Ask WEA Financial Advisors about…Market volatility

As of April 2025, tariff talks were progressing and stock prices were seeing more down days than up days as the details rolled out. However, intra-year declines are part of investing. In 2024, for example, stocks pulled back 8% during the year yet arrived at a 23% annual gain.

But pullbacks will test your emotions. “As an investor, you know there are highs and lows during any given year. The challenge is remaining focused during the lows,” says Anna Edelstein, Financial Planning Supervisor at Member Benefits. “It can be tempting to react emotionally.”

If market volatility is feeling tough, keep these points in mind:

Retirement accounts are set up for long-term investing. Focus on your long-term goals and try to ignore short-term market ups and downs. It’s generally not advisable to stop your contributions when the market drops, because your dollars buy more shares when prices fall.

Having clear, prioritized retirement and investment goals will keep you on track, no matter how the market fluctuates. A solid long-term financial plan can help weather short-term volatility and other economic conditions.

A well-diversified portfolio can alleviate some of the effects when the market declines. You want to diversify across, and within, the major asset classes, keeping in mind that investments fluctuate in price.

Take advantage of opportunities to build up your finances by paying down debt, maintaining an emergency fund, and saving up for larger expenses, such as a house or vacation.

Protect your money by staying vigilant for fraud. There are no “risk-free” returns, so be cautious of anyone offering such guarantees. Avoid fraud by working only with registered investment professionals verified through FINRA BrokerCheck and adhering to your established financial plan.

“The Guaranteed Stable Investment through Member Benefits is one option to consider as part of your long-term strategy,” adds Anna. “It’s a more conservative investment in your asset allocation mix.

“If you’re experiencing more volatility than you’re comfortable with, it could be a good time to take a look at your portfolio. We can help with that. Contact us for an appointment.”

Sources: FMG, FINRA

Hidden costs of putting off investment decisions

A lack of action is played out often invisibly, with potential negative consequences to a person’s future financial security. Here are just a couple of ways this can impact your finances.

  1. One of the worst passive decisions may be the failure to enroll in your district’s 403(b) plan—and fund it. Not only would you miss out on a way to save for retirement, but you may also forfeit any potential employer-matching contributions.
  2. If you put off regularly reviewing your investment choices, over time you can end up with a collection of investments that may have no connection to your investment objectives. By not periodically reviewing what you own, you are making a default decision to own investments that may be inappropriate for your goals and needs.

Whatever your situation, your retirement investments require careful attention and can benefit from deliberate, thoughtful decision making.

If you have questions about your 403(b) or need to review your investment allocations, our financial advisors can help. Contact us at 1-800-279-4030 or learn more about our financial planning services. Your retired self will be grateful that you invested the time in making active decisions today.

Source: FMG.

Ask WEA Financial Advisors about…Planned giving

“Planning a major donation for charitable giving can have many benefits, both for the receiver as well as the giver,” says Clancy Cramer, Financial Planner at Member Benefits. “The good news is that you have a number of options to help make a long-lasting difference to the causes you care about.” Here are a few to consider.

Charitable Remainder Trusts (CRTs)

A CRT is a tax-exempt irrevocable trust designed to reduce the taxable income of individuals. It dispenses income to one or more noncharitable beneficiaries for a specified period, then donates the remainder to one or more charitable beneficiaries.

Charitable Lead Trusts (CLTs)

CLTs provide payments to a charity for a set number of years, and once the term ends, the remaining assets go to the donor’s heirs. This may help minimize estate taxes.

Qualified Charitable Distributions (QCDs)

People over 70½ can make tax-free charitable donations directly from their IRAs. These can count toward required minimum distributions for those 73 and older. QCDs are tax-free as long as they are paid directly to the charity and you retain a receipt of the donation.

Bequests and wills

Leaving a portion of your estate to charity through a will or living trust is a common way to make a lasting impact. You can designate a specific amount or percentage of your estate to go to a cause you care about.

“It’s a good idea to research charities to ensure their contributions are being used wisely. Charity Navigator is one example,” adds Clancy. “To help make the most of giving financially, be sure you understand the tax advantages of charitable donations. The financial advisors at Member Benefits can help you learn more and go over donation plan options. Contact us for an appointment, we’re happy to provide more information.”

