Tax Smart Financial Strategies for Our Employees

Transcription

1 Tax Smart Financial Strategies for Our Employees { Provided by: Riverview School District Presented by: Kades-Margolis Corporation

2 Your 403(b) Tax-Sheltered Account Program { Provided by: Riverview School District Presented by: Kades-Margolis Corporation

3 What is a 403(b)? 403(b)s are also known as TSAs, or tax-sheltered accounts TSAs are voluntary, long-term retirement savings plans that allow school employees to set aside money on a taxdeferred basis for retirement Permitted for ALL of our school employees under Section 403(b) of the Internal Revenue Code Withdrawals with no IRS penalty if age 55 or older upon separation from service In-Service withdrawals permitted at age 59 ½

4 Why take advantage of a 403(b) Program? Reduce current income taxes Provide tax-deferred growth Supplements other retirement income Personal Savings Social Security PSERS

5 How does a 403(b) work? $100/pay in Bank $100/pay in TSA 2017 Taxable Income $50,000 $50,000 (Married filing jointly) TSA: $100/pay x 26 -$2,600 Adjusted Gross Income $50,000 $47,400 Income Tax $12,500 $11,850 -$650 Assumes 25% Tax Bracket Plus: For low and moderate income employees, the IRS offers the Savers Credit a tax credit for contributing to a 403(b)

6 How much can I elect to contribute to my 403(b)? Employee Deferral Limits in Normal Limit (or 100% of pay, if less) $18,000 Aged 50+ Catch up $ 6,000 Maximum Employee Contribution $24,000 When can I get my money out of my TSA? No IRS penalty if age 55 and separated from service In-Service withdrawals permitted at age 59 ½

7 Your 403(b) Plan Permits: Universal Availability (every employee can participate) Exchanges (between approved vendors) Transfers (from or to another school employer) Loans (if offered by the vendor) Hardship Distributions (if offered by the vendor) Roth 403(b) Contributions

8 Roth 403(b) Section of IRS Code that allows participants to make after-tax contributions, receive tax-deferred growth, and make after-tax withdrawals after retirement Benefits: Allows you to have tax-free assets after retirement Could be useful for employees with more time to save

9 The Time is NOW! The Cost of Waiting to Make Contributions: Annual Savings Age Started Saving # of Yrs. Contributed Amount Contributed Accumulated at Age 62 Ed $3, $97,200 $243,101 Joy $3, $54,000 $320,070 This chart assumes a fixed annual rate of return of 6% with earnings reinvested. This hypothetical example is not intended to show the performance of any particular fund for any period of time, fluctuation of principle value or investment return. The regular investment of money does not ensure a profit or protect against losses.

10 Riverview School District List of Approved Investment Providers AXA Equitable Life Insurance Company Global Atlantic Kades-Margolis Corporation Lincoln Investment Planning, LLC Mass Mutual Life Insurance Company Plan Member Services VALIC VOYA Financial Complete contact information for the representatives of the above approved investment providers can be found at under the Plan Sponsors link.

11 Getting Started Review your employer s plan information at under the Plan Sponsors link Contact one of the investment provider representatives listed to open your 403(b) account

12 403(b) Plan Third Party Administrator (TPA) TSA Consulting Group 28 Ferry Road SE Fort Walton Beach, FL (888)

13 Any Questions? The information in this presentation is for informational purposes only and should not be construed or relied upon as tax advice or legal advice. It was not intended to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending to another party any transaction or matter presented. If this presentation is used in the offer or sale of a variable annuity or mutual fund, it must be preceded or accompanied by the appropriate product prospectus. An investment in a mutual fund or variable annuity involves risk, including loss of principal, and is not a deposit or obligation of, or guaranteed by any bank. The investment return and principal value of an investment in a mutual fund or variable annuity will fluctuate so that you may have a gain or loss at redemption. Securities and Registered Investment Advisory Services Offered Through GWN Securities, Inc Jog Road Palm Beach Gardens, FL (561) Member FINRA & SIPC Kades-Margolis, a USRP company, is not affiliated with GWN Securities, Inc For more information and to carefully consider the securities offered, including investment objectives, risks, charges, expenses and fees, please request a prospectus from you GWN Registered Representative. Please read it carefully before you invest or send money.

