Retirement Lesson Plan

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The Benefits of Tax-Advantaged Savings Vehicles


Taxes can take a big bite out of your total investment returns, so it’s helpful to look for tax-advantaged strategies when building a portfolio. But keep in mind that investment decisions shouldn’t be driven solely by tax considerations; other factors to consider include the potential risk, the expected rate of return, and the quality of the investment.

Hardship Withdrawals from Employer-Sponsored Retirement Plans


Hardship withdrawals are a type of “discretionary” distribution available from certain employer-sponsored retirement plans. Retirement plans aren’t required to allow employees to take hardship withdrawals while they are still working for the employer. Consult your plan administrator or your employer’s benefits department to find out if hardship withdrawals are available from your plan.

Tax Credit for IRAs and Retirement Plans (“Saver’s Credit”)


The Economic Growth and Tax Relief Reconciliation Act of 2001 made significant changes to IRAs and retirement plans. One provision of the act allows some low- and middle-income taxpayers to claim a partial, nonrefundable income tax credit (the “saver’s credit”) for contributing to certain tax-deferred retirement savings vehicles. The credit can be applied against the taxpayer’s regular income tax liability (or minimum tax liability, if paying under the alternative minimum tax system) and is in addition to any income tax deduction the taxpayer receives for making the contribution. The purpose of this provision is to encourage retirement savings among those who, typically, can least afford to save.

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Understanding Employer Plans 


Before you can take advantage of your employer’s plan, you need to understand how these plans work. Read everything you can about the plan and talk to your employer’s benefits officer. You can also talk to a financial planner, a tax advisor, and other professionals.

Arizona State Retirement System (ASRS)


Total membership approximately 573,900
 Active Members 208,800         Inactive Members 218,900
 Retired Members and Survivor Beneficiaries142,200
 Long Term Disability Members 4,000


A.R.S § 38-712 Conveys Primary Intent of ASRS

1. Provide incentive in recruitment and retention
2. Contribute toward competitive total compensation package
3. Provide employers with the benefits of a stable workforce
4. Promote a high level of public service
5. Provide a base retirement benefit

2017 Retirement Confidence Survey (RCS)


Many workers lack retirement confidence and feel stressed about retirement preparations. Review the results of the 27th wave of the RCS, the longest-running survey of its kind in the nation, finds that the share of American workers who are very confident in their ability to afford a comfortable retirement remains low, and some workers report that preparing for retirement is emotionally or mentally stressful. However, among retirees, confidence in their ability to afford a comfortable retirement continues to be comparably high.

How Recent Retirement Legislation Will Affect State Employees


Recently, the Arizona Legislature passed three retirement bills that will impact ASRS members,including teachers. Those affected would be wise to review these changes closely to determine how your retirement plans will be affected.