You may have purchased financial or insurance products and then found out how they affected your retirement planning later. Surveys of affluent Americans consistently tell us that their major frustration is their advisors should be more proactive about future issues that might affect their financial well being.
Even Small Savings Can Make a Big Difference in Your Financial Security
Recent economic challenges have left many of us with less money in our wallets and more concern about our financial security. Still, one of the best things we can do now is make a plan to save. Even a modest nest egg can make a difference.
You earn your money the old-fashioned way – you work for it. Growing your nest egg, planning for retirement, and expanding you financial portfolio are vital to you future – and your family’s future. At School Employees Insurance the Rich Israel Agency, we can help you devise a viable investment plan that can grow at a rate you’re comfortable with.
We can help you navigate the maze of financial terms and options. Annuities, estate planning, and more – we can help you understand the terms and our investment strategies. You work hard for your money – we’re dedicated to working even harder.
What is an IRA
An Individual Retirement Account allows workers and their spouses to set aside funds for retirement on a tax-deferred basis. School Employees Insurance the Rich Israel Agency will help you get started.
Anyone with earned income (and certain spouses of workers) can open an IRA and accumulate tax-deferred earnings. However, the only workers eligible to take a full IRA federal income tax deduction without regard to their Adjusted Gross Income (AGI) level are those who are not active participants in:
Annual Contributions to a Traditional IRA
| Year | Under age 50 | Age 50 and Over |
| 2012 | $5,000 | $6,000 |
| 2013 | $5,500 | $6,500 |
The Purpose of IRAs
The purpose of IRAs is threefold. First, IRAs provide retirement benefits to workers and spouses who may not be covered by another plan. Second, the tax-deferral of IRA earnings and the tax deduction for contributions—if available—give the IRA owner an opportunity to conserve dollars that would otherwise be lost to current taxes. And third, the IRA owner has more dollars at work than if the IRA was depleted by annual taxes on investment earnings. Arizona, Nevada, or California residents can contact us about setting up their IRA.
Contributions to Traditional
Anyone under age 70½ who receives compensation—salary, self-employment income, commissions or alimony—or is married to someone who receives compensation and files jointly is eligible to make a contribution to an IRA. Eligible individuals may make IRA contributions up until the due date for filing the federal income tax return. For example, an individual could make an IRA contribution on April 15, 2014 that would be effective for tax year 2013. Note the time for making an IRA contribution cannot be extended past this filing date by asking for an extension.
Let a School Employees Insurance representative work with you on setting up a retirement plan for you today.
The information above is for sole purpose of information only and is not intended or is in anyway a contract.
What is a Roth IRA?
In 1998, the Traditional IRA just described was supplemented by an alternative individual retirement account known as a "Roth IRA." Contributions to a Roth IRA by eligible individuals are nondeductible, but earnings grow income tax free and distributions are also income tax free if certain requirements are met.
After the owner has had a Roth IRA for at least five years, the earnings may generally be withdrawn federal income tax free.
Who can contribute to a Roth IRA?
Joint filers with Modified Adjusted Gross Incomes (MAGI) above $188,000 and single taxpayers with MAGIs above $127,000 cannot contribute to Roth IRAs. Eligibility to contribute begins to phase out when joint Modified AGI reaches $178,000, and when single-filer MAGI reaches $112,000. The annual contribution limit for a Roth IRA is the same as for traditional IRAs, but must be reduced by any contributions made to traditional IRAs for the year. Active participants in an employer-sponsored qualified retirement plan may contribute to a Roth IRA if otherwise eligible without regard to the MAGI phase-out range for active participants contributing to a traditional IRA. Owners may withdraw contributions at any time without taxation or penalty.
