Retirement Presentation��Liz Keating�October 2021

Topics

• Why should you save
• What are some ways to save
• Campus Child Care’s Retirement Plan
• Potential Opportunities
• SFP Wealth

Illustrative Example

• Joining CCC at age 30
• Working until 65
• Living until 80
• At time of retirement, earning $54,000 after taxes (in net pay), that is $4,500 monthly
• 4.5% investment return

Note: Your individual situation will vary!

Illustrative Example

• Joining CCC at age 30
• Working until 65
• Living until 80
• At time of retirement, earning $54,000 after taxes (in net pay), that is $4,500 monthly
• 4.5% investment return

Note: Your individual situation will vary!

Income

Living Expenses

≈

Income

Living Expenses

≈

• Salary

Income

Living Expenses

≈

• Salary

$4,500 a month

Living Expenses

≈

???

Income Eeplacement

Retirement �Income

Retirement �Income

Living Expenses

≈

• Social Security
• Personal Savings
• Retirement Savings
• Employee
• Employer

​

$4,500

Retirement �Income

Living Expenses

≈

**Assuming joining CCC at age 30, working until 65, a 4.5% investment return, and living until 80

• Social Security
• Personal Savings
• Retirement Savings
• Employee
• Employer

~$900

​

~$1,500

Retirement �Income

Living Expenses

≈

**Assuming joining CCC at age 30, working until 65, a 4.5% investment return, and living until 80

• Social Security
• Personal Savings
• Retirement Savings
• Employee
• Employer

~$900

​

~$1,500

Living Expenses

≈

​

$2,100

Retirement �Income

• Social Security
• Personal Savings
• Retirement Savings
• Employee
• Employer

Personal Savings

• Advantages: Easy Access, Flexibility
• Disadvantages: Easy Access, Flexibility, Potentially Low Return
• Where?
• Checking
• Money market or Savings
• Brokerage Account

​

Personal Savings

• Advantages: Easy Access, Flexibility
• Disadvantages: Easy Access, Flexibility, Potentially Low Return
• Where?
• Checking
• Money market or Savings
• Brokerage Account

​

Personal Savings

• Advantages: Easy Access, Flexibility
• Disadvantages: Easy Access, Flexibility, Potentially Low Return
• Where?
• Checking
• Money Market or Savings
• Brokerage Account

​

Personal Savings

• Advantages: Easy Access, Flexibility
• Disadvantages: Easy Access, Flexibility, Potentially Low Return
• Where?
• Checking (0.0%)
• Money Market or Savings (0.5%)
• Brokerage Account (4-5%)

​

Personal Savings

To reach a $2,100 monthly payout by age 65 using fixed $ amount

• Checking account $404 per paycheck
• Savings account save $285 per paycheck
• Brokerage account save $136-$160 per paycheck

**Assuming joining CCC at age 30, working until 65, and living until 80

Personal Savings

To reach a $2,100 monthly payout by age 65 using fixed $ amount

• Checking account $404 per paycheck
• Savings account save $285 per paycheck
• Brokerage account save $136-$160 per paycheck

**Assuming joining CCC at age 30, working until 65, and living until 80

Personal Savings

To reach a $2,100 monthly payout by age 65 using fixed $ amount

• Checking account $404 per paycheck
• Savings account $361 per paycheck
• Brokerage account save $136-$160 per paycheck

**Assuming joining CCC at age 30, working until 65, and living until 80

Personal Savings

To reach a $2,100 monthly payout by age 65 using fixed $ amount

• Checking account $404 per paycheck
• Savings account $361 per paycheck
• Brokerage account??

