Retirement Plans

Helping You Get One Step Closer to Retirement

How confident are you about having a comfortable retirement? If you are a little worried, you’re not alone. According to a 2014 report by the Employee Benefits Research Institute, 36% of respondents were “not very confident” or “not confident at all” about having a comfortable retirement. We can help.

Participating in your employer’s 403(b) or 457(b) plan can take you one step closer to a retirement that can support your lifestyle.

What is a 403(b)?
A 403(b) plan is a retirement savings plan for employees of public schools, non-profits and certain churches. This is a retirement plan in addition to any type of pension your employer may offer. With a traditional 403(b) plan your contributions are tax-deferred, meaning you pay taxes on the money when you take it out of the plan. With a Roth 403(b) plan you pay taxes on the contributions up front, but the money grows tax-free.

What is a 457(b)?
A 457(b) Plan is a supplemental retirement plan for governmental and certain non-governmental employers. This type of plan is tax-deferred, which means you pay taxes on the money when you take it out of the account. A 457(b) plan has many flexible features that allow you to save on a tax-deferred basis while still having access to your money through loans, and unforeseen emergency distributions if the need arises.

If your employer offers both a 403(b) plan and a 457(b) plan you can maximize your retirement savings by contributing the maximum allowed to both plans.

Your decisions today affect how you will live tomorrow.

When you take the time to plan for your financial future, retirement can provide an opportunity to do what you have always wanted to do. Without proper planning, retirement could mean working during your golden years, cutting back on your lifestyle and even relying on family members to help take care of you. Beware of the retirement income gap.


Assumptions for Gap Analysis—(Source is TRAK Software by Trustbuilders) Teacher’s Pre-retirement salary is $37,000, teacher retires at age 60 and receives $20,895 in TRS Pension benefit, based upon Texas TRS guidelines.  

Will your retirement income cover increasing retirement expenses? Many school district employees will experience a significant drop in income when they retire, even though they may be covered under a pension plan.¹ Chances are a state pension is not enough.

¹The Retirement Analysis Kit (TRAK) Software by Trustbuilders, Inc. 2012 Version.

Now is the time to plan & save

You can take control of your retirement security by contributing to your 403(b) savings plan through payroll deductions. Your 403(b) plan allows you to accumulate savings on a highly tax-favored basis, to supplement your state teacher retirement pension plan or other retirement plans.

Your retirement savings can move with you through the years and can be transferred to other employer plans or into a traditional IRA.

The Longer you Defer Taxes…The Faster Your Money Grows

One of the greatest advantages of participating in a tax-deferred plan is that all dividends, interest, capital gains and growth potential accumulate on a tax-deferred basis while the money remains in the account. Only when you begin receiving the money will you have to pay income tax on it.

Save more without seeing a difference in your take-home Pay:

 Post-TaxPre-Tax
Monthly Gross Income $4,500$4,500
Pre-Tax Contributions$0$133
Standard Tax Deductions$672$639
Post-tax retirement contributions$100$0
Take-home Pay$3,113$3,113
(This hypothetical example is based on a teacher in the state of Texas claiming single and zero allowances and in the 25% tax bracket.)

 

Annuity Basics

We know that you have unique and specific needs and goals regarding your retirement that is why we offer a number of different types of annuity products. An annuity is an insurance product that allows you to accumulate money, often on a tax-deferred basis, and receive a series of income payments at regular intervals. People choose annuities to provide an income stream in retirement that will supplement the retirement income they will receive from Social Security, pension benefits, investments and other sources.

Fixed Annuities

This type of annuity is also known as a traditional annuity contract. A fixed annuity is designed to accumulate funds at a guaranteed* rate of return that is set by the insurance company. The principal and interest are guaranteed not to lose value,* and all risk is carried by the insurance carrier. After the annuity’s accumulation period, the annuity contract will pay out the accumulated funds as a stream of income.

*Assuming no withdrawals

Indexed Annuities

This type of annuity provides rates of return that are tied to an underlying equity-based index, but without direct participation in the stock market. The issuing insurance company will offer a guaranteed* minimum return that protects against downside risk when the market does poorly. If the market performs well, then the annuity provides upside interest potential, because it would receive a higher rate of credited interest based upon caps and participation rates. After the annuity’s accumulation period, the annuity contract will pay out the accumulated funds as a stream of income.

Indexed annuities do not directly participate in any stock or equity investments. Most indexed annuities permit owners to participate in only a stated percentage of an increase in an index, and also impose a “cap rate” that represents the maximum annual account value percentage increase allowed to contract owners. An investment cannot be made directly into an index.

Variable Annuities

A variable annuity allows you to invest your premium payments in a range of investment options, which are typically mutual funds. The value of your variable annuity contract will vary depending on the performance of the investment options you have chosen. Variable annuities also provide periodic payments that either begin immediately or at a future date.

Time is a Wonderful Asset

When time is on your side, every increase you make to your retirement savings can make a significant impact on the total amount of money you have to live the life you want in retirement.

 

*Guarantees are based upon the claims paying ability of the issuing company.

Guarantees are dependent upon the claims-paying ability of the insurer and do not protect the value of the variable product portfolios, which may fluctuate. Variable contract holders are subject to investment risks, including the possible loss of principal invested.

Variable contracts are sold by prospectus. For more complete information, please request a prospectus from your registered representative. Please read it and consider carefully a Fund's objectives, risks, charges and expenses before you invest or send money. The prospectus contains this and other information about the investment company.

National Life Insurance Company and Life Insurance Company of the Southwest, both members of National Life Group, offer various types of annuities, each designed to help meet specific personal and business needs and objectives. If you would like more information, please contact us.

Variable contracts are underwritten by National Life and distributed by Equity Services, Inc., Registered Broker/Dealer Affiliate of National Life Insurance Company, One National Life Drive, Montpelier, Vermont 05604.

Legal Disclosure

TC84439(0415)P