14 { Helping School Employees Cope With College Expenses

15 Tuition Rewards Points Tuition Rewards Points are discounts to tuition at participating private colleges and universities across the country Think frequent flyer miles, but for college tuition costs instead of airline tickets Offered by Kades-Margolis to public school employees through their employers Same program, offered under: Upromise Rewards* PA 529 Guaranteed Savings Plan (formerly TAP)* *If you already participate in one of these programs, you are still eligible to enroll through Kades-Margolis to earn additional points Over 400,000 Current Participants in the SAGE Tuition Rewards Program The use of Tuition Rewards is limited to full-time, undergraduate tuition at participating colleges. Tuition Rewards are remitted solely as a reduction to the participating college s full tuition bill and NOT awarded in cash. Colleges reserve the right to use the tuition reduction as part of, or separate from, any financial aid packages. Member colleges are not required to accept Tuition Rewards on transfer students.

16 Tuition Rewards Points 1 Tuition Reward Point = $1 towards tuition For example if a student has 10,000 Tuition Rewards Points, he or she is guaranteed to receive a minimum scholarship of $10,000 (spread equally over four years) at a SAGE member school. Maximum points that can be used for any one student = First year s tuition split over 4 years Represents the minimum scholarship that an eligible student will receive if and when he or she attends a member school Students may still qualify for other scholarships, awards, loans, grants, etc., dependent on individual college policy

17 How are Tuition Rewards Points Accumulated? 5% of the employee s 403(b) and/or 457(b) account balance(s)* upon enrollment into the program, and each year thereafter; OR If no 403(b), 457(b), or account balances are less than $20,000; a minimum of 1,000 points upon enrollment into the program and each year thereafter You must meet with a Kades-Margolis representative each year to sign up for your annual points *Accounts need not be with KMC; employee s may use an account balance with any 403(b) or 457(b) vendor No requirement to have or to purchase a 403(b)/457(b)

18 Who can enroll? All employees of the school can enroll as a sponsor during the enrollment period Annual opportunity to enroll and to accumulate future points Sponsors may enroll their children, grandchildren, nieces, nephews, other family members, and godchildren May enroll children up to August 31 st of the year 11 th grade begins Enroll an unlimited number of eligible children

19 How are points allocated? Sponsors may allocate accumulated points among their named eligible students Must assign points to children by August 31 st of the year 12 th grade begins Sponsors may re-allocate accumulated points to other eligible students if the initially named student does not go on to college or picks a non-participating college

20 Participating Colleges Over 370 Participating Private Colleges Nationwide In PA: Albright, Arcadia, Cabrini, Duquesne, Lycoming, Rosemont, Widener and 47 other colleges and universities Out of state: Creighton, DePaul, Ohio Wesleyan, Valparaiso, and hundreds of other colleges across the nation Visit for a complete list of participating colleges and universities More colleges and universities are being added all the time!

21 Why are colleges participating? It s a way to attract more students! Because they have built up tuition points: Parents may encourage their child to visit one or more of these colleges during their college visitation tours Parents may encourage their child to enroll in one of these colleges College enrollments are down and competition is fierce. These private colleges need to remain affordable to parents due to: Competition from Community Colleges Competition from less expensive state schools These colleges will have a list of Tuition Reward Program participants to use for communications of their marketing material and recruiting packages

22 Enrollment Process Kades-Margolis Representatives will enroll employees during annual open enrollment periods No obligation to purchase a TSA or any other product to participate Simply meet with the KMC representative to register as sponsor and designate a student You will need to provide the following to enroll: Your name, address, SSN, phone number, and address Student s name, address, address, date of birth, current grade, and relation to the child Don t forget to bring your 403(b)/457(b) account statement to earn points equal to 5% of your account value!