The following chart summarizes the annual contribution limits for Roth IRAs, which hinge on the taxpayer's filing status and MAGI level:
Taxpayers Modified AGI Level (2013)
| Married Filing Jointly | Single or Head of Household | Contribution Limit (2013) |
| 0 to $178,000 | 0 to $112,000 | $5000 |
| $178,000 to $188,000 | $112,000 to $127,000 | Reduced |
| $188,000+ | $122,000+ | -0- |
School Employees Insurance team of advisors is dedicated to helping you put together a plan that works. Whether it’s a traditional IRA or Roth IRA we will help you make the right choice. Put your trust in us to get you on the road to retirement.
The information above is for sole purpose of information only and is not intended or is in anyway a contract.
What is a Section 403(b) Plan
A salary deferral or reduction plans in which employees allocate a portion of their pre-tax compensation to the 403(b) plan. A 403(b) is usually purchased under an annuity investment vehicle. School Employees Insurance the Rich Israel Agency has several options and advice on contributing to a supplemental 403(b) plan.
Eligible Organizations
A Section 403(b) plan, tax-sheltered annuity, tax-sheltered custodial account, tax-deferred annuity, or tax-deferred custodial account, are all names for a retirement plan available only to employees of:
Tax Advantages include:
Contributions to the plan are excludable from the employee's gross income, up to contribution limit and earnings are tax-deferred until taken as a distribution.
Contributions to a 403(b) plan are not reported as current income and generally are not subject to federal income tax. Earnings on 403(b) contributions are not currently taxed. Thus, they can accumulate on a tax-deferred basis until eventually taken as distributions.
Annual 403(b) Contribution Limit:
| Year | Under age 50 | Age 50 and Over |
| 2012 | $17,00 | $22,500 |
| 2013 | $17,500 | $23,000 |
Qualified Distribution
The employee may withdraw funds from a 403(b) plan at any time after reaching age 59½. If the employee withdraws funds before reaching age 59½, he or she must pay a 10% penalty tax in addition to the regular income tax on the distribution, unless the distribution is:
The more you save the less you spend. Always pay yourself first. Educators in Arizona, Nevada, or California must contact School Employees Insurance to see if we offer a 403(b) in you school district.
The information above is for sole purpose of information only and is not intended or is in anyway a contract
What is a 457(b)?
Section 457(b) of the Internal Revenue Code provides an exclusion from gross income for a certain portion of salary deferred by participants in the deferred compensation plans of state and local governments and certain tax-exempt organizations. The earnings on the deferrals inside these plans are also excluded from the participants' current gross income.
Eligible Participants
Participation in a Section 457(b) plan is restricted to persons who perform services for an eligible employer, including:
Maximum Deferral Amount
| Year | Under age 50 | Age 50 and Over |
| 2012 | $17,000 | $22,500 |
| 2013 | $17,500 | $23,000 |
Distribution
Distributions from a Section 457(b) plan may not be made earlier than:
Contact a School Employees Insurance representative to see which plan is best for you. In you live in Arizona, Nevada, or California we will be happy to work with you to make sure you are on the right track.
The information above is for sole purpose of information only and is not intended or is in anyway a contract
What are SIMPLE Retirement Plans
SIMPLE plans can be established by employers with 100 or fewer employees who received at least $5,000 each in compensation from the employer in the preceding year, provided the employer does not maintain another qualified retirement plan, 403(b) annuity plan, 501(c)(18) trust, SEP, or governmental plan. An employer who contributes to a collectively bargained plan for some employees may set up a SIMPLE 401(k) plan or SIMPLE IRA for other employees; however, those employees who participate in the collectively bargained plan still count towards the 100-employee limit. If an employer goes over the 100-employee limit as its business expands, the employer may continue to maintain the SIMPLE plan for another two years.
SIMPLE plans may be set up by self-employed persons as well as corporations. Self-employed persons receiving earned income from an employer count as "employees" for determining the 100-employee limit.
