Retirement Related News for 10/30/2015

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From The Center For Retirement Research: Fewer Boomers Get Social Security at 62

The best way for most individuals to increase their retirement income is by delaying Social Security – each year they wait significantly boosts their monthly benefit check.

It seems that baby boomers are getting the message. The share of people who claim their Social Security benefits at age 62 – as soon as they’re eligible – is falling, and falling more rapidly than previously thought.

From NBC News: 98-Year-old Man is Indiana's Oldest State Employee

Even at 98-years-old, the oldest Indiana state employee is still going strong. WTHR's Kevin Rader reports. Alternate YouTube Link

From BenefitsPRO: Seniors not doing enough to maintain cognitive health

Good news: Nearly everybody agrees that brains are important.

A recent survey by AARP finds that 98 percent of those over 40 believe that maintaining or improving brain health is somewhat or very important. The other 2 percent presumably believe that healthy brains are for nerds.

From The Missouri Valley Times: Retirement days ahead to bring Bingo and cards games

For many, retirement age usually comes along when people are in their mid- to late-sixties. However, many people do continue to work in some capacity – either in a different field or part-time way.

Marge Stirtz of Missouri Valley has worked a little beyond that norm – working for 65 years and into her early 80's as a legal secretary in the community. She will be retiring in late October from Missouri Valley’s Kellogg Law Firm. A few months following her retirement, Marge will celebrate her 83rd birthday – on Feb. 6, 2016.

She began her legal secretary career right after graduating from the Magnolia High School in May of 1950.

“I started out working for Kenneth Acrea,” said Stirtz, “and then I worked for John Kellogg’s dad, and then for John Kellogg for about the following 25 years. I’ve enjoyed every minute of it!”

From Ozarks First: Phil Collins announces end of retirement

Phil Collins wants you to take a look at him now. He's back from retirement.

"The horse is out of the stable and I'm raring to go," Collins told Rolling Stone in an interview published online Wednesday.
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Reemployment After I Retire?

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If I retire, rollover 2 year backdrop and then find out I can't live on my monthly benefit can I seek employment with state agency again? 
Yes. If you retire and return to work in a benefit-eligible position (normally requiring at least 1,040 hours of work per year and permanent in nature), covered by MOSERS or the MoDOT and Patrol Employees’ Retirement System (MPERS), your monthly payment will be stopped upon official notification of your re-employment. Your employer determines if you are working in a benefit-eligible position.
Once you again terminate and re-retire, your benefits will be recalculated and your benefit payments will resume. You are not allowed to accrue any additional BackDROP payments in connection with such additional service.
Alternatively, you may continue receiving your MOSERS pension benefit while working for any employer not covered by MOSERS or MPERS (including work for the state in a non-benefit-eligible position) and earn as much as you wish.  Such employment will have no effect on your MOSERS benefit.
Remember, MOSERS benefit counselors are available by phone at (800) 827-1063 or in person M-F, 7:30 a.m. - 4:30 p.m., if you would like to discuss your options.  We understand that retirement is a big decision.

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Friday Top Five: Retirement Related News for 10/23/2015

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From Governor Nixon: Gov. Nixon takes action to keep FY2016 budget in balance following loss of one-time tobacco settlement funds

Gov. Jay Nixon today announced that, due to the recent court ruling relieving tobacco companies of their obligation to pay the State of Missouri $50 million under the Master Settlement Agreement, spending will need to be restricted in order to maintain a balanced budget.

“Based on the St. Louis Circuit Court’s decision, both my administration and members of the General Assembly counted on these funds being available when the Fiscal Year 2016 budget was passed,” Gov. Nixon said. “Now that this ruling has been overturned, this unexpected loss of funds must be accounted for through spending restrictions to keep the budget in balance and our AAA credit rating intact. In taking these necessary actions, we have made every effort to minimize the impact on vital services by reducing spending from new programs yet to get underway and funding increases that would grow the size of government.”

From Forbes: An Early Start Can Lead To An Early Win In Retirement Saving

I recently ran into a blog post on dealing with money for Millennials that’s gone viral: “If You Have Savings In Your 20s, You’re Doing Something Wrong.” The message: enjoy life now, spend your money and quit trying to save so much since life is a gamble and living by the numbers sucks! That idea kind of makes me go, “Hmmm, how can that be right?” so let’s talk about it.