What is diversification?

Diversification is an investment principle designed to manage risk, though it does not guarantee against loss. The key is to identify investments that may perform differently under various market conditions.

On one level, a diversified portfolio should be allocated between asset classes, such as stocks, bonds, and cash alternatives. On another level, it should also be varied within asset classes, such as a diverse basket of stocks.

For example, let’s say a stock portfolio included a computer company, a software developer, and an internet service provider. Although the portfolio has spread its risk among three companies, it may not be considered well diversified, as all the firms are connected to the technology industry. A portfolio that includes a computer company, a drug manufacturer, and an oil service firm, however, may be considered more diversified.

The concept of diversification is critical to understand when you are evaluating an investment portfolio.

If you want more information on diversification or have questions about how your money is invested, make an appointment with a Member Benefits’ financial advisor to review your personal situation.

Source: FMG.

Market volatility happens

When markets drop, it’s tempting to react impulsively by selling stocks or changing your portfolio. But history shows markets fluctuate—sometimes for days, weeks, or months. Accept the predictable unpredictability of the market. If that seems tough, keep these points in mind:

If you are experiencing more volatility than you’re comfortable with, it might be wise to take a look at your portfolio. Contact us at 1-800-279-4030 if you need help or have questions.

Source: FINRA.

Choosing a financial planner

Getting the answers to important questions up front will help you avoid surprises (the bad kind) later on.

Most people, however, don’t know what questions to ask. When you decide to start looking for advisors, you may find there are many to choose from. You can narrow down your list with some calls or emails asking a few basic questions.

Once know who you’re interested in, it’s time to get more details. Both The National Association of Personal Financial Advisors (NAPFA) and the U.S. Securities and Exchange Commission (SEC) have developed lists of questions that you can use when interviewing candidates.

NAPFA’s consumer resources page has some great tips and tools for choosing a planner. We suggest giving a copy of the NAPFA “Tough questions to ask your advisor” questionnaire to each candidate to fill out. This will make it easy to do a side-by-side comparison and those who don’t want to fill it out can quickly be eliminated from your pool of prospects. In fact, there may be good reason they don’t want to answer some of the questions.

The SEC website provides questions to ask that are specific to investment products as well as the people who sell them. Plus, you’ll find good information about the 403(b) and what to look for when choosing a provider.

Moving money concerns

What are the ways Member Benefits interacts with account holders?

While we generally don’t call every member on a regular basis, we do have customer service representatives, investment consultants, and financial planning staff available. Contact us any time to discuss or review your account. If you utilize our advisor managed portfolios, we will regularly reach out to you to update your risk tolerance preferences. We also provide educational seminars, this magazine, an informational website, and monthly email options, just to name a few additional ways we keep in touch with you and share helpful financial information.

Why doesn’t Member Benefits offer more investment choices?

When it comes to investment lineups, quality is more important than quantity. Our investment committees regularly monitor the performance of the funds in our investment lineup and make changes when needed. We maintain a shorter list because the funds we offer are heavily vetted on the front end for cost, performance, volatility, and other factors. The investment choices span the major asset classes and enable participants to build a well-diversified portfolio. For example, as of March 31, 2023, the moderate advisor managed portfolio offered in our Personal Investment Accounts consisted of 10,640 individual stock holdings with 1,274 bond issues. The average net expense ratio is 0.21%.

Member Benefits won’t give investment advice, but my financial advisor would like to monitor everything I have.

Did you know that Member Benefits DOES give advice and offer financial planning? Our 403(b) program provides you with a private financial planning portal called eMoney—and you don’t pay extra for this service. You get a consolidated view of all of your accounts, and our financial planners can help you with income strategy during retirement, an analysis of your income vs expenses, tax planning, legacy planning, and more. We can also create “what if” scenarios for you to consider to enhance your financial wellness and that of your family.

