MM-04-2001 Retire by zhangyun


									Planning Your Retirement
            hat does retirement mean to you?        REAL LIFE STORIES:
            Does it conjure up visions of
            leisurely travel to the world’s great   Retirement Planning at USC
cities or most isolated mountaintops? Will
your hobbies become the central obsession of
your life—maybe even turn into a small
                                                    Starting Early                                          These Happy, Golden Years                               A Really Good Game Plan
business? Will you spend your time
volunteering to serve the needs of others?
Does the idea of afternoon naps on a shady
porch sound great or terrifying?

Whatever you look forward to after
retirement, planning ahead will make it more
probable and possible that you will have the
resources to spend your time as you choose.
Your participation in USC Retirement Plans
is important to building the financial               Sarah Smith                                             Carolyn Watanabe                                        Derek Wynn
resources you will need. However, they are          Floor Manager, General Books                            Retired July 2005                                       Assistant Coach, Women’s Basketball
                                                    USC Bookstore
only part of the picture. This guide will help                                                                                                                      Jody Wynn
you understand your retirement benefits and                                                                  Carolyn Watanabe is now among the happily               Assistant Coach, Women’s Basketball
                                                    Sarah Smith started working at USC in June 2004         retired. After 20 years working with the USC
how they fit into that larger picture. We’ve         just a few weeks after graduating from USC with a       School for Early Childhood Education, she retired
identified many resources for you to use as          major in English Language and Literature. She is                                                                Derek and Jody Wynn love coaching basketball
                                                                                                            in July from her supervisory position with their
you work toward a retirement that meets your        now a brand new (and very young) participant in                                                                 and love being parents of their toddler Jada. With
                                                                                                            Head Start program. Carolyn retired early to join
                                                    the Faculty and Exempt Staff Retirement Plan.                                                                   recruitment, practice, meetings and family life,
vision of what it should be.                                                                                her husband who retired from his career position
                                                    “When I was in college my parents said their                                                                    they are a very busy couple. Their energy and
                                                                                                            several years ago, but who continues to work
                                                    retirement fund was not what they thought it                                                                    enthusiasm extends even to retirement planning.
                                                    would be. They regretted not taking a serious                                                                   Derek notes, “We’ve been planning for retirement
                                                    interest in their fund earlier on in their marriage,                                                            and putting money away for the future for several
                                                                                                            Carolyn participated in the Faculty and Exempt
                                                    therefore giving it more time to develop.” Sarah                                                                years. When we came to USC a year ago, we
                                                                                                            Staff Retirement Plan. “Where else can you put in
                                                    also anticipates the Social Security system being                                                               thought the plans here were great because of the
                                                                                                            5% and get 10% back?. It’s like free money.” She
                                                    very different by the time she’s ready to retire.                                                               USC match.” They are now participants in both
                                                                                                            was an aggressive investor in earlier years with her
                                                                                                                                                                    the Faculty and Exempt Staff Retirement Plan and
                                                                                                            investments allocated heavily toward the stock
                                                    When Sarah became eligible for the retirement                                                                   the Supplemental Retirement Plan. They met with
                                                                                                            market. As she neared retirement, she worked with
                                                    plan, she decided to participate as soon as possible.                                                           benefits staff several times to enroll, calculate their
                                                                                                            a financial planner to rebalance her investments
                                                    She asked advice from friends about investment                                                                  maximum contributions, and setup their
                                                                                                            more conservatively. Carolyn also participated in
                                                    choices and then met with Marie Manning in the                                                                  investment allocations.
                                                                                                            the Supplemental Retirement Plan and put in the
                                                    Benefits Office to sign up. The university’s              maximum contributions for several years.
                                                    contribution of 10% of salary makes the                                                                         They have “maxed out” their contributions to both
                                                    retirement plan “an opportunity that is just too                                                                plans. According to Jody, “We’re saving as much as
                                                                                                            Carolyn attended the USC Transitions seminar last
                                                    good to miss.” Now she’s enjoying reviewing her                                                                 we can while our daughter is young. We wanted to
                                                                                                            spring and urges everyone to attend as soon as
 USC Retirement                                     quarterly statements from Fidelity and watching         they are invited. “One area that everyone should
                                                                                                                                                                    maximize our contributions now because children
                                                                                                                                                                    get more expensive as they get older. Keeping our
                                                    her money grow.                                         plan ahead for is medical coverage during
 Plans in Brief                                     With almost half a century until retirement, Sarah
                                                                                                            retirement. I’m fortunate because my husband’s
                                                                                                            retirement includes medical benefits. Because USC
                                                                                                                                                                    expenses down now is easier than it will be when
                                                                                                                                                                    she’s a teenager or heading to college.” This
                                                    hasn’t thought a lot about what she will do when                                                                strategy must make Jody’s father (who is a financial
 Non-Exempt Staff Retirement Plan                                                                           provides only a Medicare Supplement, you need to
                                                    she retires. She does know that she will need the                                                               planner) very proud—maximum early
                                                                                                            plan ahead for medical coverage, especially if you
 The Non-Exempt Staff Retirement Plan               resources to continue to enjoy her love of travel.                                                              contributions will have a long time to grow.
                                                                                                            want to retire before 65.”
 provides retirement benefits funded by the
 university for non-exempt employees. The plan                                                                                                                      Jody and Derek hope to be involved in coaching
                                                                                                            She is now relishing the new-found freedom of
 provides lifetime benefits based on the number                                                                                                                      basketball as long as they can. When the day
                                                                                                            retirement and “Just doing whatever I want to do
 of years of eligible service, the employee’s                                                                                                                       comes that retirement is inevitable, they want to
                                                                                                            each day.” The timing of her retirement was
 earnings as a non-exempt employee, and age at                                                                                                                      be prepared and not have to worry about money.
                                                                                                            decided when her husband retired, then lots of her
 retirement.                                                                                                                                                        They hope to spend their retirement years being
                                                                                                            friends—and then a granddaughter was born just
                                                                                                                                                                    with Jada and involved with all the activities she’s
                                                                                                            one year ago. “I take care of my granddaughter
 Faculty and Exempt Staff Retirement                                                                        one afternoon a week and attend ‘Mommy and
                                                                                                                                                                    involved with. Do they think she will follow in
 Plan                                                                                                                                                               their basketball footsteps? “Whatever she wants to
                                                                                                            Me’ exercise classes with her.” Carol participates in
 The Faculty and Exempt Staff Retirement Plan                                                                                                                       do—athletics, art, dance. We want to be there to
                                                                                                            the emeriti center and recently received her USC
 provides the opportunity to build retirement                                                                                                                       support whatever she chooses to do,” says Jody.
                                                                                                            Retiree Gold Card and along with it her e-mail
 income through employee deferral of income                                                                 account. “It works. This week I went to campus to
 and additional contributions by the university.                                                            lunch with friends and parked for free; then went
 Employees are required to contribute 5 percent                                                             to the bookstore and received a 10% discount.”
 of eligible monthly earnings on a pretax basis
 and USC contributes an additional 10 percent.
 Contributions are invested by the employee’s
 choice of five companies selected by the
                                                    Faculty: Your Top 3                                     1. Do I have to negotiate to get a pension?
                                                                                                            You don’t have to negotiate, because USC doesn’t
                                                                                                                                                                    coverage.) You will be covered when you see any
                                                                                                                                                                    doctor who accepts Medicare, and you have no
 university to manage the investment of the
 retirement plan contributions. Retirement          Questions                                               wait until you are about to retire before
                                                                                                            contributing toward your retirement. USC has
                                                                                                                                                                    cost for physician services when you see a USC
                                                                                                                                                                    doctor. Beginning in 2006, USC Senior Care will
 income is based on the amount of funds                                                                     been putting 10% of your salary into your               also provide vision and dental benefits.
 contributed to the retirement account adjusted                                                             retirement account, at a 2-1 match, every month
 by any earnings, expenses, gains or losses.                                                                since you were a newcomer at USC and enrolled in        3. Is retirement all or nothing? Can I stay part of the
                                                                                                            the retirement plan. Talk to the Benefits Office (or      academic community?
 Supplemental Retirement Plan                                                                               look at the TIAA/CREF, Fidelity or Prudential           The Faculty Handbook now provides that emeriti
 The Supplemental Retirement Plan helps                                                                     Web site) to calculate your retirement income, and      faculty are eligible to continue part-time teaching
 employees increase their retirement income by                                                              learn your options on receiving it. (And remember       and research. The Emeriti Center also provides
 voluntarily investing their own pretax                                                                     that you will receive Social Security, and you will     opportunities to mentor, do research, and teach
 contributions in a retirement account.                                                                     no longer be paying Social Security tax or making       through the Emeriti College. And deans often
 Employees decide the amount of their pretax                                                                the 5% retirement contribution.)                        agree to phase retirement over a year or two of
 contribution within IRS limits. Contributions                                                                                                                      part-time work for proportionate compensation.
                                                    Martin Levine                                           2. Do I have to stay working to have USC health
 are invested by the employee’s choice of five
                                                    Vice Provost for Faculty Affairs                        insurance?                                              More information is available on the Faculty Portal
 companies selected by the university to manage
 investments under the Faculty and Exempt                                                                   No more. USC Senior Care is available to all USC        at under the tab “Especially
                                                    From his many talks with faculty who are thinking       retirees age 65 or over, and their spouses and          for” at the link for “Retired/Retiring Faculty.”
 Staff Retirement Plan.
                                                    about retirement, Marty Levine hears three main         domestic partners age 65 or over. It is Medicare        Additional information about these questions is
                                                    questions.                                              supplemental insurance. (By law, such insurance         included throughout this publication. See the back
                                                                                                            comes in standardized packages; USC Senior Care         page (“Resources”) for telephone numbers and
                                                                                                            is a “level J” plan, which has the highest level of     Web addresses.