I’m totally in agreement with the idea that saving shouldn’t be a gloomy, hated thing. Diets with food we hate eating end up in calorie binges we love! The same thing goes for your money. If you can’t enjoy the journey, you probably aren’t going to the destination.

But there’s a balance in here somewhere, and an undeniable fact. Starting saving during your 20’s beats saving later hands down, all over town! And you can gamble on yourself with all your dough, but having enough to quit working someday doesn’t have to be a gamble at all!

From BenefitsPro: IRS 2016 Cost-Of-Living Adjustments For Retirement Plan Contributions

The Internal Revenue Service released cost-of-living adjustments for retirement plan contributions today.

As expected, contribution caps will remain largely unchanged from last year.

In a press release, the IRS explained that Social Security’s cost-of-living index did not meet the statutory thresholds required to trigger adjustments to plan contribution caps.

From Treasurer Clint Zweifel: For National Save for Retirement Week, Treasurer Zweifel Offers Advice to Make Your Retirement More Secure

Treasurer Zweifel is raising awareness of the steps Missourians can take to prepare for retirement.

State Treasurer Clint Zweifel is celebrating National Save for Retirement Week, (now know as National Retirement Security Week) October 18-24, with a few tips to help you save and plan for retirement. Individuals and families have more options now than ever before to save for their retirement. From employer-sponsored plans to private options, now is the time to understand what you will need in retirement and stick to a long-term plan to get there.

From News Leader: How To Pay A Pension Debt When Fair Isn't An Option?

There's big trouble brewing in a little corner of Springfield's police-fire pension plan. And despite repeated promises (and city ordinances) saying that public safety employees would foot the bill, taxpayers might be tapped again for help.

The problem goes back to 1999, when police and firefighters agreed to pay for a boost in retirement benefits through a payroll deduction. The cost of the benefit has been rising steadily for veteran employees, raising concerns those long-serving employees will resign or retire early, increasing the financial burden on the few that remain.

Bonus Article:

From The Wall Street Journal: Retired Women Are More Generous Than Men

Maddy Dychtwald: Are retired women really more generous than retired men?

That is one of the questions my firm, Age Wave, in partnership with Merrill Lynch, set out to explore in our just released study, “Giving in Retirement: America’s Longevity Bonus.” We surveyed 3,694 adults age 25-plus from all walks of life and socioeconomic strata to deepen our understanding of the role of giving in retirement and how giving back has the potential to both maximize social impact and provide personal fulfillment.
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Survivor Benefit

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If an employee dies before retirement or after retirement what happens to their retirement funds? Does it go their children? Minor children? or does the employee lose this benefit if not married? 
For general state employees who are vested, the following applies:

Death BEFORE Retirement
If there is no eligible spouse, a survivor benefit may be paid to your natural or legally adopted child(ren) younger than age 21. This benefit is dependent on the law in effect at the time of your termination. If there is more than one eligible child, the benefit will be divided equally among them. The survivor benefit for each child will stop when the child becomes age 21 (unless a child is totally disabled and you terminated service with the state on or after 8/28/2001). Benefits can begin the month following the member’s death if all necessary documentation is provided.

If you die without any eligible beneficiaries, no retirement benefits are paid.

Death AFTER Retirement
At retirement you will elect a benefit payment option that determines whether or not a benefit will be paid to anyone after your death, e.g. life income annuity, life income with 120 guaranteed payments, life income with 180 guaranteed payments.

In General
No benefits will be paid for a deceased general state employee who is not vested (unless the employee’s death is determined to be duty-related). However, a designated beneficiary of an MSEP 2011 member may request a refund of contributions paid by that member plus any interest.

If you aren’t sure which plan you belong to or the vesting requirement, check the Which Plan Am I In? section of MOSERS’ website.

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Leaving State Employment Before Retirement

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If I am not retiring yet and I leave my job for another outside the State of Missouri, will the funds being stored in my pension continue to grow or will it freeze at that amount and stay the same until I decide to collect it ?
If you are vested with MOSERS (after 5 years of employment in MSEP or MSEP 2000 and after 10 years in MSEP 2011) and leave state employment, you will be eligible for a lifetime monthly benefit once you meet the age and all other legal requirements and retire under a MOSERS defined benefit plan. The benefit is calculated using the formula Final Average Pay x Multiplier x Credited Service = Monthly Benefit.  If you leave state employment, you would no longer continue to accrue service so the benefit would not grow.

