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December 2019, Issue 122
Are You Financially Ready For Your Future?
It is never too late, or too soon, to receive a personalized Financial Readiness Review from your State of Alaska retirement plan advisor. Meeting with your advisor can help answer many retirement questions including:
- how your assets are allocated,
- your savings rate,
- your eligible retirement age,
- the amount or percentage of your pre-retirement income you will need to replace, and
- your financial readiness.
During the review, you and your retirement plan advisor will discuss your personal data, pension and Social Security estimates, outside investments, and goals. Your advisor will also include spouse and partner retirement benefits and other potential sources of retirement income.
The Financial Readiness Review will give you a detailed look at your projected income and cash flow throughout your retirement years. If the review reveals you’re not quite on track, you’ll receive suggestions to help you get there.
Already retired? A Financial Readiness Review can help you, too! It’s easier to see the road ahead with a personal review. Schedule an in-person or over-the-phone meeting today by calling (800) 526-0560 toll-free or in Anchorage at (907) 276-1500.
Social Security Administration Benefits
As a PERS member, your PERS pension benefit may reduce the amount of benefits you are entitled to under Social Security if you did not pay Social Security taxes during your PERS employment. If you paid Social Security taxes during your PERS employment, there will be no reduction to your Social Security benefits. Keep in mind, not all PERS employees participate in Social Security. If you are unsure if you paid Social Security taxes, please contact your employer.
For those who did not pay Social Security taxes while working for the State of Alaska, local government, or school district, there are two laws that may reduce your Social Security benefits:
- The Windfall Elimination Provision, which affects the way your Social Security retirement benefits are calculated.
- The Government Pension Offset, which affects Social Security benefits you may be eligible to receive as a spouse or widow/widower.
Windfall Elimination Provision
The Windfall Elimination Provision affects people who have earned a pension from the PERS and did not pay Social Security taxes during their employment, but who also worked at other jobs where they paid Social Security taxes long enough to qualify for retirement benefits. If you are subject to the provision, a different formula is used to calculate your Social Security retirement benefits to prevent a windfall in benefits.
The provision does not apply if you first became eligible to retire prior to 1985, or if you have 30 years of “substantial” earnings during your Social Securitycovered employment. For more information regarding the Windfall Elimination Provision, please contact your local Social Security office and request publication no. 05-10045. You can also call the Social Security Administration at (800) 772-1213 or visit their website at ssa.gov.
Governmental Pension Offset
The Governmental Pension Offset affects Social Security benefits you may be eligible to receive as a spouse or widow/widower. Under the offset provisions, some or all of your spouse or widow/widower’s Social Security benefit may be offset by your PERS pension if you did not pay Social Security taxes during your employment. For more information regarding the offset provision, please contact your local Social Security office and request publication no. 05-10007. You can also call the Social Security Administration at (800) 772-1213 or visit their website at ssa.gov.
Walk-in or Scheduled Appointment
The value of time can be immeasurable, and we want to make sure we maximize the time we have with you. The Division of Retirement and Benefits offers you the choice of either a walk-in or scheduled appointment. We want to help you get the most out of your interactions with the Division, so if you are wondering which option would be better for you and your situation, please read the following guidelines.
Walk-in appointments should be limited to business that can be accomplished within 10-15 minutes. This includes dropping off forms, submitting your retirement application, a quick review of your documents, and notarization of relevant Division documents.
Many documents may be submitted to the Division electronically, but some are required to be received by mail or in-person. General questions and requests for information can be handled by our Member Services Contact Center, staffed by our team of professional representatives, toll-free at (800) 821-2251 during regular business hours. Although our staff enjoys our personal one-on-one meetings, phone calls and online submissions will save you driving time and the stress of finding parking.
If your business cannot be resolved in 10-15 minutes, a scheduled appointment with a senior benefits counselor may be the best solution. This includes retirement projections, in-depth questions about service and retirement eligibility, coordination between the Stateadministered plans in which you participate, and other retirement and benefits related questions that require additional time and review.
These one-hour appointments can be done in-person in Juneau and Anchorage, or by phone, regardless of where you live. Phone appointments are ideal for those who are unable to meet face-to-face or find a phone call a more convenient way to interact with us. These appointments can be set up online here or by calling our Member Services Contact Center toll-free at (800) 821-2251 during regular business hours.
Your time is very important to us. If you have comments or recommendations, please email Roberto Aceveda at Roberto.Aceveda@alaska.gov.
Retirement Savings Options
When preparing for retirement, you may wonder: “Am I saving enough? Is there more I can do? What options do I have through my employer?”
A good first step is verifying if you have any additional retirement saving opportunities with your employer. Employer retirement saving plans traditionally have lower participation costs than investing on your own. You may be surprised to find that most TRS employers offer a 403(b), 457(b), or a “Thrift Savings Plan” option to help you save for retirement.
Did you know? The State of Alaska’s 457(b) Deferred Compensation plan is available for all PERS and TRS employers to participate in, increasing your options for retirement savings. Employers who are interested in participating must enter into a participation agreement with the Division of Retirement and Benefits. There is no cost to employers to participate. This will allow you to have additional retirement savings options with the Division that you can easily access through Empower Retirement Services, just like those who are participating in the TRS Defined Contribution retirement plan.
Participating in the Deferred Compensation plan is a great way to save even more for retirement. Contributions are made by you, the member, and employers have the option to match your contributions up to 6%. There are two ways you can contribute to the State’s Deferred Compensation plan:
- Traditional pre-tax method: Pre-tax contributions help lower your taxable income throughout the year while you’re working, then are taxed when you take a distribution from your account
- Post-tax Roth method: Post-tax contributions to the Roth option are taxed at the time of deferral.
Your Roth distributions are tax-free income if:
- you hold your account for five years and are at least 59 1/2 years old before you take a distribution, or
- you become disabled, or
- you pass away, and your beneficiaries make a withdrawal.
Empower Retirement Services, the State’s record keeper for our Defined Contribution retirement plans, has many options for assisting members with their retirement. Empower provides informational seminars, helpful online advice from a registered investment advisor, Advised Assets Group (AAG) LLC, in-person or telephonic appointments with local advisors, and more! For an additional cost, AAG’s My Total Retirement is also available. My Total Retirement is a professional management program designed to assist members from the goal-setting stage all the way to the withdrawal strategy at the end of your working career.
If you are unsure if your employer is participating in the Deferred Compensation plan, please contact your human resources office. If your employer is not participating, consider encouraging them. It’s no cost to the employer and increases your opportunities for saving towards retirement.
Make an appointment with an Empower Retirement’s local advisor by phone or in person today.
2020 Retiree Benefit Mailing Dates
Retiree benefits will be mailed on the following dates in 2020:
- January 24
- February 25
- March 25
- April 23
- May 21
- June 25
- July 23
- August 25
- September 24
- October 23
- November 24
- December 22
The mailing date is also the date that funds are available from your financial institution. If you would like to have your benefit directly deposited, complete the Electronic Direct Deposit Authorization for Retirees form and return it to the Alaska Division of Retirement and Benefits. You can find the form here.
We Want to Share Your Retirement Story
We want to share your retirement story with your fellow members. Are you volunteering, traveling, involved in the community or just enjoying life? Let us know where you are living now, what you are involved in, where you were employed, and how your State of Alaska retirement has allowed you to enjoy new adventures in retirement. Submit your stories on our website here, email your stories to email@example.com, or mail your stories and photos to the address on this newsletter, Attention: Newsbreak Editor. Please keep your stories to 500 words or less.
The information provided on this page may or may not be up-to-date. If you are unsure, please contact us.