Start Early,                                 Start Early                                   Participation in USC Retirement
                                                                                                                                                               Get Help
                                                                                                                                                               Choose to Save
Set Goals,                                   Mixed messages. We are bombarded
                                                                                           Non-exempt employees (who are at least 21 years
                                                                                           of age) are automatically enrolled in the Non-
                                                                                           Exempt Staff Retirement Plan after six months of
                                                                                                                                                               All kinds of information and inspiration about
                                                                                                                                                               saving for retirement.

Track Progress                               everyday with hundreds of ways to spend
                                             money. Turn on the television, the radio,
                                                                                           employment and completion of at least 500 hours
                                                                                           of service.                                                         I Started Saving for Retirement Late—How Do I
                                             browse the Internet, walk through a           Faculty and exempt staff (who are at least 21 years       
There are many resources available to
                                             shopping mall or pick up your mail. And       of age) are eligible for participation in the Faculty               This online information provides ideas for catching
help you plan for retirement. No matter                                                                                                                        up and a learning guide about IRAs. From the
                                             then there are the big ticket demands on      and Exempt Staff Retirement Plan after six months
where you turn, you will find that advice                                                   of employment and completion of at least 500                        Prudential home page, choose Retirement Basics.
                                             our income: buying a house or car,
emphasizes three main areas.                                                               hours of service. Participation is mandatory after
                                             paying for a college education, vacations     five years of eligible employment or attaining                       What Every Employee Should Know About
                                             and holidays. So what are the best ways                                                                           Retirement Savings
Start early                                                                                tenure. Don’t wait until participation is mandatory
Starting early means now, ASAP. The          to reconcile those demands with the need      to start. For every pretax dollar that you don’t
                                                                                           invest, you are also losing two dollars from the                    This 7-minute online movie from Fidelity explores
more years you have until retirement the     to begin saving when retirement is the                                                                            how to make the most of your retirement savings
                                                                                           university. That is free money you are giving away!
more time your investments have to grow.     “back-burner demand” on your hard-                                                                                plan and why participating now is so valuable.
There also are ways to catch-up if you       earned dollars?                               Participation in the Supplemental Retirement Plan
                                                                                           can begin at anytime and at any age. You can start                  eTrac
missed earlier opportunities for                                                                                                                     
                                                                                           small. The minimum payroll reduction for the
retirement savings.                          • Make a budget and stick to it. Your         Supplemental Retirement Plan is $25 per month.                      The maximum amount you can contribute each
                                               retirement savings should be a line item    All faculty and staff, full time and part time, are                 year to the USC Supplemental Retirement Plan is
Set goals                                                                                  eligible to participate. Participation can begin or                 available on eTrac. The maximum contribution
                                               in your budget.
Set your financial goals by making a                                                        end at anytime.                                                     listed includes any catch-up provisions for which
                                             • Be disciplined about using credit cards.                                                                        you are eligible. To set up your access to eTrac, you
realistic estimate of how much income
                                             • Get started even if you can afford only a   What if I didn’t start early?                                       will need a copy of your recent pay stub or advice
you will need during retirement and for                                                                                                                        slip. Once you’ve logged in, choose Benefits
                                               small amount. A few dollars invested in                     If you think you have some
how long. The closer you are to                                                                                                                                Inquiry and scroll down to Retirement
                                               your 20’s and 30’s have a long time to                      catching up to do, begin or
retirement the more detailed and accurate                                                                  increase your contributions to the
                                               grow. The single greatest power in
that estimate needs to be.                                                                                 USC Supplemental Retirement
                                               saving money is time, because time                                                                              IRS Publication 590 Individual Retirement Accounts
                                                                                                           Plan. In 2006, participants may           
Track progress                                 allows you to take advantage of                             defer up to $15,000. “Catch-up”
                                               compound interest. Compound interest                                                                            The IRS rules on IRAs in 100 pages of easy
At least once a year, assess your progress                                                 provisions may allow participants who are over age
                                                                                                                                                               reading. On the IRS home page, search for 590 in
toward your financial goals. Tally up your      is earning interest on your interest.       50 or who have 15 years of service to defer even
                                                                                                                                                               forms and publications.
assets and liabilities. Review and
rebalance the types of investments you’re                                                  Find out if you qualify for a Traditional or ROTH
making.                                                                                    IRA. Even if you are participating in a USC
                                                                                           retirement plan, you (or your spouse) may still be
                                                                                           eligible to contribute to an IRA. IRAs (Individual
                                                                                           Retirement Accounts) are savings plans with special
                                                                                           tax breaks that can help you grow your savings for
                                                                                           retirement. Limits on contribution amounts and
                                                                                           tax deductions are based on participation in
                                                                                           employer sponsored retirement plans, age, tax
                                                                                           filing status and income level. Consult your tax
                                                                                           preparer or financial advisor to discuss your                         The Rule of 72
                                                                                           personal situation.                                                  With the magic of compounding at work, you can
                                                                                                                                                                predict how long it will take to double your money. It’s
                                                                                           Use other investments to help you reach your goal.                   called the Rule of 72—you simply divide 72 by the
                                                                                           You can supplement your tax-deferred retirement                      earnings rate on your investment. For instance, at a
                                                                                           plan contributions with money that you invest on                     constant 6% growth rate, your money will double in
                                                                                           an after-tax basis. These investments could include                  approximately 12 years (72 divided by 6).
                                                                                           mutual funds, savings accounts and U.S. savings
                                                                                           bonds, to name just a few.

                                                                                                     Magic of Compound Interest                                                       Amount Invested
                                                                                                                                                                                      Interest Earned

                                                                                                                        $50,000      $49,254
                                                                                            Saved $2,000 per year
                                                                                            from age 40 to age 65

                                                                                                                        $90,000                                                           $247,746
                                                                                            Saved $2,000 per year
                                                                                            from age 20 to age 65

                                                                                                                        $22,000                   $137,557
                                                                                            Saved $2,000 per year
                                                                                            from age 20 through
                                                                                            age 30. Kept money in                                            $159,557
                                                                                            account until age 65.

