Portfolio: C04
Conservative, 16+ Years to Withdrawal
The Benefit of Rebalancing with GoalMaker
• Automatic
• Fixed date every quarter
• Maintains your original investment ratios
• No transaction or asset management fees!
What if You Need the Money?
NC 401(k) Plan• Loan Provision• Hardship Withdrawal
allowed for: – Down payment on a home
– College expenses
– Prevent eviction/foreclosure
– Medical expenses not covered by insurance
– Funeral expenses
– Damage to your home that qualifies as a casualty deduction
• Or, at age 59 ½
NC 457 Plan• Loan Provision• Hardship Withdrawal
allowed for:• Prevent eviction/foreclosure
• Medical expenses not covered by insurance
• Funeral expenses
• Damage to your home that qualifies as a casualty deduction
• Or, at age 70 ½
One-Time Contribution Change Form
• Contribute a portion of large payments to your account on a one-time basis.
• Visit www.NCPlans.prudential.com for a form, or contact your Human Resources or Regional Retirement Education Manager.
When You Leave Your Job…
1) Do nothing! Keep your funds in the Plan
2) Rollover to an IRA or a new employer’s program
• If you remain a NC public employee, you may continue contributing through your next employer!
3) Begin withdrawals:
• Installment payments (monthly, quarterly, semi-annual or annually)
• Partial withdrawal (on an as-needed basis)
• Lump sum withdrawal
• Annuitize all or a portion of your account balance
Tax Penalties At Withdrawal (Pre-tax Balances)
•NC 401(k) PlanNO IRS 10% early withdrawal penalty if you:• Have reached age 59 ½ • Leave employment during or after the year you turn 55• At any age, elect to receive equal payments based upon life
expectancy• Elect the Transfer Benefit and move all or part of your
account to TSERS or LGERS• Retire due to disability• Die, and the funds are distributed to your beneficiary
•NC 457 Plan• Never incur an IRS 10% early withdrawal penalty on
withdrawals
Taxes At Withdrawal (Roth Balances)
NO state or federal income taxes on withdrawals if first Roth contribution remains in the account for 5 tax years and:
• You have reached age 59 ½, or
• You retire due to disability, or
• Your account distribution is made to your beneficiary(ies) upon your death
NC 401(k) and NC 457 Plans – A Low Cost Option for Retirement Savings
Unlike other savings vehicles, your NC Supplemental Retirement Plans do not charge:
• Surrender charges or distribution fees
• Transfer Fees Among Funds
• Annual Account Charges (AAC)
• Up-front sales charges
Optional NC 401(k) / NC 457 Deferred Transfer Benefit
• Available to retiring members with existing NC 401(k) and/or NC Deferred Compensation (457) accounts through Prudential Retirement
• Option to transfer all or a portion of supplemental funds to the Retirement System
• Members who transfer will receive additional separate monthly lifetime benefits based on the amount of transferred funds
• Law enforcement officers vested by June 30, 2010 have the option to transfer funds under this new program or transfer funds under previously established plan specifically for law enforcement officers
• Information on the transfer credit was provided to Prudential Retirement by the State of North Carolina
Are These Plans Right for You? Consider…
Do I need to start or increase my retirement savings?
Would I benefit from a tax-free source of income in retirement?
Consider the NC 401(k) Roth after-tax option if you have at least 5 years before withdrawal
Do I need a tax break now?
Think about a pre-tax contribution to the NC 401(k)
www.NCPlans.Prudential.com
Once enrolled, log on to your account to add beneficiary designations & to manage your account details
Help is Available
Regional Retirement Education Managers
•Free, local resource for your retirement plan questions
•18 dedicated representatives across North Carolina
•Salaried, not commissioned
•Meet by phone, email or in person for help with enrollment, rollovers, investment review or other retirement plan questions
•Find your regional manager online at www.NCPlans.prudential.com
Additional Resources
NC Retirement Systems Member Services Unit•1-877-627-3287 (outside Raleigh area) and (919) 807-3050 (Raleigh area only) •www.myncretirement.com
Social Security•www.ssa.gov
Internal Revenue Service• www.irs.gov• www.dornc.com
“Transfer Benefit” Distribution option• www.NCLifetimeIncome.org
You Only Get One Retirement -Make It A Good One!
Questions? Comments?
Shares are offered by Prudential Investment Management Services LLC (PIMS), Three Gateway Center, 14th Floor, Newark, NJ 07102-4077. PIMS is a Prudential Financial company. Prudential Retirement is a Prudential Financial business. Prudential is not a legal or tax advisor.
NC Supplemental Retirement PlansP.O. Box 5340
Scranton PA 18505
1-866-NCPlans(1-866-627-5267)
www.NCPlans.Prudential.com
Account Tools:
Enroll Today
Enroll in the Plan
• Complete the form.
• Visit www.NCPlans.Prudential.com.
•Call the Interactive Voice Response System (IVR) at 1-866-NCPlans, or speak with a Participant Service representative.
Choose your investment options.
Seek guidance as needed.
Monitor your plan carefully, but revise it only as required.
• View your account online.