23 Any Questions? Securities and Registered Investment Advisory Services Offered Through GWN Securities, Inc N. Jog Road, Palm Beach Gardens, FL 33418, , Member FINRA & SIPC. Kades-Margolis Corporation, a USRP company, is not affiliated with GWN Securities Inc. If this presentation is used in the offer or sale of a variable annuity or mutual fund, it must be preceded or accompanied by the appropriate product prospectus. An investment in a mutual fund or variable annuity involves risk, including loss of principal, and is not a deposit or obligation of, or guaranteed by any bank. The investment return and principal value of an investment in a mutual fund or variable annuity will fluctuate so that you may have a gain or loss at redemption.

24 Kades-Margolis Corporation PSEA endorsed marketer of 403(b) s since 1974 We offer: Tax-Sheltered Accounts to supplement your retirement savings IRAs and Roth IRAs PSERS Rollovers College Funding Asset Management Mutual Funds Life Insurance Long-Term Care Insurance And much more Visit our website at for more information about how we can help you plan and invest for your future

25 Section 125 Plan Exciting opportunity to: Save on taxes Increase your spendable income Part of the IRS Code: Allows you to pay for certain expenses on a pre-tax basis Components: Medical FSA Dependent Care Pre-tax premiums for certain insurance offerings By Utilizing Pre-Tax Dollars, You Save on Taxes!!!

26 Section 125 Plan Covers Dependent Care for: Your children who are under age 13 A dependent who is physically or mentally incapable of caring for him or herself An elderly parent who is handicapped or ill Qualifying Expenses: Daycare Summer Day Camp Overnight Camp is not included You must be the custodial parent Daycare expenses must be for you (& your spouse) while actively working or looking for work

27 Section 125 Plan Covers Unreimbursed Medical Expenses, not covered by health insurance, such as: Medical, dental, and vision plan deductibles and co-pays Eye exams, contact lenses, and eyeglasses Hearing care expenses Prescription drugs Orthodontia Prescribed smoking cessation and weight loss programs Over-the-counter items that are considered medically necessary* *Prescription required or OTC drug and medicine reimbursement

28 Changes is OTC Eligibility (Effective 01/01/2011) Under the Patient Protection & Affordable Care Act: Medicines and biologicals will continue to be eligible for reimbursement only if the request is accompanied by a doctor s prescription Examples: cough medicines, pain relievers, acid controllers Insulin and other non-medicinal over-the-counter items, such as band aids, will continue to be eligible without a prescription

29 Medical FSA Savings EXAMPLE:

30 Considerations Annual Election Can only be changed during the plan year with a life changing event Marriage, divorce, birth, death, adoption Use it or lose it Riverview School District allows for a $500 medical carryover Limits Estimate your expenses conservatively Check your account balance on-line Dependent Care: $5,000 Maximum Head of Household, Married Filing Jointly $2,500 Maximum Each if Married Filing Separately Medical FSA: $2,600 REMEMBER: Use it or Lose it Estimate Conservatively!

31 Section 125 Plan Administration offered through CBIZ On-line Account Access Review your account information File claims Debit Card used to pay for eligible expenses (RETAIN RECEIPTS) Access your account and reimbursement forms at:

32 One on One Benefit Election A Sign-Up Sheet will be available at your school office Sign-up for your enrollment session at a time that is convenient for you. Walk-ins always welcome!!

33 Any Questions? Securities and Registered Investment Advisory Services Offered Through GWN Securities, Inc N. Jog Road, Palm Beach Gardens, FL 33418, , Member FINRA & SIPC. Kades-Margolis Corporation, a USRP company, is not affiliated with GWN Securities Inc. If this presentation is used in the offer or sale of a variable annuity or mutual fund, it must be preceded or accompanied by the appropriate product prospectus. An investment in a mutual fund or variable annuity involves risk, including loss of principal, and is not a deposit or obligation of, or guaranteed by any bank. The investment return and principal value of an investment in a mutual fund or variable annuity will fluctuate so that you may have a gain or loss at redemption.