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1. What information do I need before using PlanAhead?
PlanAhead estimates your retirement needs and income based on the information you enter. While estimates of the following information may produce a reasonable guide to your retirement needs and income, having recent actual information available will produce more accurate estimates.
Please note that the definition for all of defined terms can be found in the glossary of “A Guide to Clergy Benefits.” The terms are bolded throughout the FAQs.
- Total Assessable Compensation (TAC) from employment with the Episcopal Church (TEC), plus any earnings with a secular employer, if applicable.
- The number of years of Credited Service you have earned under The Church Pension Fund Clergy Pension Plan (Clergy Pension Plan) for pension benefits. As long as your TAC is greater than $0, you will earn one month of Credited Service under the Clergy Pension Plan for each month that your employer pays the monthly Assessment (including interest, if applicable) in full.
- See question #14 for details on earning Credited Service for the MSHP Subsidy.
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Recent statements from your savings, investment and retirement accounts, including:
- Recent Annual Statement from The Church Pension Fund (CPF) and pension plan statements from other employer-provided pension and retirement savings plans
- Personal savings accounts, brokerage accounts, IRAs, 401(k)s, 403(b)s (e.g., The Episcopal Church Retirement Savings Plan (RSVP) and all other accounts that will provide you income in your retirement
- Current rate of contribution (as a percentage of annual compensation or dollar amount) to your employer-provided retirement savings plans.
- Current rate of contribution to your other savings, investment and retirement accounts
2. What accounts should I include in "Other Investments" under "Other Savings Information"?
You should include all accounts you expect to use to provide retirement income. This might include checking and savings accounts, brokerage accounts, IRAs, 401(k)s and 403(b)s, and employer-provided savings accounts. Do not include any pension accounts provided through CPF in this section.
3. How is my pension benefit determined? Why is it different from the estimate on my statement?
Your pension benefit is estimated using the formula specified in the Clergy Pension Plan and the inputs you enter.
The tool assumes continuous employment up to retirement, with a full year of Credited Service each year. If your work pattern or work history is very unusual, the estimate of your pension benefit produced by the tool may be significantly inaccurate.
The tool produces an estimate of your benefits and uses approximations. Your actual benefit at retirement will be calculated based on the exact provisions of the Clergy Pension Plan, your Credited Service, and compensation history. If you are near retirement, please contact Client Services from 8:30 AM – 8:00 PM ET, Monday-Friday (excluding holidays) at (800) 802-6333 to request an estimate.
4. Does the tool take into account IRS limits on the amount of benefits or contributions to my retirement plans?
For most users, the IRS limits will not apply. For higher income earners and users with significant employer contributions to defined contribution plans, the limits may need to be considered in retirement planning. Please see the IRS website for additional information (www.irs.gov). Below is a brief description of how the IRS limits on your benefits and contributions are applied in PlanAhead:
- The IRS 401(a)(17) compensation limit that restricts the amount of annual compensation that may be considered for qualified retirement plans is applied to all employer provided retirement plans except The Clergy Pension Plan as PlanAhead assumes that you will earn a benefit under the nonqualified Benefit Equalization Plan if your compensation or benefit exceeds the qualified plan limits. The IRS limits are applied, however, to defined benefit plans offered by other secular employers.
- Contributions to the RSVP and other employer-provided retirement plans include the annual IRS contribution limit. However, the IRS contribution limits are applied to individual retirement plans, not to the total of all retirement plans of a user. A user with secular employment, or multiple employer-provided retirement plans, should consider if their total benefits and contributions are in compliance with the IRS limits.
- Contributions to the RSVP and other employer provided defined contribution plans do not include the IRS 415(c) limits on contributions.
- Benefits payable from a qualified defined benefit plan do not include the IRS 415(b) limits on annual benefits.
- Calculations for clergy members with secular employment apply the IRS limits to individual retirement plans; not to the total of all retirement plans. A user with secular employment should consider if their total benefits and contributions are in compliance with IRS limits.
5. How are my savings used to provide retirement income?
Your savings are used by the tool to fill the gap between your needs and your pension and Social Security income over your expected lifetime. The tool assumes all your projected savings will be spent by the end of your expected lifetime.
