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Women and Investments

Women and Investments. Understanding the Thrift Savings Plan’s Role in Your Retirement. Presented by: Tammy Flanagan Tammy@nitpinc.com. Resources for YOU. www.narfe.org. Famous Wealthy Women.

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Women and Investments

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  1. Women and Investments Understanding the Thrift Savings Plan’s Role in Your Retirement Presented by: Tammy Flanagan Tammy@nitpinc.com

  2. Resources for YOU www.narfe.org

  3. Famous Wealthy Women http://www.slate.com/articles/business/billion_to_one/2013/11/the_world_s_top_50_billionaires_a_demographic_breakdown.html and http://www.forbes.com/sites/clareoconnor/2013/09/16/inside-the-world-of-walmart-billionaire-alice-walton-americas-richest-art-collector/

  4. Closing the Confidence Gap: Women and Investing http://www.forbes.com/sites/northwesternmutual/2014/05/07/closing-the-confidence-gap-women-and-investing/

  5. More Americans Living to 90, U.S. Census Finds • More Americans are living to 90 and beyond, and by 2050 their ranks could reach almost 9 million, a new U.S. Census Bureau report finds. • In fact, the number of nonagenarians has nearly tripled -- from 720,000 in 1980 to 1.9 million in 2010, researchers found. • Most of them -- 74 percent -- are women. http://health.usnews.com/health-news/family-health/boomer-health/articles/2011/11/17/more-americans-living-to-90-us-census-finds

  6. Income Replacement

  7. http://www.frtib.gov/pdf/survey/participant/TSP-Survey-Results-2013.pdfhttp://www.frtib.gov/pdf/survey/participant/TSP-Survey-Results-2013.pdf Top Sources

  8. How to Invest for Retirement • Don’t Follow • People tend to buy high and sell low • What’s hot! • “Be fearful when others are greedy and be greedy when others are fearful.” Warren Buffet • Stick to Your Plan • Regular and automatic is best • The market is now reaching new highs – even after 2008 • Keep Costs Low • TSP = $.29 / $1,000 / year ($500 x $.29 = $145 / year) • Ignore Financial News • If you did nothing in 2008, you would be better off today • Doing nothing can make you look brilliant!

  9. Where Can I Learn More? What Do You Think of the Thrift Savings Plan?/ • The TSP is simple • The TSP is cheap • The TSP includes a special deal • Warning: Why some financial advisors hat the TSP

  10. Learn More, Fear Less • 88% of FERS employees contribute to the TSP • More than 25% contribute less than 5% • 36% of TSP is invested in the G Fund (May 2014) • Average FERS Account balance: • Traditional: $111,245 • Roth: $4,674

  11. 27% of TSP invested in the C Fund (May 2014) • Standard & Poors 500 Index • What’s In: • Michael Kors • Google • Under Armour • General Motors • What’s Out: • J.C. Penney • Sears • H.J. Heinz • Big Lots inc. • 10.27% annualized return over 25 years (1988 – 2013)

  12. 10% of TSP invested in the S Fund (May 2014) • Dow Jones U.S. Completion Total Stock Market Index • Represents all U.S. publically traded stocks, excluding components of the S&P 500 • 4,500 companies • Index started 1987 – same year TSP started • S Fund added to TSP in 2001

  13. 6% of TSP invested in the I Fund (May 2014) • EAFE acronym stands for Europe, Australasia and Far East • 21 Developed markets excluding Canada • Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, Israel, Australia, New Zealand, Singapore, Hong Kong, and Japan

  14. 5% of TSP invested in the I F Fund (May 2014) • Barclays Capital U.S. Aggregate Bond Index, a broad index representing the U.S. bond market • Heavily invested in government bonds • G Fund buys a nonmarketable U.S. Treasury security • Those “in-the-know” tend to invest in actively managed bonds rather than index funds

  15. Not sure? G I

  16. 16% of TSP Invested in L Funds (May 2014) As of July 2014

  17. Lifecycle Quiz • I should choose the fund closest to my • Retirement Date • Date of death • Date I will begin to use the money

  18. Lifecycle Quiz • I should choose the fund closest to my • Retirement Date • Date of death • Date I will begin to use the money

  19. Lifecycle Quiz • The best way to invest in Lifecycle Funds is to: • Keep 50% in G and the rest in the L Income • Choose one or two Lifecycle Funds that are appropriate for my retirement goals • Diversify between all 10 TSP investment options

  20. Lifecycle Quiz • The best way to invest in Lifecycle Funds is to: • Keep 50% in G and the rest in the L Income • Choose one or two Lifecycle Funds that are appropriate for my retirement goals • Diversify between all 10 TSP investment options

  21. Start Early and Don’t StopLearn more at TSP4gov • Is Roth TSP Right for Me? (Civilian) by TSP4gov • Take 5 for Your Future • The Cost of Taking a TSP Loan by TSP4gov • Investing in Bonds by TSP4gov • 10% Early Withdrawal Penalty Tax by TSP4gov • Combine and Save: Transfer Into the TSP by TSP4gov • Contribution Allocations and Interfund Transfers by TSP4gov

  22. Plans for Withdrawing Money From TSP – Separated Participants http://www.frtib.gov/pdf/survey/participant/TSP-Survey-Results-2013.pdf

  23. Monthly PaymentsBalance: $500,000 Growth: 5% Dollar Amount Life Expectancy • $3,000 / month • Run Out at age 78 • $2,000 / month • Balance at age 100: $209,484.99

  24. How about an annuity? Features Payments • $500,000 purchase • Begin at 55 • Single Life • 2% Interest Rate Index • Level Payment • No Cash Refund • 2.62% Interest Rate Index: $2,219 / mo.

  25. How about an annuity? Features Payments • $500,000 purchase • Begin at 55 • Single Life • 2.62% Interest Rate Index • Increasing Payment • Cash Refund* *If you die before the amount of your TSP balance used to purchase your annuity has been paid out, the remaining amount will be paid in a lump sum.

  26. The pitches are persuasive. Workers who leave jobs with the federal government transferred $10 billion last year out of the Thrift Savings Plan. Forty-five percent of participants who left federal service in 2012 removed all of their funds from the plan and closed their accounts by the end of 2013. To investigate this exodus, the government expects to survey departing workers later this year. http://www.washingtonpost.com/business/as-brokers-urge-ira-rollovers-ex-workers-ditch-their-low-fee-federal-retirement-plan/2014/08/14/53c68dd0-2239-11e4-958c-268a320a60ce_story.html

  27. Plans for Transferring Money From TSP http://www.frtib.gov/pdf/survey/participant/TSP-Survey-Results-2013.pdf

  28. Reasons For Keeping Money in TSP http://www.frtib.gov/pdf/survey/participant/TSP-Survey-Results-2013.pdf

  29. Questions?

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