                                                                                                                    0         $50K      $100K        $150K       $200K      $250K      $300K      $350K

                                                                                            Assumes a 5% annual rate of return compounded monthly. Calculations from the Employee Benefit
                                                                                            Research Institute, “The Magic of Compounding”

  2                                                                                                                                                      UNIVERSITY OF SOUTHERN CALIFORNIA
                                                             Set Goals                                             Setting Goals—Think Income
                                                                                                                   In addition to putting money into savings to
                                                                                                                   prepare for retirement, you also must plan how to
                                                                                                                                                                                Get Help
                                                                                                                                                                                Distribution Options
                                                                                                                   take it out. Because your retirement may last many           A 26-page booklet about distribution options for
                                                             Setting your retirement goals means that              years, once you’ve retired you will need to manage           workplace savings is available on Fidelity’s Web
                                                                                                                   what you’ve accumulated to make sure you have a              site. (Under Quick Links, choose “Retirement
                                                             you must answer some basic questions:                 lasting stream of income.                                    Income” in the Guides/Brochures section) The
                                                             When do you want to retire? How much
                                                                                                                                                                                booklet explains the options you have regarding
                                                             income will you need? How long do you                 Income from USC Retirement                                   workplace savings when you retire. At USC, the
                                                             expect to live after you retire? There are            Plans                                                        workplace savings eligible for these options are
                                                             many resources to help you answer these                                                                            your retirement accounts under either the Faculty
                                                                                                                   USC Non-Exempt Staff Retirement Plan                         and Exempt Staff Retirement Plan or the
                                                             questions. The goal setting tools listed
                                                                                                                   The retirement benefits funded by USC under this              Supplemental Retirement Plan. Investors with
                                                             below will let you test different answers             plan will provide lifetime payments when you                 Fidelity also may use NetBenefits, their advanced
                                                             so you can see how they affect your                   retire. The plan is designed to pay full benefits at          online retirement planning tools.
                                                             retirement goals.                                     age 65. When you retire, you may choose from a
                                                                                                                   variety of annuity options. Options include                  About Income Options
                                                                                                                   straight life, 10-year certain, 50% survivor, and  
                                                             Get Help
                                                                                                                   100% survivor annuities. The age at which you                Information about income options from TIAA-
                                                             Ballpark Estimate                                     retire and the option you choose will determine the          CREF is available online as both an interactive
                                                                           amount of your monthly benefit. You may start                 planning tool and as an Acrobat file to read online
                                                             The Ballpark Estimate is an easy-to-use, one-page     your payments as early as age 55; however, the               or printout. If you have a TIAA-CREF account,
                                                             worksheet that helps you quickly identify             monthly benefit will be reduced. There is no                  they will develop retirement income guidelines for
                                                             approximately how much you need to save to fund       reduction in the monthly benefit for employees                you as you near retirement. From the home page,
                                                             a comfortable retirement. Both an interactive,        who retire after age 60 with 25 years of service.            click on “Retirement Countdown.”
                                                             online worksheet and a copy to printout and           Your spouse’s notarized consent is necessary if you
                                                             complete are available. The worksheet was             select an option that does not provide spousal
                                                             developed by the Employee Benefit Research             benefits. This plan is subject to minimum
                                                             Institute.                                            distribution requirements. You must begin to
                                                                                                                   receive payments by the April following the year
How long will you be retired?                                Retirement Goal Evaluator                             you turn 70½ if you are no longer employed at
The average American retiring at 65 can expect to            The Retirement Goal Evaluator available online at
spend 18 years in retirement.                                the TIAA-CREF Web site is available to anyone         Faculty and Exempt Staff Retirement Plan
                                                             (you don’t have to be an investor with TIAA-CREF      and Supplemental Retirement Plan
A study by TIAA-CREF found the expected length of
                                                             to use it). The short questionnaire lets you set      Distribution options of your retirement account
retirement for their annuitants at age 60 is 25 years for
men and 29 years for women.                                  different retirement ages and income replacement      under these plans provide a broad array of
                                                             targets; then calculates how much you will need to    possibilities. They range from periodic payments
                                                             save each year to reach your target. From the         and lump sum distributions to rollovers to lifetime
                                                             TIAA-CREF home page, choose Retirement                annuities. Review the distribution options available
                                                             Countdown, then Retirement Goal Evaluator.            from the company which is investing your
                                                                                                                   retirement savings. These plans are also subject to
                                                             Retirement Planning Calculator                        minimum distribution requirements. You must
                                                                                      begin to receive payments by the April following
                                                             This online calculator from Prudential provides for   the year you turn 70½ if you are no longer
                                                             a broad look at your current assets and how they      employed at USC.
                                                             will translate into retirement income. From the
                                                             Prudential home page, choose Calculators and
                                                             Guides, then Retirement Planning Calculator. It’s
                                                             available to anyone.

                                                             Retirement Savings Worksheet
                                                             This 2-page worksheet from Fidelity is available to
                                                             printout and complete on your own. Go to
                                                             “Planning” and choose “Manage Your Savings”
                                                             then “Are You on Track.” You will need to do some
                                                             simple math to calculate your retirement goals and
                                                             how much you will need to save each month to
                                                             meet them, so have a calculator handy

                                                            Supplemental Retirement Plan

                                                            Enrollment is Online
                                                            It’s Easy!
                                                            It’s the Only Way to Enroll or Make Changes!           Complete instructions about using the online process are     Even if you’ve not used eTrac before, it’s easy to set up
                                                                                                                   available on the Benefits Web site. Choose Retirement         your access. Just go to and follow the
                                                                                                                   Programs from the home page. Instructions are available      instructions. You’ll want to have a copy of a recent pay
                                                                                                                   for both new, continuing and annual renewal participants     stub or advice slip handy.
                                                                                                                   and the pages link directly to the eTrac enrollment
                                                                                                                   process.                                                     Once you’ve completed your enrollment, you’ll receive an
                                                                                                                                                                                acknowledgement via e-mail. You’ll also be contacted to
                                                                                                                   In mid-October, you’ll be sent a reminder and instructions   provide missing or additional information once your
                                                                                                                   via your USC e-mail account on how to access this online     agreement is reviewed and processed. Finally, you’ll be
                                                                                                                   process. When you log onto eTrac with your password,         notified when your payroll deduction for your 2006
                                                                                                                   you’ll find information about:                                contributions has been set up so you can view it on eTrac.

                                                                                                                   • your individually calculated maximum contribution          If you do not have access to a computer, you may go to
                                                                                                                     limits for 2006                                            your benefits office and use the computers we make
                                                                                                                   • your 2005 contribution amount                              available for public use. You can also use computer labs
                                                                                                                   • the vendors to which you currently direct your             on campus. To use the computers at these facilities, you
                                                                                                                     contributions                                              must present your employee ID card.
                                                                                                                   • a tax-modeling tool to help you calculate the effect
                                                                                                                     increasing your retirement contribution will have on
                                                                                                                     your taxes and net pay

Track                                                 USC Retirement Plans
                                                      Non-Exempt Staff Retirement Plan
                                                      Retirement benefits under this plan are based on
                                                                                                            Social Security
                                                                                                            Social Security provides a base level of
                                                                                                            retirement income. On average, Social
                                                                                                                                                                   Get Help
                                                                                                                                                                   Retirement Plan Investment Companies
                                                                                                                                                                   Participants in the Faculty and Exempt Staff
                                                      your years of service, your earnings as a non-        Security replaces about 40% of income.                 Retirement Plan and the Supplemental Retirement