If you want to leave an estate rather than exhaust all your savings, go to the Advanced Inputs page. Find the question about one-time needs after retirement. Enter the dollar amount of the estate that you would like to leave to your heirs as a need. Enter the age of your life expectancy from the graph (the highest age where the graph is still showing retirement income being paid). This will reserve some of your savings for your estate, and will result in a lower score.
6. How are cost-of-living increases reflected in my retirement income?
Your Social Security benefits are projected to increase with inflation. Although not guaranteed, cost-of-living increases on your Clergy Pension Plan benefit are programmed in PlanAhead. Non-CPF pensions are not projected to increase. PlanAhead uses your savings balances to fill in your retirement needs. As your needs increase with inflation, the amount of your savings allocated to provide income increases accordingly. In this way, PlanAhead shows how your projected savings plus employer pension plans can provide retirement income that increases as your needs increase.
7. What does it mean that X% of needs are met?
Your score is the average percentage of your projected needs expected to be met by your projected retirement income. This result is calculated as the present value at retirement of your projected retirement income divided by the present value at retirement of your projected retirement needs. The present values are calculated using your post-retirement rate of investment return assumption. If the result is more than 100%, the value of your projected income exceeds the value of your projected needs.
In a few cases, the graph may show that retirement income exceeds your needs in some years and is less than your needs in other years. The percentage of needs met is the average percentage of your needs that will be met throughout retirement, taking into account both years of excess income and years of shortfall. This percentage of needs met by projected income is the best measure of your overall retirement income projection, based on all the information and assumptions you have entered.
8. Why do my needs end at a fixed age?
The tool uses your life expectancy (the expected number of years you will live beyond retirement) at your retirement age to illustrate your retirement needs and income sources. Life expectancy is merely an average length of time. To be conservative, PlanAhead uses a default life expectancy longer than the average. If you want to change the life expectancy used by PlanAhead, you can do so on the Advanced Settings page.
9. Can I set my own estimate of my needs?
Yes. The tool allows you to override the needs calculated with your own needs estimate. You can set your own needs percentage using the Advanced Inputs page. You may want to use your own estimate of needs if you expect much lower or higher income needs than are shown in the tool. Note that if you use this override, the tool will calculate your needs as that percentage multiplied by your compensation immediately before retirement. It will not include an adjustment for medical expenses. You will need to include medical needs in your override percentage.
10. What is meant by "your current secular employer retirement plans"?
If you currently have a secular position in addition to your clergy position, you may be actively participating in more than one retirement plan. "Your Current Secular Employer Retirement Plans" is where you enter information about retirement plans through your current secular position. If you have benefits in retirement plans from previous employers, those go on the "Other Investments" page.
11. How are cost-of-living increases reflected in my needs?
PlanAhead increases the amount you need for living expenses each year by a cost-of-living increase rate. Similarly, the amount you need for medical expenses is increased each year by a medical trend rate. These assumptions are necessary to project an income that maintains your purchasing power during retirement. You can adjust the assumptions for cost-of-living increases in the Advanced Settings if you think you will need a different level of inflation protection. There are various reasons for using a lower estimate of inflation. (For example: your income needs may gradually reduce as you grow older and become less active.)
12. What is the basis for the Social Security benefit shown?
Your Social Security benefit is estimated beginning with your current pay and uses your career earnings history to project future earnings going forward. The tool assumes that you have been, or will be, employed in a job covered by Social Security for the full 35 years used to calculate the benefit level. If this is not the case because you were not working in all years or worked in a non-covered job such as certain government jobs, the tool may overestimate your Social Security benefit.
You can enter your earnings history into one of the online benefit calculators at ssa.gov to get a more precise estimate and enter those estimates on the Input page. When you enter your estimate in this tool, you will likely want to use the "future dollars" estimate. If you use the "current dollars" estimate, it's a much more conservative assumption and will result in a lower score.
If you think Social Security benefits will not be provided at the same level as the current law, you can make adjustments for that in the Advanced Settings - Social Security page.
