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Steps to Financial Independence

Steps to Financial Independence. Presented by: Bob King September , 2013. Steps to Financial Independence. GE Pension Social Security 401K with 50% matching up to 3.5% or 4% (Roth IRA) GE investments through Savings & Security & ELFUN investments

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Steps to Financial Independence

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  1. Steps to Financial Independence Presented by: Bob King September, 2013

  2. Steps to Financial Independence GE Pension Social Security 401K with 50% matching up to 3.5% or 4% (Roth IRA) GE investments through Savings & Security & ELFUN investments Outside investments (Use of Consultants – Financial Planners)

  3. Understanding GE Pension Highlights Pension Qualification Service (PQS) Used to qualify for milestones Need 1, 000 hours to qualify for one year Some PQS Milestones 5 years – Vested (also at age 60) 15 years – Eligible for death benefits & or Disability Pension 25 years – Supplemental $400 a month (Age & timing) Some exceptions 1/1/05 Age 55 & 25 Years PQS – May qualify for SEROin event of Lay Off • Definitions Pension Benefit Service (PBS) Your Signup date to current date is used to calculate amount to be received

  4. Makeup of Pension Payments Supplements to Pension Payments Regular $20 a month x PBS until meeting 80% of Social Security Payments Special $400 a month with 25 years of PQS until 80% qualifiedfor Social Security payments Memo Length of payment is subject to date of birth & date retired Basic Or Guaranteed (High consecutive 3 years pay of last 10) Personal Pension Account (PPA) • Effective 1/1/89 Voluntary Pension Account (VPA) • Effective 1/1/91

  5. Contributions to Pension 2012 - 2015 If applicable, PPA, VPA & Supplements In addition, adjustments may be made from time to time (See Next Page) • Basic GE Funding Formula • *PPA 3% over 80K • *VPA 3% up to 80K • *At Retirement Options for PPA& VPA • Lump Sum • Convert to Annuity & add to Pension • Held by GE at Retirement to age 70 ½ with withdrawal privileges • Excellent Savings Accounts with interest income on deferred basis Calculation of Future Pension * * Follow this calculation if employee NOT QUALIFIED for pension update. See pension update if qualifying as of 12/31/10 Page 7 Personal Share 12/31/12 Balance ___________ Formula Calculation (2012-2015) 1.45% x 1st $45K ___________ 1.90% over $45K ___________ TOTAL___________

  6. Your GE Pension Benefits • You are enrolled in the GE Pension Plan • You are not enrolled in the Voluntary Pension Account (VPA) • Enrolling in VPA will add to your pension benefit for retirement. For more information, refer to YourBenefits Handbook. To enroll, choose “Enrollments” on benefits.ge.com or call the GE Benefits Center at 1-800-252-5259, Option 4 Your GE Pension Plan Service as of 12/31/2010 • Your GE Pension Plan benefits are vested. If you leave the Company before retirement, you will retain a non-forfeitable right to pension benefits provided by your own and Company contributions. Your GE Pension Plan Benefits Accumulated through 2010 Payable at age 60

  7. New Pension Data as of 7/1/11 • Annual Average Pay • Highest 3 consecutive yrs. of last 6 yrs. prior to 12/31/10 To qualify as of 12/31/10 • Need 25 yrs. PQS or age 55 with 20 yrs. PQS Guaranteed Pension(point in time) • Highest 3 consecutive pay in last 10 years before retirement See Focus Chart below: Guaranteed Pensions Final Average Compensation Final Average Compensation

  8. Death Benefits • Options available in HR or Benefits Handbook Disability Pension No Reduction • $75 a month supplement until full Social Security retirement benefits • If denied Social Security, greater of $125 a month or $6 a month each year of PQS

  9. Pension Options at Retirement Reductions None , but if retirees live more than five years, no payments to survivor. Five Year Certain Start at 93.5% * 50 % Survivor Start at 90.0 % * 75% Survivor Start at 87.0% * 100% Survivor * Memo: % Reduction dependent on age differences & time of retirement Options

  10. Using Professionals Wisely Know the basics What type of experts do you need Obtain names & locations of candidates Determine whether a Specialistor Generalist Ask for a preliminary meeting Write out questions in advance Have initial discussion Ask about cost and vested interests Obtain client references Ask yourself: Do I feel this person will work well with me

  11. Use the Table below Calculating IRA Minimum Required Distributions Use the table to compute your required minimum distribution. Take the account balance on December 31st of the previous year & divide it by the figure next to your age, or use % column & multiply. If a spouse beneficiary is more than ten years younger than you are, use the joint-life-and -last-survivor table in IRS Pub. 590.

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