Progress                                              exempt employee and your age at retirement. For
                                                      an estimated benefit calculation, contact the
                                                      Program Manager for the plan at
                                                                                                            However, the higher your income the
                                                                                                            lower the percentage of income
                                                                                                            replacement will be. The average
                                                                                                                                                                   Plan can get detailed information about their
                                                                                                                                                                   retirement accounts and use the many retirement
                                                                                                                                                                   planning tools available online. Many of the
                                                      or (213) 437-1831.                                    monthly payment received by                            retirement planning tools also are available to non-
                                                                                                            today’s retirees is $955. The                          participants.
To track your progress toward your
                                                      Faculty and Exempt Staff Retirement Plan and          maximum monthly Social
retirement goals, you will need to look at            Supplemental Retirement Plan                          Security retirement benefits is                         Fidelity Investments
four areas:                                           The five investment companies provide                  $1,939 for a worker retiring at age                    Prudential Financial
                                                      participants with quarterly statements of account     65½, the age at which full Social                      SunAmerica    
• USC Retirement Plans                                balances and investment performance. This             Security benefits are paid in 2005.                     TIAA-CREF     
                                                      information also is available online through their    Previous changes to Social Security to                 Vanguard Company
• Personal Savings                                    Web sites. Each quarter, you should review your       address future solvency issues resulted
                                                      statement and your investment allocation. Each        in the gradual raising of the age at which full        Individual Counseling Sessions
• Social Security                                     company provides information (either online or in     benefits can be collected, from 65 in 2002 to 67 by
                                                      printed form) to help you make investment             the year 2027. Today, solvency issues are being        Each of the retirement plan investment companies
• Other Assets                                        decisions that match your investment profile. That     addressed again and may result in changes over the     offers individual counseling sessions to participants
                                                      profile may change over time as you get closer to      next few years. None of the current proposals for      throughout the year. Visit the Benefits Web site
                                                      retirement.                                           change will affect current recipients of benefits or    (choose Coming Events) for a schedule and how to
                                                                                                            “near retirees”—defined as those age 55 and older.      make an appointment.
                                                      Personal Savings
                                                                                                            The Social Security Administration sends you a         Choose to Save
                                                      Personal savings are an important part of reaching    statement each year around your birthday if you
                                                      your retirement goals. These after-tax savings can                                                 
                                                                                                            are over age 25. Review the statement for accuracy,    This site includes many online calculators to
                                                      be directed into savings accounts, U.S. savings       how retirement age affects benefits, and use the
                                                      bonds, stocks and bonds, annuities or in Individual                                                          answer important questions about your progress,
                                                                                                            estimated income in your retirement planning. You      including “Am I saving enough?” and “How much
                                                      Retirement Accounts. Review your balances and         also can estimate your retirement benefit and stay
                                                      your monthly savings when you review your                                                                    can I invest before taxes each year?” Gather your
                                                                                                            up-to-date on changes on the Social Security           numbers and plug-in the information online. The
                                                      retirement plan each quarter. Remember that these     Administration Web site at
                                                      other forms of savings are a part of your                                                                    calculations are done for you.
                                                                                                            The 2005 Trustees report explains the solvency
                                                      investment allocation picture.                        issues pushing changes to social security in detail    Social Security
                                                                                                            and summarizes those issues in an easy-to-read
                                                                                                            publication titled “The Future of Social Security.”
                                                                                                                                                                   Calculate your estimated benefit online, what
                                                                                                                                                                   happens if you work after retirement and other
                                                                                                            Other Assets                                           factors that may affect your retirement benefit. If
                                                                                                            Other sources of retirement income include             you have a spouse who will receive a government
                                                                                                            working in retirement or tapping into home             (federal, state or local) pension, the site includes
                                                                                                            equity. More than 70% of retirees work either to       information about the Government Pension Offset
                                                                                                            supplement their income or for personal                and Windfall Elimination Provisions. Calculators
                                                                                                            fulfillment during the first 10 years of retirement.     are available to estimate the impact of those
                                                                                                            Almost half of retirees move to a smaller house or a   provisions on your spouse’s social security benefits
                                                                                                            lower cost living area during the first 10 years of     (based on his or her own earnings or yours).
                                                                                                            retirement. In Southern California, home equity is
                                                                                                            a major part of most households’ net worth. Aside      Estimating Your Home’s Value
                                                                                                            from selling a home to tap into that equity, reverse
                                                                                                            mortgages are available to borrow against the value    Enter your address and ZIP code and get
                                                                                                            of the home.                                           comparable home sales in your neighborhood.
                                                                                                                                                                   From the Bank of America home page, choose
                                                                                                                                                                   Loans and Home Buying Overview, then “Real
                                                                                                                                                                   Estate Center–Find out how much your home is

Four Checklists for Retirement                        5 to 10 years until retirement                            Use the services available to you for free from        Contact your benefits office 3 months before
                                                          Time for a thorough review of your financial           the investment companies managing your                 you retire. They can help you with both your
Planning                                                  situation.                                            retirement accounts. They can provide                  retirement and medical benefits as well as your
                                                          Do a careful analysis of your income needs            extensive information about both investing             decisions about continuing other types of
Throughout Your Working Career                            during retirement.                                    during retirement and income distribution              insurance.
   Create a household budget that includes a line         Determine whether you’re on track to meet             options.                                               Prepare and send your resignation letter to
   item for retirement savings.                           your retirement savings goals.                        Attend an individual counseling session with a         your dean or supervisor.
   Set an estimated retirement goal.                      –If you’re on track, keep up the good work.           representative from your retirement investment         –Faculty should, preferably, send this letter of
   Invest your retirement savings for long-term           –If you’re likely to fall short, make changes—        company.                                               intent early in the fall if they plan to resign in
   growth.                                                delay retirement, use catch-up provisions to          Start the decision making process on whether           the spring. This will give your department
   Participate in the retirement plans available at       put away more pre-tax dollars; make additional        or not you will be relocating and selling your         time to find a replacement for the next
   USC.                                                   investments with after-tax money.                     home when you retire.                                  academic year.
   Keep track of retirement earnings from both            Review your insurance needs and existing              Attend the annual Transitions seminar at USC.          –Staff should send this letter two to four weeks
   current and previous employers (consider               coverage.                                             Review your will, trust or estate plan, if             prior to their retirement date. Generally, the
   consolidating your assets if possible).                Attend an individual counseling session with a        applicable.                                            larger your responsibilities the more notice you
   Read and save all communications about your            representative from your retirement investment                                                               should give that you will be leaving.
   retirement savings (from USC, investment               company.                                          Less than 1 year away                                      Review your vacation accruals. Unused
   companies, and the Social Security                     If you’ve accumulated sizeable assets, consider       Review your income needs during retirement.            vacation days will be included in your final
   Administration)                                        estate planning.                                      Decide how you want to receive your income             check.
   Review your asset allocation at least once a                                                                 from your retirement plan                              Review your most recent pay stub or advice
   year and rebalance your portfolio.                 1 to 5 years until retirement                             –Participants in the Non-Exempt Retirement             slip or log on to eTrac for a detailed list of
   Review your insurance needs and existing               Tighten up your estimate of expenses during           Plan should contact the program manager to             your deductions. You’ll need to make
   coverage at least once a year.                         retirement.                                           discuss the income options available to them at        arrangements to continue deductions after
   Make sure that the beneficiary designations on          Explore how you will receive your retirement          least 3 months before they retire. Once retired,       your retire for deductions such as USC Federal
   your retirement savings and insurance policies         income. Learn about income annuities and              participants (and spouses, if married) must set        Credit Union, School of Dentistry payment
   are up-to-date.                                        retirement income management tools from               up an appointment to complete the necessary            plans; retirement plan loans and ticket office
   Evaluate your need for a will or trust and keep        investment companies.                                 paperwork to begin pension payments.                   purchases.
   them up-to-date.                                       Carefully review your estimate of benefits from        –Participants in the Faculty and Exempt Staff          Set aside transition funds in a savings or
   Evaluate the need to hire a financial planner.          the Social Security Administration.                   Retirement Plan and the Supplemental                   checking account to take care of any
                                                          Check to see if you’re still on track toward          Retirement Plan should request information             unexpected expenses or delays in expected
                                                          reaching your retirement goal.                        from their investment companies about                  retirement payments.
                                                          If you’re not on track, maximize all tax-             income options at least 6 months before they
                                                          advantaged savings and also save more after-tax       retire. Paperwork will need to be completed to
                                                          dollars.                                              start payments.
                                                          Consider hiring a financial planner to help.           Review your medical coverage and how you
                                                          Re-evaluate the asset allocation of your              will obtain medical coverage when you retire.
                                                          investments as you near retirement.