13. Can I put in the actual benefit estimate that I received from Social Security?
Yes. Instead of having the tool estimate your Social Security benefit based on your current salary, you can enter your actual benefit estimate from Social Security on the Input page of the tool. You can use the Social Security retirement estimator at ssa.gov to get your benefit estimate in "future dollars." When you enter your estimate in this tool, you will likely want to use the "future dollars" estimate. If you use the "current dollars" estimate, it's a much more conservative assumption and will result in a lower score.
14. How is Medicare reflected?
The tool assumes you will be eligible for Medicare at age 65. The retiree medical insurance expenses shown reflect medical insurance costs beyond those covered by Medicare. These expenses will either be paid out-of-pocket or through supplemental insurance.
The Clergy Pension Plan Credited Service under the Medicare Supplement Health Plan (MSHP) Subsidy is only earned if monthly assessments equal to 1/12 of the revised Hypothetical Minimum Compensation are paid to CPF. If assessments paid to CPF are less than this amount, you will not earn Credited Service under the MSHP Subsidy, but you will earn Credited Service under the Clergy Pension
Because the tool includes information about your CPF-sponsored retiree medical plan, if any, the tool assumes that you will enroll in the Medicare Supplement Comprehensive Plan offered by the Medical Trust, if eligible.
Since Medicare coverage is generally not available before age 65, early retirees will have higher needs for medical coverage in the years before they turn 65.
15. What are some of the key assumptions used in PlanAhead?
PlanAhead uses the following basic assumptions and methods:
- Your retirement income needs can be estimated from your projected compensation and national average research on needs. The calculator assumes you will need 100% of your pre-retirement income at the time of retirement.
- You are covered by Social Security and Medicare, and 100% of the current Social Security benefit is projected to be available when you retire.
- Pre-tax income is compared to pre-tax estimated needs. Taxes are considered in estimating needs after retirement.
- Knowledge of past investment performance over long periods is useful in planning for the future.
- If eligible, PlanAhead assumes you will purchase the Medicare Supplement Comprehensive Plan as defined in the Guide to Clergy Benefits.
- The Clergy Pension Plan benefit included in the calculation excludes the resettlement benefit, and life insurance.
- All contributions to a defined contribution plan are pre-tax contributions and your contributions to any qualified defined contribution plan will not exceed your taxable compensation in any year.
- Your pension benefit is not reduced for any approved Qualified Domestic Relations Order (QDRO).
- The IRS 401(a)(17) compensation limit that restricts the amount of annual compensation that may be considered for qualified retirement plans is applied to all employer provided retirement plans except The Clergy Pension Plan as PlanAhead assumes that you will earn a benefit under the nonqualified Benefit Equalization Plan if your compensation or benefit exceeds the qualified plan limits. Legal limits are applied, however, to defined benefit plans offered by other secular employers.
- Longevity: The calculator's default assumption is that you will live 7 years longer than your average life expectancy. Average life expectancy of a 65-year old is assumed to be age 89. You can change the life expectancy in the Advanced Settings of the calculator.
16. What information will I need to enter, and will it be kept safe?
To use PlanAhead, you will need to enter some private information, including information regarding your finances. To protect your privacy, PlanAhead uses a secure internet connection and requires your email address and password in order to access your records. Do not share your log-in credentials with others and be sure to log off the site completely when you are finished.
PlanAhead requires the use (including, in certain cases, the storage and retrieval) of your information. By using PlanAhead, you understand that Milliman and The Church Pension Fund and its affiliates may undertake such use in order to provide you access to the tool. Additionally, PlanAhead uses cookies to connect your input on one page to calculations and graphs on a different page. PlanAhead will not work without cookies being enabled by your browser. A cookie is information that a web site puts on your computer's hard disk so it can remember something about your web session at a later time. When your PC's browser uses cookies, it "remembers" what web sites look like - it doesn't have to build a page from scratch every time you want to go back to it.
17. What do I do if the email link is not working?
If you are having trouble using the email links, try opening your email and starting a new message. Highlight the email address link, right click and choose Copy. Then, click in the "To" field of your email and right click and paste. Now, send your email as usual.
18. Who do I contact for help?
PlanAhead provides more detailed information to answer your questions in several ways.
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