You work hard; your money should too.
You know about the retirement income gap so now let’s make a plan to address it!
with the help of a financial professional, decide how much to save each month and where to save your money.
An example might look like this:
Contributions:
My monthly contributions will total $251.89 to reach my goal of $150,000 in 25 years.
Strategy:
To ensure my financial security, I will build my savings in a vehicle that can guarantee an income stream for life.
look at your monthly contribution through the lens of tax deferral.
Let’s face it, most of us wince at the thought of an additional payroll deduction. So, you’ll be pleasantly surprised to remember the power of tax deferral – the basis on which your earnings are diverted to retirement savings. In this example, while reducing your take-home pay by $200, you’re socking away $256 in retirement savings – a nice boost to your monthly goal.
22% Tax Bracket
| Monthly Change in Pay | $200 |
| Pre-Tax Salary Reduction Amount | $256 |
| Annual Amount Saved | $3,076 |
choose retirement savings solutions that support your strategic objective(s).
Many employers choose to include annuities as the savings vehicle within their 403(b) and 457(b) plans1. An annuity allows you to accumulate money with an insurance company that can earn interest and grow on a tax-deferred basis with the peace of mind that you will never lose money during a downturn in the market. Then, when you are ready to retire, you can either withdraw money as you need it or turn your money into a stream of income you cannot outlive.
Upside Potential
Grow savings based on the performance of a market index.
Tax Deferred
Savings grow faster when interest compounds and is tax deferred. Increase your interest potential with Rate Booster.2
Protection
Never lose a penny of your deposit. Protect your money (and earned interest) from market downturns. 3
Fixed indexed annuities are a type of annuity policy that credits interest based in-part on the change in a market index like the S&P 500 and protects you from declines in the index since the index strategy will never earn less than 0%.4
how index crediting works
Flexible Premium Indexed Annuity
To learn more about the Flexible Premium Indexed Annuity solutions offered by National Life,
click on the statement below that sounds most like you.
“I want to start building my retirement savings without risk or fees.”
Flex Secure Growth
Meets the desire to accumulate value and enhance savings growth potential.
Ideal for individuals who want flexibility in the policy time horizon and are focused on growing their retirement savings without market risk.
“I want to boost my savings with premium bonuses.”
Flex Secure Growth Bonus
Boosts retirement savings and accumulation value with 5% Premium Bonus for each deposit in first 8 years.
Ideal for individuals who will keep the policy for over 10 years or more and want an added boost to their retirement savings without adding market risk.
“I want to build savings that can provide guaranteed lifetime income.”
Flex Select Income
Addresses combined goals of saving more now while providing the potential for increasing future income, then locking in any increases.
Ideal for individuals who want flexibility to grow their retirement savings without market risk, and who would like to get a guaranteed lifetime income.
Retire with Lifetime Income!
What are employees like you asking?
How much can I contribute?
Each year, the IRS sets annual deferral limits on how much may be contributed. That said, you may be eligible for special catch-up provisions if you are over 50 or if you’ve been with the same employer for a significant amount of time. Our local financial professionals can help you calculate your maximum allowed contribution.
If my employer offers a contribution match, how does it work?
In most cases, employers will contribute dollar-for-dollar matching funds to their employees’ retirement accounts, up to a certain percentage. The following example shows a 6% employer match. If your employer offers a match, rule of thumb is to make sure you contribute enough.
| You contribute | Your employer contributes |
| 4% | 4% |
| 6% | 6% |
| 10% | 6% |
What happens if I change jobs?
One of the key benefits of a 403(b) is that you have complete control of it, even if switching to a different school district. The portability feature allows you to roll over your accumulated funds to your new retirement plan. Or, if you prefer, you can leave your account in place and any balance has the potential to continue growing tax deferred.
What happens if I need money? Can I access my savings?
A lot of factors go in to answering this question—including employment status, age and access rules, which are outlined in your plan rules. We recommend connecting with your financial professional to understand which of the options described below are allowed by your plan and determine what’s right for you. However, here are some things to know:
403(b) Plan Withdrawal Restrictions
The 403(b) plan is designed as a long-term retirement accumulation plan. IRS regulations and plan guidelines govern when you may withdraw money from your plan. Withdrawals are taxed as ordinary income and, if prior to age 59½, may be subject to the 10% IRS early distribution penalty. Withdrawals of your vested amounts are permitted when you meet one of the following requirements: attain age 59½, severance of employment, your death, hardship.
403(b) Hardship Distributions
While employed, if you encounter certain life events, you may be permitted to withdraw money from your plan to cover the expense associated with hardship. Hardship Distributions may be permitted for the following events:
- Medical expenses not covered by insurance
- Tuition expenses for the next 12 months
- Funeral expenses
- Purchase of primary residence
- Casualty loss to primary residence not covered by insurance
- Prevention of eviction or foreclosure on mortgage
Distributions are taxed as ordinary income, may be subject to the 10% IRS early distribution penalty, and may be subject to policy and/or plan withdrawal charges.