  4                                                                                                                                                            UNIVERSITY OF SOUTHERN CALIFORNIA
                                                      Don’t delay enrollment.                                 Retirement counselors from each of our five
                                                                                                                                                                    How to choose a financial
                                                                                                              retirement investment companies can provide you
                                                      You are eligible to participate in the Faculty and
                                                      Exempt Staff Retirement Plan upon meeting
                                                                                                              with educational tools to help you make a decision    planner
                                                                                                              based on your goals. The retirement counselors are
                                                      eligibility requirements. If you do not wish to                                                               As you work on tracking progress toward your
                                                                                                              on campus at least once a month. Check the
                                                      begin participating right away you must complete                                                              retirement goals, you may decide that you want
                                                                                                              “Coming Events” section of the Benefits Web site
                                                      a waiver stating so. Participation is mandatory after                                                         guidance from a professional. Stockbrokers,
                                                                                                              for dates, locations and phone numbers to call to
                                                      five years of eligible employment or attaining                                                                 insurance agents, and financial planners can
                                                                                                              set up an appointment.
                                                      tenure. But don’t wait until participation is                                                                 assist you in developing a comprehensive
                                                      mandatory to start.                                                                                           investment plan. But finding a qualified
                                                                                                              “Take positive action to assure your investment fits
                                                                                                                                                                    professional with whom you are comfortable is
                                                                                                              your retirement goals. All employees, whether new
                                                      Both exempt and non-exempt employees can begin                                                                not easy. The following recommendations from
                                                                                                              participants or long-term participants, should
                                                      participation in the Supplemental Retirement Plan                                                             the Employee Benefit Research Institute will
                                                                                                              review their investment allocation and retirement
                                                      immediately upon hire or at any time during                                                                   help you identify several good candidates and
                                                                                                              goals at least once a year.”
Awilda P. Bregand                                     employment. Non-exempt employees need to                                                                      interview each before making your selection.
                                                      evaluate whether their benefits from the Non-
Director, USC Benefits Administration
                                                      Exempt Staff Retirement Plan alone will meet their
                                                                                                              Don’t lose touch with USC.                            You may begin by asking family and friends for
                                                      retirement income needs.                                                   Former employees of USC who        recommendations. You can call or visit a local
What Not to Do                                        Awilda notes, “Too many people put participation
                                                                                                                                 were participants in the Non-
                                                                                                                                 Exempt Staff Retirement Plan
                                                                                                                                                                    financial services firm to request information.
                                                                                                                                                                    Attend a free investment seminar given by a
“Too many people don’t do their homework.” In         off because they think they can’t afford their                             may have retirement benefits        stockbroker, insurance agent, or a financial
her 20 years in benefits administration, Awilda        contribution or think they won’t be here long                              available when they retire.        planner. If one of the speakers looks like a good
Bregand has seen too many people who believe          enough.” The pretax deferral helps make it                                 “Former employees need to keep     candidate, call him or her for an interview.
retirement is too far away to worry about. Then       affordable. The immediate doubling of your              USC informed of their current address so we can
when it’s 5 to 10 years away, they suddenly           money (with the USC 10% contribution to the             reach them with information about any retirement      Once you complete your investigation, narrow
discover they haven’t been saving enough. Awilda      Faculty and Exempt Staff Retirement Plan) makes         benefits they have.” If you leave USC with an          your list of potential candidates to those you
cautions “Don’t let the delusion that retirement is   it an investment that can’t be beat. Even if            accrued benefit with an actuarial value of more        wish to interview. Some of the questions you
so far away keep you from starting retirement         someone is at USC for just a few years, the money       than $5,000 you will be eligible for benefits when     should ask are listed below. Don't be shy! A
planning early.” As director of USC Benefits           can add up to a substantial amount. Upon leaving        you retire (as early as age 55 with a reduction in    good professional understands the selection
Administration, Awilda spends much of her time        the university the employee has several options—        monthly benefit). If your actuarial value at           process and will answer your questions fully and
planning how the university provides                  allow the money to remain invested as it is, request    termination is less than $5,000, you will need to     honestly. You may want to ask the candidates to
administrative services related to all benefits        a rollover to another qualified retirement plan, or      take action regarding your benefit. You may take a     respond to these questions in writing before your
programs, including retirement plans.                 take a lump sum distribution (there are significant      lump sum distribution or rollover the money into      personal interview. Always conduct a personal
                                                      tax implications for distributions).                    another qualified plan or IRA. If you do not take      interview to make sure you are comfortable with
                                                                                                              action, we will rollover your money into an IRA.      your final selection (in other words: you feel you
                                                      Don’t be complacent—learn to                                                                                  will work well together—remember, this will be
                                                                                                              The university maintains your eTrac account after     a long-term relationship).
                                                      put your money to work.                                 you leave USC (if you set up your login while
                                                      When an employee becomes eligible to participate        employed) until April 1 of the following year to      Questions to ask:
                                                      in the Faculty and Exempt Staff Retirement Plan,        allow you to update your address, if necessary. You   • What is your area of expertise?
                                                      the benefits office sends the eligible employee           also can update your address by sending e-mail
                                                      information on what they need to do to enroll.          ( or a letter to USC Benefits          • What is your educational background?

  “Too many people                                    Awilda advises eligible participants “Don’t make
                                                      the mistake of not responding.” You must respond.
                                                                                                              Administration. As a qualified plan we are required
                                                                                                              to notify the Social Security Administration of all
                                                                                                                                                                    • What financial planning designations have you
                                                                                                              participants’ estimated benefits. They in turn will
  put participation                                   If you do not wish to participate when you first
                                                      become eligible, but would rather wait for the five      notify you to contact USC when you apply for          • What further education in financial planning do you
                                                                                                                                                                      plan to pursue?
                                                      year mandatory enrollment period you must tell us       Social Security benefits.
  off because…”                                       so by completing the appropriate form. No
                                                                                                              Former employees of USC who are participants in
                                                                                                                                                                    • Are you a member of any professional financial
                                                      response means you are automatically enrolled in                                                                planning association?
                                                      the plan and once enrolled always enrolled.             the Faculty and Exempt Staff Retirement Plan or
                                                                                                                                                                    • How long have you been offering financial planning
                                                      At the same time you are completing your                the Supplemental Retirement Plan will continue to
                                                      enrollment forms you must also select the funds in      receive regular statements from their investment
                                                      which to invest your money. Employees are offered       company. Address changes should go directly to        • Will you provide references?
                                                      a broad array of available investment options. If       the investment company.
                                                                                                                                                                    • Have you ever been cited by a professional or
                                                      you do not complete the appropriate fund                                                                        regulatory governing body for disciplinary reasons?
                                                      enrollment forms you will be defaulted into a
                                                      money market fund. Returns for the money                                                                      • In the last year, how many clients have stopped using
                                                                                                                                                                      your services? Why?
                                                      market fund may be significantly lower than other
                                                      available fund choices. Picking investment options                                                            • Do you do the work or will I be turned over to
                                                      can be daunting so plan ahead and meet with one                                                                 another employee of your firm?
                                                      of our retirement counselors on campus.
                                                                                                                                                                    • What is your approach to saving and investing?
                                                                                                                                                                    • Will you provide an individualized financial plan? Can
                                                                                                                                                                      I look at a recent example of a plan prepared for
                                                                                                                                                                      someone in similar financial circumstances?
                                                                                                                                                                    • What kinds of communications can I expect from you
                                                                                                                                                                      on an ongoing basis (account statements, newsletters,
  The example below shows how skipping just one year of saving $3,000 can                                                                                             etc.)?
  affect your long-term retirement savings.                                                                                                                         • How often will you review my portfolio?
                                                                                                                                                                    • How are you compensated for the services you
                                                                                                                                                                    • How are fees calculated?
                                                                                                                                                                    • On average, how much can I expect to pay for your
                                                                                                                                                                    • What do I receive in return for that fee?
                                                                                                                                                                    • What, if anything, do you expect of me during our
                                                                                                  Assumptions: This hypothetical example assumes
                                                                                                  annual $3,000 workplace savings contributions
                                                                                                  are made on January 1 each year beginning at
                                                                                                  the specified age and continuing until age 70.
                                                                                                  Assumes annual rate of return of 8%. Assumes
                                                                                                  annual tax-deferred compounding in a workplace
                                                                                                  savings plan. Final account balances are prior to
                                                                                                  any distributions and taxes may be due upon
                                                                                                  distribution. This hypothetical example is for
                                                                                                  illustrative purposes only and does not represent
                                                                                                  the performance of any security. From Fidelity
                                                                                                  Investments at