Problem – you need to move $ periodically in a brokerage account and make investments

​

**Assuming joining CCC at age 30, working until 65, and living until 80

Retirement Plan�October 2021

Retirement Plan�October 2021

403(b) Defined Contribution Plan

• CCC commits to contributions
• Each employee has an individual account at TIAA
• Each employee may voluntarily make contributions through payroll deductions
• Employee chooses from a range of offered investments
• Regulated under ERISA law
• Annually audited by our auditors

Employer Contributions

• Profit sharing plan rather than a matching plan
• Each year need to work 1,000 hours and be employed on 12/31 to get $
• Contribution made in one payment in late January or February the following year
• Contributions are subject to vesting. Need to be employed for CCC for three years to keep the funds contributed

Employee �Contributions

• Contributions made via payroll deductions based on a salary reduction agreement.
• You can change it anytime.
• Max:
• $19,500 under 50
• $26,000 if older
• 75% of pay

​

Accessing Your Account

TIAA Mobile App

LOGIN at: https://www.tiaa.org/

​

To create account, click on Need online access? under the LOGIN button.

​

You will need to provide your Social Security Number and Date of Birth to create an account.

TIAA Online

800-842-2252 

TIAA Customer Service

Note: To change your contribution, complete a new salary reduction agreement and provide to CCC Central Office

Accessing Your Account

TIAA Mobile App

LOGIN at: https://www.tiaa.org/

​

To create account, click on Need online access? under the LOGIN button.

​

You will need to provide your Social Security Number and Date of Birth to create an account.

TIAA Online

800-842-2252

TIAA Customer Service

Note: To change your contribution, complete a new salary reduction agreement and provide to CCC Central Office

Accessing Your Account

TIAA Mobile App

LOGIN at: https://www.tiaa.org/

​

To create account, click on Need online access? under the LOGIN button.

​

You will need to provide your Social Security Number and Date of Birth to create an account.

TIAA Online

800-842-2252

TIAA Customer Service

Note: To change your contribution, complete a new salary reduction agreement and provide to CCC Central Office

Accessing Your Account

TIAA Mobile App

LOGIN at: https://www.tiaa.org/

​

To create account, click on Need online access? under the LOGIN button.

​

You will need to provide your Social Security Number and Date of Birth to create an account.

TIAA Online

800-842-2252

TIAA Customer Service

Note: To change your contribution, complete a new salary reduction agreement and provide to CCC Central Office

Investments

• CCC’s Retirement Plan > $4M in assets
• TIAA offers mutual funds in several categories:
• Target-dated “Lifecycle” Funds
• Bonds/Fixed Income
• Stock/Equity
• Social Choice
• Real Estate
• All mutual funds hold numerous investments

Default Investment: Lifecycle Fund

**An employee can change the investments – both how the current portfolio is invested and how new contributions are allocated

Two Contribution Methods

• Traditional (Tax-deferred)
• Contributions are not taxed when contributed
• All funds leaving the account are taxed on withdrawal
• Required Minimum Distributions
• Roth (After-tax)
• Contributions are taxed when contributed
• No taxes when funds are withdrawn (so the investment return is never taxed!)
• Retiree can control timing of distributions

Retirement Savings

To reach a $2,100 monthly payout by age 65

Fixed $ approach:

• Savings account $361 per paycheck
• Traditional Retirement account $188 per paycheck and save $810 a year in taxes

Roth Retirement account -- while you are working

Starting at 25 $102 per paycheck

• Starting at 35 $217 per paycheck

​

**Assuming joining CCC at age 30, working until 65, living until 80

Retirement Savings

To reach a $2,100 monthly payout by age 65

Fixed $ approach:

• Savings account $361 per paycheck
• Traditional Retirement account $188 per paycheck and save $810 a year in taxes

Roth Retirement account -- while working

Starting at 25 $102 per paycheck

• Starting at 35 $217 per paycheck

​

**Assuming joining CCC at age 30, working until 65, living until 80

Retirement Savings

To reach a $2,100 monthly payout by age 65

Fixed $ approach:

• Savings account $361 per paycheck
• Traditional Retirement account $188 per paycheck and save $810 a year in taxes
• Roth Retirement account $156 per paycheck
• Starting at 25 $102 per paycheck
• Starting at 35 $217 per paycheck