Some Additional Information:
It is important to note that members do not have individual retirement “accounts” with MOSERS; they earn lifetime benefits payable to them or their eligible beneficiary(ies). This provides financial security because with a defined benefit plan you don’t “outlive your money”. Your retirement eligibility depends on which plan you belong to. Please see the Which Plan Am I In? section of our website if you aren’t sure which plan you are in, then you can find the specific age and service requirements in the appropriate member handbook or on the summary of benefits comparison brochure. Your benefit payment options and eligibility for benefits will be based on the laws in effect on the date you leave state employment.
If you are a member of MSEP 2011, you pay contributions to help fund the system. Upon termination of employment, you may request a refund of your contributions*. By receiving a refund of contributions, you forfeit all your credited service and any future rights to receive benefits from the system. However, you may leave your contributions with MOSERS if you think you may return to state employment in the future (see below). Contributions from a vested member of MSEP 2011, will continue to accrue interest annually until the member is eligible for normal retirement or withdraws the contributions.
If you made contributions to MOSERS, left state employment, did not request a refund of contributions, and return to a job covered by MOSERS in the future, your previous service credit will be combined with your new service credit to qualify for retirement. You will resume making member contributions.

Members of MSEP and MSEP 2000 do not make contributions to the system  and therefore don’t earn any interest.

* Please Note - By receiving a refund, terminated members forfeit all their credited service and any future rights to receive any retirement and long-term disability benefits, and rights to coverage through Missouri Consolidated Health Care Plan (MCHCP) other than as a dependent under provisions of COBRA.

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Changes to Retirement Benefits?

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In a conversation after the open enrollment meeting for health care, I was encouraged by others to join the Association of Retired Missouri employees because they had been in a meeting where they had been told that the legislature was trying to "take away our retirement benefits". When I said that wasn't possible because it was a "defined benefits program", I was told that they had been told that there was a legislator who was attempting to "get his hands" on the pension fund because it had done so well. And that this legislator also wanted investments to only be made in Missouri companies. Can you shed any light on this?
Thank you for your inquiry.  We are not aware of any current proposals to change retirement benefits administered by MOSERS. However, you are correct in your statement that retirement benefits for Missouri’s state employees/retirees are “defined” by state law.  Before any change can be made to retirement benefits, the Missouri General Assembly must pass a bill and have that bill signed by the Governor.  Typically, as was the case in 2010 with the passage of the MSEP 2011, the plan changes made by the General Assembly would affect new hires as of a certain date.  For example, the MSEP 2011 affects state employees hired for the first time on or after January 1, 2011.

There are many proposals offered each legislative session that would impact public pension funds. In the past, some of those proposals have included in-state investment requirements.  To track pension related proposals, you may be interested in accessing the Legislative Status Report maintained by the Joint Committee on Public Employee Retirement (JCPER) at which is updated daily once bills are pre-filed on December 1.

It also is important to remember that assets at MOSERS (as are all Missouri pension fund assets) are held in a trust for the exclusive benefit of members and cannot be commingled with any other funds pursuant to state statute (Section 105.662 - ).

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Friday Top Five: Retirement Related News for 10/16/2015

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From the News Tribune: Lawmakers finally move on study of state pay, benefits

After several years of inaction, Missouri state government issued last week its request for proposals from potential consultants interested in determining the “total compensation” state employees receive.

Federal reports and a special Missouri legislative committee already agree — state government’s employees are, on average, the lowest-paid in the nation.

But members of the Legislature’s Joint Interim Committee on State Employee Wages also want to know if ranking changes when the employees’ total compensation — salary, health care and retirement and other benefits — are considered.

From the News Tribune: Lower gas prices means no Social Security increase next year

For just the third time in 40 years, millions of Social Security recipients, disabled veterans and federal retirees can expect no increase in benefits next year, unwelcome news for more than one-fifth of the nation’s population.

They can blame low gas prices.

By law, the annual cost-of-living adjustment, or COLA, is based on a government measure of inflation, which is being dragged down by lower prices at the pump.

The government is scheduled to announce the COLA — or lack of one — on Thursday, when it releases the Consumer Price Index for September. Inflation has been so low this year that economists say there is little chance the September numbers will produce a benefit increase for next year.