Health Care during Retirement                              Medicare                                                Access to Your Retirement Funds                              Hardship Withdrawals
                                                                                                                                                      There are many limitations on hardship
Planning for your health care costs is an important                                                                While Working                                                withdrawals from your retirement accounts. You
part of your retirement planning. Eligibility for          Generally, people who are over age 65 and
USC health benefit programs ends when your                  receiving Social Security payments automatically        Borrowing Money from Your Retirement                         may request a withdrawal limited to your principal
employment with USC ends, even if you are                  qualify for Medicare. There are two parts to            Account                                                      contributions but not any earnings or university
retiring. Your coverage ends on the last day of the        Medicare: Hospital Insurance (sometimes called                                                                       contributions. To be eligible, you must first exhaust
                                                                                                                   Although both the Faculty and Exempt Staff
month in which you terminate. At that time,                Part A) and Medical Insurance (sometimes called                                                                      the loan provisions of your plan. The amount you
                                                                                                                   Retirement Plan and the Supplemental Retirement
depending on your age, you will need to enroll in          Part B).Part A helps pay for inpatient hospital care,                                                                can withdraw may also be limited by the
                                                                                                                   Plan include loan provisions, borrowing from your
either COBRA or Medicare. If you are eligible for          skilled nursing care, and other services. Part B                                                                     investment manager.
                                                                                                                   retirement account may not be such a good idea.
Medicare, you should enroll in Parts A, B and D            requires payment of monthly premiums ($78.20 in         No more than two loans may be initiated within
three months prior to termination to ensure no             2005; adjusted annually) and helps pay for such                                                                      A financial hardship, as defined by the IRS, is an
                                                                                                                   any 5-year period.
gap in your coverage. If you are not eligible for          items as doctor's fees, outpatient hospital visits,                                                                  immediate and heavy financial need arising from:
Medicare, you may elect to continue your coverage          and other medical services and supplies.                The following are some excellent reasons from                • Tax-deductible medical expenses, not covered by medical
through COBRA for up to 18 months by paying                                                                        Prudential about why borrowing money from your                 insurance, incurred by you, your spouse, or any of your
the full premium plus a 2% administrative fee.             Beginning January 1, 2006, new Medicare                 retirement account is a bad idea.                              dependents;
Rates for COBRA coverage after termination of              prescription drug plans will be available to people
employment are available on the benefits Web site           with Medicare. Insurance companies and other            • You are risking your financial future.                      • Costs directly related to the purchase of a primary
(from the home page, choose forms; scroll down to          private companies will work with Medicare to offer        The money in your account is earmarked for your              residence (excluding mortgage payments);
Health and Welfare then click on “Cashpay Rates            these drug plans. They will negotiate discounts on        retirement years. If you borrow money from your
and COBRA rates).                                          drug prices. Medicare prescription drug plans             account, you may put yourself on very shaky financial       • Payment of tuition, related educational fees and room
                                                           provide insurance coverage for prescription drugs.        ground when it's time to retire.                             and board expenses for the next 12 months of post-
Retiree Health Stipend                                     Like other insurance, if you join you will pay a                                                                       secondary education for you, your spouse or
                                                                                                                   • You repay your loan with after-tax dollars.                  dependents; or
At the discretion of the Board of Trustees, the            monthly premium (generally around $35 in 2006
                                                                                                                     Unlike the pre-tax contributions to the program, the
university may offer a retiree health stipend to           and adjusted annually) and pay a share of the cost        money you use to repay your loan is deducted from your     • Payments necessary to prevent eviction from your
eligible retirees. Currently, to qualify a retiree must    of your prescriptions. Costs will vary depending on       paycheck using after-tax dollars which will be taxed         primary residence or foreclosure of the mortgage on
have worked for fifteen years in a full-time,               the drug plan you choose.                                 again when you eventually withdraw the money in              your principal residence.
benefits-eligible staff or faculty position, have                                                                     retirement. DOUBLE TAXATION!
attained age 65, and be fully separated from service       The Medicare Web site includes comprehensive                                                                         Federal income tax of 10 per cent will be withheld
with the university on or before the end of the            information about eligibility and benefits.              • The money that you borrow is not working for               from the amount withdrawn and penalties will
                                                                                                                     your financial future.
prior fiscal year. The continuation of this stipend is                                                                                                                           apply if you are under age 59½. You must apply
                                                                                                                     If the money you borrow from your account was
reviewed each fiscal year and is subject to change at                                                                 invested in equity or bond funds, you may lose out on
                                                                                                                                                                                for a hardship withdrawal through your benefits
anytime. The annual stipend was $600 in 2005.                                                                        investment earnings if the fund(s) in which you were       office and submit documentation of your financial
Questions regarding eligibility should be directed                                                                   invested rise in value while your money is out of your     hardship as well as your spouse’s notarized consent.
to the Benefits Administration Office at                                                                               account. And you can never recover that loss.
(213) 437-1839.                                                                                                                                                                 If You Leave USC before Retirement Age
                                                                                                                   • Other loan options have tax advantages that your
                                                                                                                                                                                Non-Exempt Staff Retirement Plan
USC Senior Care                                                                                                      retirement program can't offer.
                                                                                                                     The interest you pay on a home equity loan, for example,   If you have satisfied the vesting requirement and                                                                                                                                             the (actuarial) present value of your benefit is less
                                                                                                                     may be tax deductible. The loan interest you pay when
USC Senior Care is a Medicare supplement                                                                             you borrow from your retirement program isn't. There       than $5,000, you may either receive a lump sum
program for former employees of USC. The                                                                             are so many ways to borrow money that it doesn't make      payment or roll the benefit over to an IRA or your
program fills gaps in Medicare coverage by                                                                            sense to consider your retirement program as a primary     new employer's retirement plan. If the present
providing supplemental payments on Medicare                                                                          source for a loan.                                         value is more than $5,000, you cannot receive
hospital coverage, and no deductibles or                                                                                                                                        payment or rollover the benefit but will receive a
co-payments for health care services provided by                                                                                                                                lifetime annuity benefit at retirement. Be sure you
USC physicians.                                                                                                                                                                 keep us informed of your current address so you
                                                                                                                                                                                will receive your benefits when you’re eligible. You
                                                                                                                                                                                must begin to receive payments by the April
With the advent of Medicare Part D, USC Senior                                                                                                                                  following the year you turn 70½ if you are no
Care will no longer provide prescription drug                                                                                                                                   longer employed by USC. Call (213) 437-1831 for
benefits effective January 1, 2006. The Centers for                                                                                                                              information.
Medicare and Medicaid services (CMS) have
clearly defined guidelines that do not enable USC                                                                                                                                Faculty and Exempt Staff and Supplemental
Senior care to continue to provide pharmaceutical                                                                                                                               Retirement Plans
benefits. However, Senior Care is pleased to                                                                                                                                     Contact your investment company or your benefits
announce the addition of dental and vision, two                                                                                                                                 office to discuss options regarding your retirement
benefits that were formerly not provided under                                                                                                                                   account. You may leave these funds in your USC
Senior Care. In addition, Senior Care premiums                                                                                                                                  retirement account or you may be able to rollover
will be significantly lower in 2006.                                                                                                                                             funds to your new employer’s retirement plan or
                                                                                                                                                                                into a rollover IRA. If you leave the funds in your
                                                                                                                                                                                USC retirement account, you must begin to
Those eligible for USC Senior Care include USC
                                                                                                                                                                                receive payments by the April following the year
faculty and staff retirees age 65 and over. Spouses
                                                                                                                                                                                you turn 70½ if you are no longer employed by
or registered domestic partners also have access to
                                                                                                                                                                                USC. Call (213) 437-1835 or 437-1821 for
the plan. All plan participants must be enrolled in                                                                                                                             information.
Medicare parts A and B. For retirees who receive a
health stipend from the university, participation in
USC Senior Care will not affect the stipend. For
more information, visit the USC Senior Care Web
site or call 1-800-USC-CARE and ask for a USC
Senior Care representative.