SIMPLE plans are not subject to the anti-discrimination or top-heavy rules usually applicable to tax qualified retirement plans
SIMPLE retirement plans can be established in two ways
-Simple IRA
-Simple 401(k)
Simple IRA's contributions
-Employee elective salary deferrals
-Required employer matching contributions or employer "non-elective" contributions
Maximum Salary Deferral:
| Year | Under age 50 | Age 50 and Over |
| 2012 | $11,500 | $14,00 |
| 2013 | $12,000 | $14,500 |
Employer Contributions
The employer must either:
Vesting
All Contributions to a SIMPLE IRA are vested immediately to the employee, including those made from the employer.
Distributions
Contributions to SIMPLE IRAs and the earnings are not taxed until withdrawn. The usual 10% penalty tax applies to early withdrawals (generally before age 59_, with the usual exceptions for IRAs). However, if the withdrawal occurs within the first two years of plan participation, the penalty tax is 25% if the participant is under age 59_. Otherwise, SIMPLE IRA distributions are taxed the same as IRA withdrawals.
Let School Employees Insurance the Rich Israel Agency show you how SIMPLE it is to open you retirement plan today. If you live in Arizona, Nevada, or California we will work with you to make sure the job gets done.
The information above is for sole purpose of information only and is not intended or is in anyway a contract
What is a SEP?
Simplified Employee Pension Plans are employer funded plans, which an employer makes contributions to an employee's SEP-IRA. The primary reason a business owner sets up a SEP is to establish an easy-to-administer retirement plan.
Who can establish as SEP
Three options for setting up the plan:
Who can participate in a SEP?
Every employee who is age 21 or over during the year for which contributions are made and who has performed services for the employer in three of the five years preceding the year for which contributions are made must participate in the SEP.
Ineligible Employers
The Purpose of a SEP
The "simplified" aspect of SEPs is the primary reason for their use. Business owners who want to establish an easy-to-administer retirement plan may be especially interested in these plans.
Some employers are reluctant to establish a retirement plan because of the administrative requirements associated with reporting to the IRS and Department of Labor. These employers may instead opt for a SEP because these plans provide valuable retirement benefits with a minimum of paperwork and reporting obligations.
Technically, SEPs are not qualified plans, which helps explain why they have simpler administrative requirements. Nonetheless, a SEP makes it possible for an employer to make tax-deductible contributions to an employee's retirement account. The employee benefits because:
School Employees Insurance the Rich Israel Agency has the advice you need to decide which plan is for you. If you live in Arizona, Nevada, or California we are you one stop shop to get your retirement on track.
The information above is for sole purpose of information only and is not intended or is in anyway a contract
The 401(k) Rollover Explained
Are you planning to, or have you recently left or lost your job where you had a 401(k)? School Employees Insurance the Rich Israel Agency wants to help out. The good news is that since these accounts are tied to your employer, once you cut your ties with that employer, you're generally entitled to do what you wish with those funds. Unfortunately, a lot of people take unnecessary losses and penalties by withdrawing the funds. This can set your retirement back years, and tens of thousands of dollars. So, the best option is to opt for a 401(k) rollover.
The 401(k) rollover is ideal because it allows you to transfer your existing retirement account into another retirement account without being subject to unnecessary taxes or withdrawal penalties. Remember, retirement accounts like a 401(k) are funded with pre-tax dollars, and grow tax-deferred. That means if you take a premature distribution, the IRS is going to stick you with taxes on all of that money, and also apply an additional 10% penalty if you withdraw the money prior to age 59 1/2. This is a pretty raw deal if you don't need that money for a dire emergency, yet so many people will take the penalty simply because they don't know how to do a rollover. Let School Employees Insurance team work with you to get this processed correctly.
The average person holds 11 jobs from the age of 18 to 44, according to the Bureau of Labor Statistics, and for many of us that means 11 or more workplace retirement accounts. Because not all employer plans require you to leave the plan when you leave the company, you could end up with several, separate retirement accounts.
To get a clearer picture of your money, consolidating old workplace accounts to an IRA or your next employer plan makes a lot of sense. But the decision of whether and how to "roll over" your 401(k) or other workplace retirement account is an important one, especially considering that these accounts make up the bulk of workers' savings.