When you have a 403(b) with WEA Member Benefits, you enjoy many benefits, including:

None of this changes if you’ve retired or changed school districts. So why move to another company where you lose these benefits? Perhaps consider consolidating any outside accounts to your Member Benefits account as well.

This is the third and final article in our series. Read more:

Moving money matters

Let’s assume you’ve been saving for retirement for years in a 403(b) and/or IRA savings account. Your account balance is looking pretty healthy. And it’s feeling good to know your efforts over the years are paying off for your future.

But now you’ve started receiving mail from financial advisors/brokers offering a free meal along with the opportunity to learn how you can earn more on your investment. Or maybe the local agent who has been dropping by your classroom is sharing how he’s helped several of your colleagues around your age manage their investments. It gets you wondering—are you with the best provider for your retirement needs? Should you stay, or should you go?

Before you do anything, stop and ask yourself—why are you suddenly on their radar? Because you’re a real catch. People who have been saving for a while or are already retired tend to receive a lot of attention from investment brokers and agents because they’ve already done the hard work of building their nest egg. That can mean opportunity for someone who makes their living selling investment products and services. It’s simply a fact that the financial industry is huge and profitable, and there are strong incentives for someone who sells investment products to start a relationship with you—especially if you have accumulated some net worth.

Proceed with caution

Occasionally Member Benefits staff receive a request to transfer a retirement account from or to another financial institution for consolidation purposes. Housing all of your investment accounts with one financial advisor can simplify your financial life—but determining the value proposition of a transfer isn’t as straightforward as you might think.

Before moving your money you need to understand—really understand—the implications of your decision. That means knowing what you are buying, exactly how much it will cost, and what you stand to gain (or lose) from the move. This requires you to dedicate some time to gathering the necessary information and doing your due diligence.

“Rolling money over into an IRA annuity or another investment vehicle can be very lucrative for a broker,” says Brenda Echeverria, Financial Planning Supervisor for WEA Member Benefits. “It’s not uncommon for a broker to earn 5% or 6% right off the top. Bringing in an account worth $100,000 would mean a commission of $5,000 or $6,000.”

Guide your decisions

Is that a fair and reasonable price for you to pay? How do you know? It depends on what you are getting and whether you think the benefits justify the cost.

Here are some things to consider, questions to ask, and actions to take to help ensure you make the very best decision for you.

Keep your emotions in check

When it comes to your savings—the money you will rely on in retirement—the stakes are high, so it’s important not to jeopardize your financial well-being by letting emotions influence your decisions. “Fear is a major factor,” says Brenda. “People are afraid they won’t have enough money, then they hear about what others are doing and wonder if they should be doing it, too. Emotions can be useful in driving people to take action, but they can also lead to disastrous results if those emotions drive the decision. It’s why people chase the market or get out when the market drops.”

Brenda says it is also common for educators to feel compelled to use the services of someone they know from the community. “It might be the spouse of a friend or neighbor. They don’t want to hurt their feelings or tarnish the relationship by saying no to their offers or suggestions.” Remember—this is a business transaction, not a social event. They are not doing this as a favor. This is how they make a living. The point is, whoever you decide to work with, make sure you do it for the right reasons.

Don’t believe everything you hear

We often hear from our participants that they were told from other brokers they need to move their retirement money from Member Benefits because they can’t stay in our plan, or that they can’t roll over into a new employer’s plan, even though that may not be entirely true. Brenda says, “Members call and say, ‘the broker I talked to said I have to move my money out of my 403(b) now that I’m retired or have changed careers.’ This is inaccurate information that could result in a poor financial decision for that member.” Information such as this should always be validated by your provider before you take any action. The fact is, your Member Benefits’ 403(b) and IRA accounts can remain with us whether you retire, change districts, or change professions. Don’t take someone else’s word for it.

Uncover the costs

You wouldn’t walk onto a car lot and ask the salesman to pick out the best car for you without asking how much it costs. But people do this all the time with investment products.

When you are talking fees with the advisor/broker, ask for a list of all the costs and identify which are one-time fees and which are ongoing. “Many times the fees are not obvious or easy to understand,” says Brenda “There are often layers of costs beyond what the person you are talking to has explained.” For example, you may be charged other fees associated with the product that the agent doesn’t receive which go to the company. And if you are adding premium services such as ongoing investment advice, you’ll typically pay a percentage of your assets on top of fund fees.