From Forbes: How To Give Financial Gifts To Loved Ones

Giving to a loved one or charity can be one of life’s greatest joys. But when it comes to gifting, there are some key issues, including potential tax implications, that you’ll want to keep in mind in order to make the most of your gift.

The most important thing to remember is that financial gifts are irrevocable: Once you make the gift and record it on your federal tax documents, you can’t take it back.

From American City & Country: The Retirement Tsunami

As the point person for Houston’s initiative to maintain a quality workforce in the face of a rising tide of retirements, Kelly Schreck practices what she preaches. So, as head of employee development, she asked two employees in her department with very different specialties to swap jobs for a year.

For 12 months, each woman trained the other on how to perform her duties, so that each mastered the technical details of handling labor relations and public information.

From BenefitsPro: 4 Simple Things To Do Now While You're Not Retired

Older workers are in trouble when it comes to retirement. They have little or no savings to meet what’s going to be a huge income gap for most of them, and no time to correct the situation.

According to a new study from the Insured Retirement Institute, the typical retiree faces annual expenses of some $50,000 but can only expect an average of $16,000 a year from Social Security.
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Friday Top Five: Retirement Related News for 10/09/2015

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From Governor Jay Nixon: Gov. Jay Nixon today announced his appointments to the Missouri Commission for the Deaf and Hard of Hearing and the Missouri State Employees Retirement System Board of Trustees.

Gov. Jay Nixon today announced his appointments to the Missouri Commission for the Deaf and Hard of Hearing and the Missouri State Employees Retirement System Board of Trustees.

The Governor has appointed Lloyd Joseph Carmichael, of Springfield, to the Missouri State Employees Retirement System (MOSERS) Board of Trustees. The board is responsible for the general administration and proper operation of the Missouri State Employees Retirement System, as well as for the administration and oversight of the State of Missouri Deferred Compensation Program.

From The Nevada Daily Mail: Missouri's retirement systems for public educators on solid footing says director

The Public School and Education Employee Retirement Systems of Missouri is doing what it needs to do, said Steve Yoakum, executive director of PSRS/PEERS.

Yoakum told those attending the Vernon County Retired Teachers meeting Sept. 25, at the Bowman Building in Nevada that the system was meeting its stated goals:

* To help school districts attract and retain the best and brightest educators and employees for Missouri's school children.
* To manage the systems in a prudent and cost-efficient manner.
* To provide retirement security to Missouri's educators and education employees after a full career of service.

From CNN Money: Don't waste your savings on a boring retirement

Sometimes we put so much time and effort into the financial aspects of retirement planning -- saving the right amount, creating a viable investing strategy, assuring we'll have adequate income after the paychecks stop, etc. -- that we don't pay enough attention to translating all that financial planning into a more enjoyable and gratifying retirement.

Which is why I've long recommended that as people get within five to 10 years of calling it a career -- and then again periodically during retirement -- they engage in some "lifestyle planning," or thinking seriously about how they to spend the last 30 or so years of their lives.

From Naija247 News: US pension funds embrace private equity in Africa

But while African pension funds still tend to err on the side of caution and, for the most part, avoid investing in domestic private equity funds, US pension funds are embracing private equity on the continent.

That Missouri’s 111,000 retired state workers receive some of their pensions thanks to Africa consumers may seem unlikely.

As pension funds the world over struggle to meet their responsibilities, many are considering a larger exposure to African economies to tap into growth of, on average, close to 5 per cent a year. Some sectors, particularly those serving the nascent middle classes, have been growing much faster, at up to 20 per cent a year.

From Scripps Media: Missouri Senator McCaskill Addresses Pension Advance Fraudsters

A problem that's affecting pension advances among firefighters, veterans and teachers in other states is being addressed by Missouri Senator Claire McCaskill.

McCaskill says she's hoping other states will outlaw the practice of pension advances like Missouri.

She says because of fees and interest rates, pension advances often offer consumers terms and costs that are extremely unfavorable in comparison to other financial products.

Related: 2014 Legislation Affecting MOSERS.
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Maximum Age for Optional Life Insurance?

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Is there a maximum age limit for optional term life insurance coverage available via MOSERS? Or is coverage available until death, regardless of age?
Optional life insurance coverage through MOSERS* continues for the member’s lifetime, as long as applicable premiums are paid and the terms of the group policy are met. Your premium may be adjusted every January 1 based on your age.

