RSS Feed

Financial Fitness Blog

Keep fees in check to protect your retirement savings

(Retirement) Permanent link

 Michelle Blog PhotoThe impact of fees over time on your retirement account can significantly reduce your nest egg. It literally pays to understand the fees associated with retirement savings accounts, because keeping those fees low means more of your money is working for you. Below are ways that fees quickly eat away at your account balance.

Higher fees = Longer time to save. Even an increase of one percentage point in fees means you have to save for a longer period of time. In the 2011 May and August issues of the Journal of Financial Planning, researchers found that when a 1% fee was applied to an account, the amount a person needs to save during their working career to meet their retirement expenses increased from 16.62% to 22.15%.

Higher fees = Less to spend. That small fee increase also affects the amount you can withdraw. The same research found that “with a 60% bond/40% stock asset allocation, a 1% account fee would, on average, result in a 0.63% point reduction in the maximum withdrawal rate, which represents an average reduction in retiree annual spending power of 11%.”

Higher fees = You'll run out of money sooner. Fees may cause your savings to disappear sooner than you expected. According to David Blanchett, a Director at Unified Trust Company, a 1% advisory fee plus 0.50% in fund expenses (total annual fee of 1.50%) increases the chances that an account will be depleted early from 5% to 13%. (This is assumes a 60% bond/40% stock asset allocation and 4% in annual withdrawals.)

So, as you consider which retirement account to use as you plan for your future, be sure to pay attention to all of the costs. Not all providers charge the same fees. (For a list of common fees charged to retirement accounts, see our article, "Fees matter.")

Our fees are simple. The WEA TSA Trust is a low-cost, high-quality 403(b) tax-sheltered annuity provider.  We also offer both Roth and Traditional IRAs. With each, we charge one low annual administrative fee with an annual cap. (Mutual fund management and redemption fees apply.)

It is also worth noting that your family members, including your spouse, children and their spouses, parents, and parents-in-law may also be able to reduce costs associated with various retirement accounts by opening or rolling over into our IRA program. Give us a call at 1-800-279-4030 or email memberbenefits@weabenefits.com for more information. Wisconsin residency required.

Michelle Slawny, CFP®  

(Source: Journal of Financial Planning, May 2011, August 2011.) This blog post is for informational purposes only and not intended to be legal or tax advice. Consult your tax advisor or attorney before taking any action. The 403(b) retirement program is offered by the WEA TSA Trust. TSA program securities offered through WEA Investment Services, Inc., member FINRA.  The Trustee Custodian for the WEAC IRA accounts is Newport Trust Company. 

Make an inventory of your personal property now, save frustration later

(Insurance) Permanent link

Mark Blog PhotoNo one likes to think about experiencing a household disaster, but taking stock of the items you own is wise protection. You likely own more than you realize. Taking time to record your personal property will save you time, money and frustration should any loss occur.

A personal property inventory list provides you with a record of insurance coverage and valuable personal items so that if anything is lost, stolen, or destroyed, you will have readily available information for the police and for filing an insurance claim. The inventory list also will help establish proof of ownership in the event something of yours is stolen and recovered by police.

On our website you'll find a Personal Property Home Inventory worksheet that takes you room by room for a thorough accounting of your belongings. Also be sure to include the following:

  • A list of all your big-ticket items including the size, condition, quality, appearance, and any other important facts about the item to help determine replacement cost.
  • Receipts for your big-ticket items.
  • Videotape and/or photos to document the quality, appearance, and size of your belongings.
  • Appraisals of your big-ticket items to help in determining how much your possessions are worth.
  • A record of your serial and model numbers to easily identify your items.

Be aware of what your current home policy covers. If you have replacement cost coverage—meaning the insured items will either be repaired to the same condition as before or replaced with new ones of like kind and quality—having documentation of what your insurance will cover will be helpful if you need to file a claim.

When you've finished, make several copies of your personal property inventory. Having only one copy in your home won't do you any good if your house is destroyed by a fire or tornado. Keep one copy for yourself and leave another copy with a family member, neighbor, or at some other location, such as a safe deposit box.

Another option to consider is a storage and back-up Web site such as Dropbox.com or Mozy.com. These sites provide free online backup of important files. Scanning your important documents and photos and storing the electronic copies either in your e-mail account, an online back-up Web site, or on a CD allows you to access your important documents anywhere there's a computer and an Internet connection. 

If you have questions about preparing an inventory of personal property or would like to talk to someone about insurance for your home or auto, please give us a call at 1-800-279-4010.

Download the Personal Property Home Inventory worksheet.

Mark Dannehl, Personal Insurance Consultant

Learn more about long-term care insurance with a free personal seminar

(Insurance) Permanent link

Kelly Blog PhotoDid you know that just a single long-term care event can derail even the most careful financial plan?

Many people believe that health insurance or Medicare will fully pay for the care needed during an extended recovery, but this is simply not the case. Neither were designed to cover such care, and when policies do provide a benefit, it is usually limited to 30–100 days. Unless you have a long-term care insurance (LTCi) policy, you will pay for care with your personal savings and assets, and the costs can add up fast.

WEA Trust Member Benefits sponsors a long-term care insurance program that offers you the quality customer service, coverage, and protection members deserve. We think it's so important that we offer free, personal consultations to help you make an informed decision about long-term care insurance.

Contact us to make an appointment with a LTCi specialist. You will both view the same presentation online while you talk on the phone from the comfort of your own home. It's a great opportunity to talk with a real person and ask them your specific questions. Don't forget to ask about our discounted premium rates for members, spouses and parents.

To schedule your appointment, call 1-888-247-5905 during regular business hours. Or, make your appointment anytime online by visiting weabenefits.com/ltc

Kelly Behnke, CIC, CISR, ACSR
Personal Insurance Consultant

Take action towards your retirement! Steps to take throughout your career

(Retirement) Permanent link

 Michelle Blog PhotoA comfortable retirement is an expensive proposition. But careful planning now will help you save more over time. Here are some things you can do in every stage of your career to help you reach your goal.

Early career
Find a mentor. Finding a trusted friend or co-worker to answer your financial questions can be key to starting off your plan on the right foot.
Start saving. Even if it's only $20 per paycheck, start saving now! It's ok to start low, as long as you start.
Give yourself raises. Work toward contributing the maximum allowed in your retirement accounts. When you get a raise, give your savings a boost as well.

Mid-career
Be a mentor. Encourage others new to retirement saving to start now. Answer any questions they may have.
Retirement over tuition. This can feel difficult, but your retirement savings should come first. There are other ways to finance college, such as loans, financial aid and grants.
Evaluate and rebalance. Circumstances can change throughout your life. This may be a good time to shift some of your investments, adjust the risk level or rebalance the portfolio.

Late career
Continue mentoring. It could make a big difference in someone's life.
Sit down with someone. Take a serious look at your situation to see if you're on track to retire when you want to. If you're within 10 years of retirement, consider taking the Retirement Income Analysis from WEA Trust Member Benefits.
Now that the kids are gone… do you have extra money each month? Consider putting this extra cash toward your retirement. Remember, every little bit helps when you want to retire in the next few years.  

Michelle Slawny, CFP®