Your Ticket to Retirement

Transcription

1 Spring 2016 The Wayne County Employees Retirement System provides retirement services for active, deferred, and retired employees of Wayne County, The Wayne County Airport Authority, and the Wayne County 3rd Circuit Court WAYNE COUNTY EMPLOYEES RETIREMENT SYSTEM Photo credit : Vito Palmisano Wayne County Airport Authority Your Ticket to Retirement Letter from the Executive Director Everyone here at WCERS is eagerly anticipating all of the new and exciting things coming to Downtown Detroit. The modern street car line, recently named the QLine, is currently under construction and set to be completed by the end of the year. In addition, the $650 million dollar, 18,000-seat Little Caesars Arena is also underway. The QLine will run along Woodward Avenue and will travel on a 6.6-mile loop from Congress Street to West Grand Blvd. The arena will be located at I-75 and Woodward, and will create approximately 8,300 new jobs and pump about $1 billion into Michigan s economy. Having an accessible transit system tied into a central entertainment and sports district is another positive step for the city. Although we are witnessing the transformation of Detroit through the QLine and the construction of the arena, and are excited for all its promise, to get to this point we all had to face the challenges of rerouted traffic and unexpected delays, and will continue to do so until these projects are completed. I remember those early days of the construction with being filled with frustration and exasperation. However, as time has passed, I have incorporated the detours and increased travel time into my daily schedule, and have accepted the fact that this is what we need to endure to get to the final result. I even witnessed the City and the Tigers enjoy a successful Opening Day despite sidewalks being closed and major traffic gridlocks. Relatively speaking, these minor inconveniences have now become part of our regular business day. As we draw closer to the completion of the QLine and Little Caesars Arena, I sit in amazement at the level of planning that has contributed to these successes. These were not merely year-long projects, but a process that involved decades of planning and an incredible vision. Not the vision of one man, but the collaboration of many. I am proud to be part of this time in Detroit history. This growth is symbolic of our hopes for you at WCERS - a vision for retirement, complemented by education, planning, and the collaboration of many. We understand that retirement planning is a process, and always a work in progress. (Continued on page 2) Inside this issue: START PLANNING NOW 2 NATIONAL EMPLOYEE BENEFITS DAY 3 DEFINED CONTRIBUTION 4 DEFERRED COMPENSATION 5 CHAIRWOMAN S CORNER 6 WCERS 28 West Adams Ave. Detroit, MI Phone (313) Fax (313)

2 As an employee of who WCERS serves, you re required to be in a retirement plan, either the Defined Contribution Plan or the Defined Benefit Hybrid plans, which means you re already on your way. But just being in a plan and doing the minimum may not be enough, so WCERS has some suggestions to help you realize your vision for retirement. Shouldn t one plan be enough? Start Planning Now Just as one stadium and one theatre doesn t constitute a central entertainment and sports district, one employer sponsored plan may not be enough for an individual s retirement plan. With the adequacy of Social Security benefits declining, it s not possible to know how much you can truly depend on that extra income in retirement. For that reason, it is essential that you do everything you can to prepare for retirement. On page 3 we have outlined different options available for you to save even more. I m still young with lots of expenses. I will start thinking about retirement later. Don t wait; the time to start thinking about retirement is right now. The transformation we re seeing downtown didn t happen overnight. It took years, and began with small investments made decades ago. The same can be said for people with successful retirements. They probably started early, and started small. If you re young, time is on your side make the most of it. WCERS can help you understand why you should start saving now. Below we have an example of the Time Value of Money, and how starting now can have a significant impact on your future retirement goals. I m nearing retirement age and I haven t done any extra saving for retirement. Yes, starting early can make retirement planning easier, but don t worry. It s better to be late than never. WCERS will assist you in finding a plan for retirement savings options that can work for you. Time Value of Money Time Value of Money is the principle that money available at the present time is worth more than the same amount of money in the future. WCERS goal is to use this principle to demonstrate why it is essential to start saving and planning for retirement now rather than later. The key to the principle of the time value of money is interest, and the potential earning capacity of a dollar today, over time. By putting off your savings for even just a year, you could be forfeiting thousands of dollars of accumulated interest for your future retirement. Don t do it. Start your savings today. In the example, assume that you invested $1,000 for retirement today. At a 7% compounding interest rate in 10 years you won t just have $1,000, you will have $1,967.15, almost double your original investment. And the money you invest today will continue earning you money even after those 10 years. But if you wait just three-years to start investing, you would miss out on $ of interest. Now, that may not seem like much, but this is without adding any other money and for just 10-years. The more you invest, the more interest you can accumulate. Just imagine how much you could accumulate over 30+ years, while also consistently contributing more money every year. Page 2 Retirement Savings TODAY 3 YEARS 6 YEARS 10 YEARS Option A begin today $1,000 $1, $1, $1, Option B wait three-years $0... $1,000. $1, $1,605.78