Your Arizona, Nevada, or California 401(k) could be your largest retirement asset. Do you want your former employer keeping control of it? If not work with a School Employees Insurance advisor to take care of this for you!
The information above is for sole purpose of information only and is not intended or is in anyway a contract
Annuities are investments that offer income security during retirement. There are many types of annuities available, and a qualified School Employees Insurance agent in Arizona, Nevada, or California can help you understand all the associated benefits and responsibilities, including offering annuity quotes that detail contributions and payouts.
Annuities help you plan for the future by providing stable, steady income that can be structured in a number of ways. Annuities are very reliable, offering terms that apply either for a predetermined payment period or for the life of the recipient, even if payments exceed contributions. Such guarantees can relieve financial worries in unstable times.
Investors may purchase an annuity with a lump sum, such as when converting a life insurance policy, or they may pay into the annuity over a number of years, which is known as an accumulation period. Under current laws, any interest or earnings that occur during the accumulation period are tax deferred until the time of withdrawal.
Annuities can be set up so that payments are equal over the course of the payout period or, in some cases, to increase over time to accommodate inflation. Interest and earnings on annuities may be lower than with some investments, but the security of guaranteed income makes them an attractive option for many investors.
Some Arizona, Nevada, and California annuities provide a guaranteed rate of interest for the life of the investment; rates and payments are fixed at the beginning and remain unchanged. Some annuities may offer special riders to transfer unpaid benefits to a beneficiary.
Annuity quotes provide the best picture of differing benefits. Your School Employees Insurance agent is available to discuss all your financial planning needs.
The information above is for sole purpose of information only and is not intended or is in anyway a contract
STRS
Your retirement may be years or even decades away… or it could be right around the corner. Either way, you can benefit from gaining a better understanding of how your teachers’ retirement program will contribute to your income after you retire. We can help. We offer state teachers' retirement system (STRS) overview to explain how your state’s retirement system works. This free review can help you feel confident in making decisions and getting the most out of your money.
An STRS overview can help you:
Contact your local School Employees Insurance agent today to learn more about STRS.
ASRS
In 1912, Arizona's first year of statehood, the first teacher retired with an Arizona State teacher's pension. From 1912 until 1943, Arizona teachers were granted pensions by the State Legislature if they had at least 30 years of service in Arizona schools and were 65 years of age or older. All teachers' pensions were $50 per month.
The Legislature created the Teachers' Retirement System, effective July 1, 1943. All certified, full-time teachers were members, contributing to a retirement plan. The employer contribution rate varied, but could not exceed 5.03 percent of the first $3,600 of teachers' salaries.
Active teachers voted to join the ASRS in 1954, and transferred to ASRS on January 1, 1955. The Teachers' Retirement System continued to pay retirement benefits to retired teacher members who were ineligible to join the ASRS.
Today, the ASRS membership includes the State of Arizona, the three state universities, community college districts, school districts and charter schools, all 15 counties, most cities and towns, and a variety of special districts.
Arizona Retirement System
CALSTRS
The California State Teachers' Retirement System (CalSTRS) provides retirement, disability and survivor benefits for California's 856,360 prekindergarten through community college educators and their families. CalSTRS was established by law in 1913 and is part of the California State and Consumer Services Agency.
As of September 2011, CalSTRS is the largest teachers’ retirement fund in the United States. CalSTRS is also currently the eighth largest public pension fund in the world.
California State Teachers' Retirement System
The Public Employees' Retirement System of Nevada (PERS) is a tax-qualified defined benefit plan created by the Legislature as an independent public agency to provide a reasonable base income to qualified employees who have been employed by a public employer and whose earning capacity has been removed or has been substantially reduced by age or disability. It was also created to make government employment attractive to qualified employees and to encourage them to remain in government service for such periods of time as to give employers and the people of the state the full benefit of the training and experience gained by the employees while employed in public service.
Nevada Public Employees Retirements Services