457(b) Plan Withdrawal Restrictions
The 457(b) Plan is designed as a long-term retirement accumulation plan. IRS regulations and plan guidelines govern when you may withdraw money from your plan. Withdrawals are taxed as ordinary income. Withdrawals of your vested amounts are permitted when you meet one of the following requirements: attain age 59½, severance of employment, your death, unforeseen emergency.
457(b) Unforeseen Emergency Distributions
While employed, if you encounter certain life events, you may be permitted to withdraw money from your plan to cover the expense associated with unforeseen emergency. Unforeseen Emergency Distributions may be permitted for the following events:
- Medical expenses not covered by insurance
- Funeral expenses
- Casualty loss not covered by insurance
- Prevention of eviction or foreclosure on mortgage
Distributions are taxed as ordinary income and may be subject to policy and/or plan withdrawal charges.
implement your plan!
Contributions are taken directly from your paycheck, making it easy (and automatic) to contribute to your retirement nest egg on a regular basis.
With the help of your financial professional
- Submit fixed indexed annuity product application.
- Submit a salary reduction agreement to your employer to initiate automatic payroll deducted contributions.
Don’t overthink it! You can always change the amount of your contributions by completing a new salary reduction agreement. In fact, you should! Give yourself a raise.
grade your money’s performance.
Regularly review and adjust your plan based on changes in your financial situation.
Your action items might look like this:
Quarterly reviews:
I will review my retirement account statements every quarter to ensure I’m on track.
Annual review:
I will meet with my financial professional annually to adjust my contributions or strategy to stay on target.
When you can,
Give yourself a raise!
You’re worth it.
- Buying an annuity within a tax-deferred retirement plan doesn’t offer extra tax benefits. If considering an annuity within a retirement plan, base your purchase decision on the annuity’s other features and benefits, as well as its risks and costs, not its tax benefits. Indexed annuities do not directly participate in any stock or equity investments.
- Rate Booster only benefits interest crediting during periods where interest is credited to that strategy. If no indexed interest is credited for that period, Rate Booster will have no effect. The charge for Rate Booster occurs for every crediting period regardless of whether interest is credited.
- Assuming no withdrawals during the withdrawal charge period. Rider charges continue to be deducted regardless of whether interest is credited.
- A Fixed Indexed Annuity (FIA) is usually a fixed annuity whose interest is determined, at least in part, by the performance of a specified index of the market. Unlike traditional fixed annuities, the policy owner may receive zero interest for a single period on a specific premium payment if the index performs poorly. However, with most designs, the premiums are protected and guaranteed to grow over time, and the owner of a fixed indexed annuity may experience better interest crediting than a traditional fixed annuity during periods when the market performs well. Indexed annuities do not directly participate in any stock or equity investments. An investment cannot be made directly into an index. Most FIAs 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. Because they are meant for long-term accumulation, most annuities have surrender charges that are assessed during the early years of the contract if the contract owner surrenders the annuity. In addition, withdrawals prior to age 59 1/2 may be subject to a 10% Federal Tax Penalty. The guarantees of annuity contracts are contingent on the claims-paying ability of the issuing insurance company. All withdrawals made from annuities with pre-tax contributions are taxed as ordinary income. All withdrawals from an annuity purchased with non-qualified monies are taxable as ordinary income only to the extent there is a gain in the policy. This is not a solicitation of any specific annuity contract. Standard & Poor’s®, “S&P®, S&P 500®, and Standard & Poor’s 500™ are trademarks of Standard & Poor’s and have been licensed for use by National Life Insurance Company and Life Insurance Company of the Southwest. This Product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representations regarding the advisability of investing in the product. The S&P Composite Index of 500 stocks (S&P 500®) is a group of unmanaged securities widely regarded by investors to be representative of large company stocks in general. An investment cannot be made directly into an index.
Questions?
Request A Consultation
Whether you are looking to better understand your options or get free advice from a local financial professional, we can help you find the answers you need to take the next step.
Call: (866) 243-7174
Additional Support
Helpful Calculations
National Life Group® is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest, Addison, TX and their affiliates. Each company of National Life Group is solely responsible for its own financial condition and contractual obligations. Life Insurance Company of the Southwest is not an authorized insurer in New York and does not conduct insurance business in New York. Fixed indexed annuities (FIAs) are issued by Life Insurance Company of the Southwest. Annuities have surrender charges that are assessed during the early years of the contract if the contract owner surrenders the annuity. Guaranteed lifetime income may be provided either by annuitizing an annuity, or through an annuity income rider. Riders are supplemental benefits that can be added to an annuity. Riders may be optional, may require additional premium and may not be available in all states or on all products. This is not a solicitation of any specific annuity. Guarantees are dependent on the claims paying ability of the issuing company. Fixed indexed annuities do not directly participate in any stock or equity investments. National Life Group and its agents are neither affiliated with nor endorsed by any state retirement plan, school system or government agency.
National Life Group is an Affinity Partner of the Association of School Business Officials International (ASBO) through its Corporate Alliance Partnership program.
TC7830297(0425)3 | Cat No 106511(0125)