                              Why are there so many different names for our retirement plans?
                              During their many years of existence, our
                              retirement plans have changed names. So
                              when talking to people on campus you may
                              hear other names crop up (or abbreviations     Plan Name                                   Internal Revenue Code                  Old and Alternate Name                      Type of Plan
                              of prior names, which is even more
                                                                             Non-Exempt Staff Retirement Plan            401 (a)                                Support Staff Retirement Plan, SSRP         Defined Benefit
                              confusing). These other names sometimes
                              appear on official plan documents or on         Faculty and Exempt Staff Retirement Plan    401 (a) USC contribution               Basic Retirement Plan                       Defined Contribution
                              investment company information. Also, each
                              of the retirement plans is qualified (for tax                                               403 (b) Mandatory Employee             Tax Deferred Annuity Plan                   Defined Contribution
                              deferral) under certain sections of the                                                            Contribution
                              Internal Revenue Code. Plans are often         Supplemental Retirement Plan                403 (b)                                Tax Deferred Annuity Plan                   Defined Contribution
                              referred to by these numbers. The third
                              variant that you will frequently hear refers
                              to the two broad categories of retirement
                              plans: defined contribution and defined
                              benefit. Here’s a chart that should help.

   6                                                                                                                                                                          UNIVERSITY OF SOUTHERN CALIFORNIA
Protecting Your Retirement                               Long Term Care Insurance
                                                         Roughly 50% of Americans now turning age 65
Savings                                                  will be admitted to a nursing home at some point                                      in their lives. And nursing home care is expensive.
                                                         Estimates show that one year of such care ranges
                                                         between $33,000 to over $91,000. USC
Disability Insurance                                     employment provides you with the opportunity to
What would happen to your retirement planning if         participate in Long Term Care Insurance from
you could not work because of a disabling injury         CNA Financial Corporation. You pay the full cost
or illness? Disability benefits replace part of your      of the insurance but at group rates. Benefits from
income if an injury or illness prevents you from         this program help pay the cost of nursing home
working. Disability plans at USC are explained on        care, convalescent care, or home health care for
the Benefits Web site and at                              patients requiring special care due to illness, injury,                            or the natural aging process. This includes expenses
                                                         not normally covered by Medicare, Medicaid, and
Life Insurance                                           most other medical insurance policies. Costs for
Even though you have a plan for retirement savings       coverage are based on your age at the time you first
in place, the unexpected can prevent you from            enroll and will not increase solely due to your age.
reaching your goals. You can help protect your           Parents and grandparents of eligible employees and
loved ones from financial problems through life           their spouses or domestic partners also may
insurance, which pays a pre-determined amount to         purchase this insurance subject to the vendor’s
your beneficiaries in the event of your death (there      eligibility requirements.
is no income tax liability to the beneficiary). Many
factors go into determining the amount of life           Cancer Expense Protection Insurance
insurance you need, including the age of your            This insurance provides direct cash payments to
dependents, existing savings and the need to             the insured who is diagnosed with cancer. It also
replace future retirement savings or benefits.            pays for several types of expenses associated with
                                                         the treatment of cancer. These benefits are paid
When was the last time you reviewed your                 regardless of any other insurance you may have.
beneficiary? Log onto eTrac and see who is listed as      AFLAC Cancer Expense Protection Insurance is
your beneficiary for life insurance. Does it say “No      available at group rates through USC.
information available”? If so, that means it’s time
to update your beneficiary. You may download the          For more information about any of these types of
update form from the Benefits Web site.                   insurance, contact your benefits office.

The life insurance available through USC is term
life insurance, which means you have the insurance
during the time that premiums are paid. USC pays
for a basic amount of life insurance with
Prudential Life Insurance Company and you may
purchase additional insurance for both yourself and
your eligible dependents.

Retirement Planning Glossary

Annuity A contract or agreement providing for            Guaranteed Period A minimum payment                       Single-Life Annuity An annuity that guarantees
the payment of a sum of money at regular                 period during which income will be paid even if           lifetime income for one person only.
intervals.                                               the annuitant (and annuity partner, if any) dies.
                                                         Payments continue to the beneficiary until the end         Traditional IRA (Individual Retirement
Asset Allocation How you divide your                     of the guaranteed period.                                 Account) Provides the opportunity to make tax-
investments among different asset categories.                                                                      deductible contributions to a retirement account
                                                         Mutual Fund Pool of money from multiple                   outside of an employer’s plan.
Beneficiary The person, trust, institution or             investors. Professional money managers use the
estate named to receive death benefits, if any, from      pool of money to buy individual securities such as        Two-Life Annuity An annuity that guarantees
insurance or annuity contracts.                          stocks, bonds, and short-term investments in              lifetime income for two people.
                                                         accordance with the fund’s investment objective.
Defined Benefit A retirement plan offering a               However, rather than owning the securities directly,      Vested An employee’s right to receive a present or
guaranteed stream of monthly income, based on a          the mutual fund investors own shares in the fund.         future pension benefit is vested when it is no
formula typically tied to the participant’s                                                                        longer contingent upon remaining in the service of
compensation and years of service.                       Rebalancing Since investments grow at different           the employer.
                                                         rates over time, an asset allocation can drift out of
Defined Contribution A retirement plan that               balance. This drift can increase the likelihood that
provides benefits based solely on the amount              your investments will not meet your expectations.
contributed to the participant’s account adjusted        Rebalancing is the process of returning your
by any income, expenses, gains and losses.               portfolio to its proper allocation by shifting money
                                                         among asset classes.
Diversification of Assets One of the most
basic strategies for reducing investment risk,           Rollover An employee’s transfer of retirement
diversification is the strategy of investing in a broad   funds from one retirement plan to another plan of
range of stocks and/or bonds, or spreading your          the same type or to an IRA, or from one IRA to
investment across the securities of different            another, without incurring a tax liability. A rollover
countries, industries, or companies. In this way,        can be made directly between carriers. Or, you can
potential losses in one area may be offset by            elect to receive the distribution and the rollover
potential gains in others.                               must be made within 60 days of receiving the cash
                                                         distribution. The law requires 20% federal income
Fixed Annuity A traditional insurance                    tax withholding on money eligible for rollover if it
investment vehicle, often used for retirement            is not moved directly to the second plan or
accounts, that guarantees principal and a specified       investment company.
interest rate and may also offer dividends.