In order to be eligible for MOSERS’ optional life insurance as a retiree, you must retire within 60 days of leaving state employment. You may elect to continue purchasing any amount of coverage from $1,000 up to a maximum of $60,000** (in increments of $500). However, the amount of coverage you carry into retirement cannot exceed the amount you carried while actively employed. You have 60 days from the end of the month in which you leave state employment to make an election to convert the remaining optional life insurance to an individual policy through Standard Insurance Company if you meet eligibility requirements.

As an aside, if you are an actively employed or retired member of MOSERS and have MOSERS’ basic life insurance, you also have worldwide travel assistance at no cost to you through our group insurance plan.

*MOSERS' life insurance is not available to employees of the Department of Conservation or state regional colleges/universities except for Lincoln University and State Technical College of Missouri; they provide different employer-sponsored insurance benefits.

**Note for members who retire under MSEP 2000 - If you retire under the “Rule of 80,” you may retain all of your optional life insurance coverage until age 62. At age 62, your coverage will automatically reduce to $60,000. For additional information, please see the MOSERS Life Insurance Handbook.
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MSEP 2000 COLA Cap?

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How do I determine when or if I have met my MSEP 2000 COLA cap?
The COLA cap does not apply to MSEP 2000 members; it applies only to members of MSEP hired prior to 8/28/97, who receive a minimum 4% COLA until meeting their COLA cap.

They meet their COLA cap once their monthly benefit is equal to 165% of their initial or original benefit. This does not mean those members no longer receive an annual COLA. It means that it will be calculated differently: MSEP members who have already met their COLA cap and all MSEP 2000 retirees receive an annual COLA based on 80% of the percentage increase in the average CPI-U from one year to the next, with a minimum of 0% and maximum of 5%.

You can read more about how COLAs are calculated on our website, and also watch a short video. MOSERS will announce retiree COLAs for 2016 in mid-January.

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Friday Top Five: Retirement Related News for 10/02/2015

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From PLANSPONSOR: Retirement Readiness in the Age of High Tuition

Adults who think it’s their duty to put the kids through college may want to think a little further—that is, if they are also saving for retirement. A recent LIMRA Secure Retirement Institute study explored the incidence of parents and grandparents helping, or being willing to help, finance a four-year college education and their attitudes behind that. More than collecting numbers, the researchers wanted to give a warning, if needed, to self-sacrificing family who might later find they’ve given up more than they bargained for.

From Forbes: Four Must-Know Social Security Facts

When it comes to Social Security, far too many retirees — and future retirees — are in the wilderness. Not only are most Americans not fully informed about the program, they don’t know how to maximize their benefits.

Of course, knowing what Social Security offers and how to get the highest-possible benefits are two different things. There’s a lot you have to know.

From CBS News: Is more money the key to a happy retirement?

With so many people approaching their retirement years with meager retirement savings, rather than aiming to fully retire and not work at all, it might be more realistic to aim for being happy. To help you get there, it's important to think about how much money you really need to be happy. A long time ago, someone said "money can't buy you happiness," and indeed considerable thought and research has gone into the question of whether having more money makes you happier. The so-called "Easterlin paradox" maintains that once your basic needs are met, having additional income won't add to your happiness.

From CNN Money: Low gas prices may doom Social Security raise

Cheap gas is good news for most people -- except senior citizens. Falling prices at the pump mean that retirees probably won't get a boost to their Social Security benefits next year.

The amount of money that Social Security pays out is adjusted each year to taken into account the rate of inflation in the 12 months leading up to September. This is known as the cost of living adjustment, or COLA. This year benefits rose 1.7%, and they've climbed by less than 2% for three years in a row.

From Daily Finance: How to Start Investing, & Why Now Is a Good Time

There is a big percentage of Americans who don't like complex financial problems. It's why things get crazy around tax season. It's why personal debt and credit are out of control for many. And it's why so many Americans don't invest for their retirement. Sure, there are plenty of people who rightly say they don't have the extra money to invest. But I suspect that these people are actually in the minority. With careful planning, it's possible for most people to invest in such a way that -- at least -- they will be somewhat financially secure upon retirement.

Related:  As a Missouri state employee, you can easily start investing through the State of Missouri Deferred Compensation Plan by using Target Date Funds or a Self-Directed Brokerage account.
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