The Naked Truth about Retirement

“What you need to know about Retirement”

presented by members of the JCCC Retirees Association

Welcome byAlan Swarts, JCCCRA President

Financial vs. Psychological Concerns

This presentation is available online at www.slideshare.net/jbacon

The Financial

The Facts

• 77 million Baby Boomers in USA(born between 1946-1964)

• 10,000 Boomers retire every year(anticipated through 2030)

• 7 Boomers turn 65 every minute

• 59% of Boomer parents are supporting adult children ages 18-39)

• Many Boomers work past 65

• 60% of retired workers forced to leave workforce early (layoffs, medical reasons, )

The Facts (continued)

• Many Boomers not well prepared for retirement

• Median 401-K balance $177,805 (ages 55-64)

• $177K balance generates $7,112 annually based on 4% rule during retirement

• TransAmerica's 2015 survey found workers in early 60s had average 401K/403B savings of $172,000

• Coupled with social security, not sufficient to maintain desired lifestyle

• 45% of Boomers have no retirement savings

• Thank goodness for KPERS!

A few More Helpful Facts

• Plan for retirement and consider the tax impact!

• KPERS retirement benefits not taxable on Kansas return, but are on your Federal Income Tax return

• Retire to another state? KPERS payments may be taxableon both State and Federal returns

• Social Security payments, regardless of filing status, with Federal AGI* of $75K or less are not taxable

• RMD** from TIAA or other 403B or 401K is taxable on both State and Federal returns

• First RMD required by April of year after you turn 70 ½

* Adjusted Gross Income ** Required Minimum Distribution

Bottom Line (Financially)

• Retirement Income Calculator -https://goo.gl/JMMBHH (investments, securities, social security, etc)

• AIER* Retirement Withdrawal Calculator -https://goo.gl/Bcvcc4 (based on 4% rule)

• Kansas Public Employees Retirement System (KPERS) Calculators - www.kpers.org

– See Calculators on top menu bar and select KPERS 1, 2 or 3

*American Institute for Economic Research

The Psychological

“Everyone says you’ve got to get ready financially. No, no. You’ve got to get ready psychologically.” - Lee Iacocca

Phase 1:Vacation Time

The Excitement of Phase 1

• Sense of relief, excitement, and accomplishment, completed your work career…and got out alive!

• No set routine, freedom from schedules!

• Making travel plans

• Plan a “trophy” purchase: sports car, vacation home, new golf clubs, new fishing rod

• More time with your spouse or partner

• More time puttering around at home or doing nothing!

Phase 2:Feeling Loss

& Feeling Lost

The Losses of Phase 2

• Loss of structure. You miss the old routine

• Loss of identity. You’re no longer recognized as a great staff member, administrator, or professor

• Loss of relationships. No longer part of a team, and you miss the friendships. JCCCRA is a solution!

• Loss of purpose. Nothing to look forward to

• Loss of power. No longer the team leader, supervisor, problem-solver; just another person on the street

• Spending too much time with spouse/partner

• You’re bored, tired, nothing exciting to do

Phase 3:Trial and Error

The Reevaluation of Phase 3

• Start asking, “How can I still contribute?” “What’s the meaning of my life now?”

• Actively explore options that will allow you to make contributions and to feel good about your efforts

• Commit to an experiment; a venture, project, new career (part-time job), volunteer effort, political or social cause

• If the effort fails, back to the drawing board; re-consider your skills, strengths and interests and try again

Phase 4:Reinvent and Repurpose

What Phase 4 Looks Like

You have:

• Combined your strengths, passions, and your desire to make a difference to identify a new life venture; new career, volunteer work, support for a cause

• Taken action to put your plans and dreams in motion to create:

– a new structure for your life

– a new identity, connected to your passion

– new relationships

– renewed purpose

– a sense of enhanced power to make good things happen for you and for others

We’re All on Different Paths

“There’s a Harvard Study , a longitudinal study done over a 20-year period that interviewed over 15,000 retirees. One of their key findings was, “The unhappiest retirees had not gone on to do anything productive beyond pleasing themselves.” It was all about them, all the time: Phase One for sure.”

~Riley Moynes

“My experience is that it (Phase Four) almost always involves some level of service to others.”

Riley Moynes from The Four Phases of Retirement: What to Expect When You're Retiring

• Not sequential• May be revisited• May be simultaneous

Sources• Motley Fool - https://goo.gl/Bypfa8

• The Four Phases of Retirement: What to Expect When You're Retiring by Riley Moynes. Coach Press. Kindle Edition.

• The 4% Rule -https://goo.gl/yAvhwL

• FAQ Kansas Taxes -https://goo.gl/u13tpT

This presentation available online at www.slideshare.net/jbacon

Alan Swarts (Moderator), Jonathan Bacon, Debby Hassur, John Head, Joan McCrillis, and Phil Wegman

Which expenses increased and decreased when you retired?

What was the smartest thing you did to prepare

for retirement?

What was the dumbest thing you did (or didn’t do) in planning for retirement?

What financial or non-financial aspect of retirement surprised you the most?

If you could change one thing about your retirement, what would that be?

Do you believe you retired too early, too

late or just right? Why?

What advice would you give a colleague preparing to retire?