RESOURCES                                            Using the Investment Company                                 Prudential
                                                                                                                                                                             Choose to Save Program
                                                     Web Sites                                                    The Prudential Web site includes retirement      
USC Benefits Administration                           The investment companies that manage the                     information and planning tools available to all            This Web site is part of an educational outreach
                                                     retirement accounts under USC retirement plans               Web site visitors. To login to information about           program to educate Americans about the need to
Although all benefits staff can answer                have extensive retirement planning tools on their            your own account, you need to enter your account           plan and save for long-term personal financial
general questions about your USC                     Web sites. Explore these sites and find the                   number and set up a PIN number. Once you’re                security. The program was developed by the
retirement plans, several specialists are            resources you are most comfortable with. Many of             logged on, you can explore an Information Center           Employee Benefit Research Institute and the
assigned to help you with more complex               these tools are available to anyone. Additional              (USC retirement plan rules), detailed information          American Savings Education Council. The Web
                                                     services and planning tools are usually available to         about your account balance and investments, and            site includes an extensive set of online calculators
questions and procedures.                            plan participants who register or login to their             many planning tools and calculators.                       that cover not only retirement planning, but all
                                                     account. The advantage of being logged into your             Short online courses are available to Prudential           types of financial planning from buying an auto to
                                                     account is that information on your account                  investors, which cover How to Choose                       credit card debt and home mortgages.
                                                     balances is already included when you use the                Investments, Understanding the Value of Your
                                                     calculators or other planning tools.                         Pension Plan, Basics of Estate Planning,                   Individual Counseling Sessions
                                                                                                                  Consolidating Your Retirement Savings, and
                                                     If you don’t have access to the Internet from your           Distribution Options.                            
                                                     home or workplace, you are welcome to visit your                                                                        Each of the retirement plan investment companies
                                                                                                                  Prudential names for your retirement accounts
                                                     Benefits Office to use these online retirement                                                                            offer individual counseling sessions to participants
                                                                                                                  • USC Basic Retirement Plan–your contributions to the      throughout the year. Visit the Benefits Web site
                                                                                                                    Faculty and Exempt Staff Retirement Plan
                                                                                                                                                                             (choose Coming Events) for a schedule and how to
                                                                                                                  • USC Defined Contribution Plan–USC contributions to the
                                                     Fidelity Investments
                                                                                                                    Faculty and Exempt Staff Retirement Plan
                                                                                                                                                                             make an appointment.
                                                                                 • USC Supplemental Retirement Plan
Teri Aparicio                                        The Fidelity Web site includes several retirement            You will need to total your balances to use the
                                                                                                                                                                             Transitions Program
Program Manager                                      planning tools available to all visitors to the site. If     planning tools.                                            The Transitions Program is an intensive two days
Non-Exempt Staff Retirement Plan                     you’re a Fidelity investor, you can login and get                                                                       spent exploring both financial planning and other
(213) 437-1831                                       detailed information about your retirement                   AIG SunAmerica                                             issues surrounding retirement. Presented by USC                                     accounts and use their portfolio analysis tools. The                                         Benefits Administration and the Emeriti Center,
Teri Aparicio is experienced in helping employees    Retirement Check Up will give you an estimate of             The AIG SunAmerica Web site includes basic                 those eligible to attend will receive an invitation in
though all phases of the Non-Exempt Staff            retirement income based on your current balances             product information and an assortment of                   the early spring. Separate programs for the Health
Retirement Plan. She calculates benefits, projects    in Fidelity accounts. The check up will take you             retirement planning tools. For account                     Sciences and University Park campuses are held in
anticipated benefits, reviews distribution options    through a series of questions about your retirement          information, participants should contact customer          April each year.
with participants, and signs final distribution       goals and develop an Action Plan based on your               service at (800) 842-2776.
documents.                                           retirement goals and your current retirement
                                                     savings. Fidelity investors can use Fidelity
                                                                                                                                                                             Emeriti Center
                                                     Retirement Income Advantage, a new set of                                          
                                                     products, tools and services designed to help plan,          In addition to a wealth of retirement planning             The Emeriti Center at the university was
                                                     invest and manage income during retirement.                  tools, the TIAA-CREF Web site features Webcasts            established in 1978 to provide service and support
                                                     Their series of online seminars covers such topics           on retirement topics. The 15-minute Webcasts               for faculty and staff during retirement. It offers
                                                     as Determining Your Retirement Savings Needs                 include seminars for new investors and for those           cultural, educational, and service opportunities for
                                                     and Evaluating Investment Options.                           5-10 years from retirement and many others. You            retirees, and advocates for retiree benefits,
                                                     Fidelity names for your retirement accounts                  need a high speed Internet connection and                  opportunities and recognition. Seminars on
                                                     • USC 403B TDA Plan–your contributions to the Faculty        Explorer 5.0 or higher to watch. And don’t let the         retirement and pre-retirement issues are offered
                                                       and Exempt Staff Retirement Plan and the Supplemental      intro music discourage you, the presentations are          annually. Videotaped interviews record USC's
                                                       Retirement Plan, including rollovers from previous         excellent. When you login as a TIAA-CREF                   living history. A Retiree Gold Card is issued to a
                                                       employers                                                  participant, you can check the daily balances of           retiree who has worked at USC for at least ten
                                                     • USC 401 (A)–USC contributions to Faculty and Exempt        your retirement accounts and review detailed               years in a benefits-eligible staff or faculty position
                                                       Staff Plan                                                 information about your investment allocation.              and who is age 55 or older when he or she leaves
Marie Manning
                                                     • Rollover IRA–any contributions you have in your own                                                                   employment at the university. Among the many
Retirement Specialist                                  IRA set up with Fidelity                                   TIAA-CREF names for your retirement accounts
                                                                                                                                                                             perquisites available to a Gold Card-eligible retiree
Faculty and Exempt Staff Retirement Plan                                                                          • Your accounts are listed by each of your employing
(213) 437-1835                                                                                                                                                               are lifetime courtesy parking, USC e-mail account,
                                                                                                                    institutions and contract numbers.                                                                                                                                                             listing in the USC directory, free or discounted
Marie Manning will answer questions and assist                                                                    Vanguard Company
                                                                                                                                                                             admission to selected cultural events, continuation
you with the various procedures related to the                                                                                                                               of many faculty/staff privileges and discounts. The
Faculty and Exempt Staff Retirement Plan or the                                                                                                                              Emeriti College provides opportunities to mentor,
                                                                                                                  To log in for information about your retirement            do research, and teach on campus and at sites
Supplemental Retirement Plan. Contact Marie if                                                                    account, choose the Personal Investors section,
you have questions about changing investment                                                                                                                                 throughout greater Los Angeles. For more
                                                                                                                  then to My Portfolio and logon. Get your balances          information, visit the Emeriti Center online or in
companies or investment allocations, stopping or                                                                  and check your asset mix by answering about 10
starting a Supplemental Retirement Plan, rollover                                                                                                                            person in the Gerontology Building, Room 220 or
                                                                                                                  questions. Plan rules are available for USC plans.         call (213) 740-8921.
of retirement funds, getting ready to retire, and
signing final distribution documents.                                                                              Vanguard names for your retirement accounts
                                                                                                                  • USC Tax Deferred Annuity Plan–your contributions to
                                                                                                                                                                             Retired Faculty Association and Staff
                                                                                                                    Faculty and Staff Retirement Plan and Supplemental       Retirement Association
                                                                                                                    Retirement Plan                                
                                                                                                                  • USC Defined Contribution Retirement Plan–USC    
                                                                                                                    contribution to Faculty and Staff Retirement Plan
                                                                                                                                                                             The Retired Faculty and Staff Retirement
                                                                                                                                                                             Associations provide social and enrichment
                                                                                                                                                                             activities for their members. Membership is open
                                                                                                                                                                             to retired and current faculty or staff, respectively.
                                                                                                                                                                             For more information, leave a message at
                                                                                                                                                                             (213) 740-7122, and you will be contacted.

                                                      If You Do Not Have Access                                   University Park Campus                                     Health Sciences Campus
                                                                                                                                                                                                                                      BENE218/13M/OCT2005 Photos by Brian Morri and Irene Fertik

Lyn Miller                                                                                                        King Olympic Hall, Room 206                                Norris Medical Library Computer Lab
Assistant Manager                                     to a Computer                                               Open 24 hours a day, seven days a week.                    (requires a library card)
(213) 437-1821                                                                                                                                                               Monday thru Thursday, 7:45 a.m. to 12:00 midnight                                      If you do not have access to a computer, you may go to      Leavey Information Commons, Lower level of                 Friday, 7:45 a.m. to 8:00 p.m.
Lyn Miller works extensively with faculty             your Home Department Coordinator or your benefits            Leavey Library                                             Saturday, 9:00 a.m. to 5:00 p.m.
throughout their career at USC: from enrollment       office and use the computers available for public use. You                                                              Sunday, 9:00 a.m. to 10:00 p.m.
                                                                                                                  Monday through Saturday, open 24 hours a day;
in benefits to preparing for retirement. She also      also can use computer labs on campus. To use the
                                                                                                                  on Sunday, open from 9 a.m. to 12:00 midnight
                                                      computers at USC computer labs, you must present your
provides resources for understanding and enrolling
                                                      employee ID card.
in Medicare benefits.                                                                                              Salvatori Computer Science Center, Room 125                Lab hours listed are for the fall 2005 semester.
                                                                                                                  Open 24 hours a day, seven days a week.

                                                                                                                  Taper Hall of Humanities Language Center, Room 309
                                                                                                                  Monday thru Thursday, 8:00 a.m. to 9:00 p.m.
                                                                                                                  Friday, 8:00 a.m. to 5:00 p.m.
                                                                                                                  Closed on Saturday, Sunday and when classes are not in

                                                                                                                  Waite Phillips Hall of Education, Room B34
                                                                                                                  Open 24 hours a day, seven days a week.

  8                                                                                                                                                                        UNIVERSITY OF SOUTHERN CALIFORNIA

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