3 National Employee Benefits Day April 4, 2016 was National Employee Benefits Day. The day is celebrated annually and coincides with the establishment of the International Foundation of Employee Benefit Plans. The Wayne County Employees Retirement System (WCERS) choose to focus on retirement savings and sent out the ecommunication below: Today is National Employee Benefits Day. One important employee benefit is retirement. Are you preparing for retirement? Have you thought about what you want to do during retirement and how to achieve it? Saving for retirement is like a marathon not a sprint. What comes first; the retirement dream or the retirement savings? Many people don t know where to start when it comes to retirement. The good news at Wayne County is that you are required to be in a retirement plan, but are you saving enough? Do you have a retirement goal? If you don t have a specific goal, click here for a worksheet that gives you some hints on retirement. Next let s talk about your budget. Do you have a monthly budget; a plan of how to reduce your debt before you retire and set yourself up for the retirement goals we mentioned earlier? This worksheet gives you a start. By completing the worksheet you can get a good idea of how much you spend every month. Did you know that during retirement the average person spends about 80% of what they did while working? Where will the 20% cuts come from on the budget sheet you just completed? Is it reasonable? If you have retirement dreams, you will also need to consider how much those items will cost you in the future. Start saving early and make it easy by using one of the providers below we will set up the deduction through your payroll. What options do I have to save more? After Tax- You can save more through Prudential, our Defined Contribution partner. More information can be found on the Defined Contribution plan at To set up an account at Prudential please contact the retirement office at (313) Or if you already have an account set up at Prudential you can increase your contribution by completing a defined contribution change request form and returning it to the retirement office via fax at (313) or mail. Before Tax You can also save more through one of our Deferred Compensation Providers (457). More information on AXA Equitable, MassMutual, and VOYA can be found on our website at or at Compensation.html. If you need to set up an account, select a provider and contact them. They will set up a date and time to come out and meet with you. They will review all of the details and help you complete the necessary paperwork. If you would like to increase your contribution please complete a deferred compensation change request form and return to our office via fax at (313) or mail. Comparison between before-tax and after-tax contributions : Before Tax $ After Tax $ % contribution -$ % Taxes -$ $ $ % Taxes -$ % Contribution -$80.00 Take home pay $ Take Home Pay $ The example above gives you the same take home pay and shows you how you can save more without changing much. By doing the before tax option you save $20.00 more than with the after tax option. As always, you still have to pay taxes. With the examples above, the difference is when, now as you earn it or later when you take it out. Taxes will also be owed on the returns earned throughout the life of the investment. Retirement Planning seems like a difficult task, just take it one step at a time and let us know if there is something we can do to help (313) Page 3

4 Wayne County Defined Contribution Plan News (Plan 4 & 5) WCERS oversees the operation of the Defined Contribution plans. These plans are supported by UBS Financial Services, Inc., our plan consultant, and Prudential Retirement, our plan record keeper. UBS Financial Services, Inc. (888) One of the advantages of being enrolled in the Wayne County Defined Contribution plan is the access you have to financial professionals at UBS who work directly with WCERS, your plan, and most importantly YOU. UBS is responsible for conducting employee-focused oneon-one meetings at locations throughout the County several times each month. These meetings are announced ahead of time and participants are encouraged to make an appointment. During your one-on-one meeting UBS financial services professionals will provide you with investment education and guidance, initial retirement planning, answer general questions about your retirement plan and help you with any other concerns you have about saving for retirement. There are no charges for these meetings and UBS will never try to sell you anything. Not able to attend a meeting? UBS financial services professionals are also available to help you over the phone. This is an important benefit that your plan provides so take advantage today. One-on-One Meetings UBS is scheduled to visit the following locations in the coming months 400 Monroe 500 Griswold CAYMC WCAA Central Maintenance Yard Frank Murphy Hall of Justice Wayne Health Department Lincoln Hall of Justice Penobscot Building Waste Water Treatment To make an appointment at one of these locations, or to have a phone consultation, please contact the Sterling Institutional Group of UBS Financial Services, Inc. (888) Prudential Retirement Naming or Updating Your Beneficiary WCERS is excited to announce a new change expected to launch May 23, With this new change, you will be able to paperlessly name or update your beneficiary! To do so, go to Prudential s Online Retirement Center, or call Prudential Retirement directly and speak to a representative from 8 a.m. to 9 p.m. EST, Monday through Friday. Joining your workplace retirement plan is a great step in helping to achieve your retirement goals, but did you know that the enrollment process includes naming a beneficiary? If you have not named a beneficiary, this is a good time to do so. You will also want to review it from time to time to make sure all information is accurate and up to date. ONLINE Use either: OR BY PHONE 1. Call Say Beneficiary 3. Enter Social Security and PIN numbers Page 4