​

**Assuming joining CCC at age 30, working until 65, living until 80

Retirement Savings

To reach a $2,100 monthly payout by age 65

Fixed $ approach:

• Savings account $361 per paycheck
• Traditional Retirement account $188 per paycheck and save $810 a year in taxes
• Roth Retirement account $156 per paycheck
• Starting at 25 $102 per paycheck
• Starting at 35 $217 per paycheck

​

**Assuming joining CCC at age 30, working until 65, living until 80

Defined Benefit vs. Defined Contribution

• Social Security is a defined benefit plan: Benefits continue as long as you live
• 403(b) is a defined contribution plan: Benefits stop when the funds in the account are gone
• What if life expectancy is longer?
• Age 80: Roth Retirement account $156 per paycheck
• Age 81: Roth Retirement account $166 per paycheck

​

​

**Assuming joining CCC at age 30, working until 65

Ways to Boost Savings

To reach a $2,100 monthly payout by age 65

• Fixed $ approach: Roth: $156 per paycheck(vs94
• Fixed % Method: Roth: 7.4% gross pay

starts $117 grow to $271 ppc

• “Build-up” % Method: Roth: start at 3% of gross pay

add 1% per year to get to 8%

starts $46 grow to $292 ppc

​

​

**Assuming joining CCC at age 30, working until 65, living until 80, starting pay $40K, raises 2.5% per year

Ways to Boost Savings

To reach a $2,100 monthly payout by age 65

• Fixed $ approach: Roth: $156 per paycheck (vs94
• Fixed % Method: Roth: 7.4% gross pay

starts $117 grow to $271 ppc

• “Build-up” % Method: Roth: start at 3% of gross pay

add 1% per year to get to 8%

starts $46 grow to $292 ppc

​

​

**Assuming joining CCC at age 30, working until 65, living until 80, starting pay $40K, raises 2.5% per year

Ways to Boost Savings

To reach a $2,100 monthly payout by age 65

• Fixed $ approach: Roth: $156 per paycheck(vs94
• Fixed % Method: Roth: 7.4% gross pay

starts $117 grow to $271 ppc

• “Ramp-up” % Method: Roth: start at 3% of gross pay

add 1% per year to get to 8%

starts $46 grow to $292 ppc

​

​

**Assuming joining CCC at age 30, working until 65, living until 80, starting pay $40K, raises 2.5% per year

Key Takeaways

• The sooner you start saving, the greater the assets
• Investing in high-quality mutual funds yield long-term higher rates of return, building assets faster
• Retirement accounts also build assets faster due to the tax advantages
• Note: Retirement accounts, however, are less flexible, tax consequences for early withdrawal
• % Method grows your contributions with your pay (and takes a % of bonuses and extra pay)
• “Ramp-up” % Method adjusting once a year (work week), can ease you into the % you for the long term (it too takes a % of bonuses and extra pay)
• Consult a financial advisor, such as SFP Wealth.

Your circumstances will vary from this video!

​

Other Opportunities

• Annual TIAA Investment Review
• Performance, Growth, Asset Allocation
• Can change new contributions & existing assets
• Roll-In Retirement Funds
• From other TIAA accounts, prior employers or IRAs
• Best to send $ direct from one institution to another
• Beneficiary
• Marital status, legal name and address
• Loans

After Campus Child Care

• Keep Account at TIAA
• Keep legal name, marital status, address and beneficiaries up-to-date
• Will receive annual notices from TIAA and CCC
• Or Roll-out to Another Retirement Account
• Request after last pay check
• To avoid tax penalties, have $ sent directly to new retirement account
• Retirement
• Traditional has required minimum distributions start at age 70 1/2 (COVID starting age deferred to 72)
• Roth distributions are at your discretion
• Contact TIAA Customer Service at (800) 842-2252

Services from 1-on-1 consultations to financial planning

Retirement Presentation��Liz Keating

finance@campus-cc.org�October 2021

Retirement Presentation��Liz Keating

finance@campus-cc.org�October 2021