5 Deferred Compensation Plan News (457) WCERS oversees the operation of the Voluntary Supplemental Deferred Compensation plans for Wayne County, Wayne County Airport Authority, and the Wayne County 3rd Circuit Court. These plans are supported by AXA Equitable, MassMutual, and Voya. More years, more money The Cost of Waiting The good news is, odds are, you ll probably live longer than past generations. The bad news is, living longer means you ll need more money for retirement possibly up to 30-years worth. Whatever your retirement dream is whether its traveling the world, playing golf or just relaxing and enjoying the grandkids the last thing you want to worry about is outliving your money. A good rule of thumb is to save enough money to make sure you live the way you ve always lived. You can t expect to spend less on living expenses in your Golden Years than you do today. Most financial advisors agree that you ll need percent or more of your pre-retirement income to maintain your lifestyle in retirement. Also, keep in mind that the cost of retirement living continues to increase as the cost of healthcare, housing, energy, and other costs increase. And don't underestimate the power of inflation. While your expenses may at best remain the same, or even increase, you can t expect the same for your income. That s why every day that goes by in which you don't save is another dollar you likely won t have in retirement. Save now, pay later One of the best and simplest ways to begin saving is to take advantage of your employer sponsored 457 Deferred Compensation plan. And if you re worried about whether you can afford it, keep in mind that such plans can save you money today. Here s how: Less tax today Contributions to your plan are made prior to income tax deductions, which means you re paying less in current taxes from each paycheck. Less tax tomorrow Your account grows tax deferred, meaning you won t pay taxes on it until you withdraw funds from the plan. Since you ll most likely be in a lower tax bracket at that time, you ll pay less in taxes than you would today. (Note: Penalties will apply to early withdrawals usually before age 59 1/2, unless an IRS exemption applies ) Your money is your money-maker When you invest in fixed credited Interest rate accounts, you earn interest on your money. And then that interest earns interest. That s called compound interest, and it s how your account grows over time. The sooner you start, the more you can save. AXA-Equitable MassMutual Voya (800) (877) (800) Courtesy of Voya Page 5

6 Chairwoman s Corner Tina Turner I recently attended a Pre-Retirement session that WCERS began offering twice annually in The topics of discussion were mainly Social Security, Medicare, and how to make these benefits work best for you in retirement. I m happy to announce that it was a huge success, and that I received wonderful feedback from attendees. Many have said they learned a lot of new information and were given many new resources that would help them as they neared retirement. I would like to acknowledge all of the staff at WCERS for a job well done and for making this event possible. I would also like to acknowledge all of you who came out, asked great questions, and gained a wealth of information about your retirement plans, Social Security, Medicare, and more. I would encourage all of you who did not attend to make time to go to one of these events, because I really believe it will be beneficial to you. There will be another session in the fall so watch for a communication from WCERS. The Retirement staff have done an excellent job in providing resources for you to get the most out of your retirement planning, and they are in the process of developing a program designed for mid-career employees. I encourage you to come out and take advantage of what we have to offer. Be on the lookout for an from WCERS for details about future sessions. If you have any questions or any specific topic you would like covered at the sessions, feel free to submit your questions/topics to Retirement staff member Sharron Seaton at sseaton@waynecounty.com. WAYNE COUNTY RETIREMENT COMMISSION EMPLOYEE MEMBERS Tina Turner, Chair Denis Martin Henry Wilson Francesco Simone RETIREE MEMBERS Elizabeth Misuraca Hugh S. Macdonald EX-OFFICIO MEMBERS Warren C. Evans Wayne County Executive Tony Saunders Designated Representative CHAIRPERSON WAYNE COUNTY COMMISSION Gary Woronchak About The Wayne County Employees Retirement System The Wayne County Employees Retirement System was created under the authority of Act. No. 156 of the Public Acts of 1851, as amended, by Act 249 of the Public Acts of The Board of Supervisors adopted an ordinance on August 8, 1944, establishing the Wayne County Employees Retirement System to become effective on December 01, The Wayne County Employees Retirement System was continued under the Wayne County Charter, approved by the voters on November 3, Since its inception the Wayne County Employees Retirement System has provided retirement and related benefits for thousands of Wayne County public employees Today the System serves nearly 10,000 active and retired members. For general retirement plan questions and information, please call WCERS: (313) For investment questions or to schedule one-on-one meetings, please call UBS: (888) For questions regarding your account (loans, making changes, etc.), please call Prudential: (877) Page 6 EDITOR: KELLY TAPPER CONTENT: SHARRON SEATON