Is it worth it? Maybe, but adding layers of fees can cut the chances that your money will last. “It helps to convert any percentages to actual dollars. I often hear, ‘it’s just 1%,’ but when I convert that into a dollar amount for them, it’s an eye-opener,” says Brenda.

Fees to watch for and quantify include:

Every dollar you pay in fees is not earning interest in your account. So consider the potential earnings you’re losing out on as well.

Identify restrictions

As a general rule, the more guarantees or promises you are getting with a product, the more restrictive the withdrawal options. Most annuities have surrender periods of 5 to 7 years. This means you are basically locked into the contract for that period of time and can’t withdraw your money without paying surrender fees, which can run as high as 7% of your account balance depending on the longevity of the account.

It can be difficult and costly to undo certain money moves. However, for some investments such as annuities and insurance products, there is a 30-day free-look period during which you can cancel. “I have talked with people who didn’t realize that the move limited what they could do or that they are locked in to a surrender period,” says Brenda. While participants in our IRA and 403(b) can keep their accounts with us for as long as they want and continue to take advantage of our low fees, if an account is closed out, there may not be an opportunity to come back. Brenda explains, “When you retire, you are no longer eligible to open a 403(b) account because you are not working. Once the account is closed, there’s no coming back. I can’t tell you how many retired people I have talked to who want to come back because they moved their money and were not happy. Unfortunately, I have to tell them they can’t.” Before you close your account, give us a call to learn about what this means for your eligibility to return.

Get help

Member Benefits recognizes there are times when participants need some face time with an expert regarding their investments and plans for the future. What really sets our services apart from other investment advisors or brokers is that Member Benefits retirement consultants and financial advisors do not receive commissions, so you receive unbiased information. Our staff can answer questions you have about our program or other products you might be considering. We can help guide you through the evaluation process so you can make the best decision for you.

Another question to ask someone you are considering working with is, “are you a fiduciary?” “I am,” says Brenda. This means the financial advisor has made a commitment to work in the client’s best interests at all times and puts YOUR needs before THEIR needs.

Before you decide whether you should stay or go ask yourself: Is it worth it? Only you can determine if what you receive in return justifies the cost. Whatever you decide, make sure it’s the best decision for you and your situation.

This is the first article in our series. Read more:

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Marketplace update

 

Here’s an example from earlier this year of the type of information you can expect if you sign up for our monthly enews.

What is a bull market, and more importantly, who determines if we’re in one?

Technically speaking, a bull market is defined as a 20% gain in a stock market index, such as the Standard & Poor’s 500, from a closing low.

So are we in one? As of May, technically, no. The S&P 500 hit a low of 3,583 on October 10, 2022. So a 20% gain would put the S&P 500 at right about 4,300. In May, the S&P 500 was still below that level.

Market news chart

The chart also shows how challenging the stock market has been since October 2022. When stock prices rally higher, those gains are often met by selling pressure. So it’s easy to understand that it has been a difficult period to remain focused as an investor.

It also reminds us how important it is to “tune out the noise” and focus on what you can control, like your time horizon, risk tolerance, and goals.

Let us help

If you need help turning down the bear volume you might be hearing, reach out to one of our financial advisors for a complimentary financial review or call 1-800-279-4030.

Source: FMG Suite, LLC. All financial advisory services are offered through WEA Financial Advisors, Inc., an SEC registered investment advisor. Some consultations may be free, call us for details. However, if you choose to invest in the WEA 403(b) Tax Sheltered Annuity, WEA Member Benefits IRA, or WEA Member Benefits Personal Investment Account programs, fees will apply. Consider all expenses before investing. Must meet eligibility rules to participate.

To move or not to move: Medicare premiums and Roth conversions

Why convert funds to a Roth account?

There are many potential reasons to convert funds from a traditional to a Roth retirement account. A common reason is that converting those funds can provide an opportunity for future tax savings.

Financial planners are currently seeing an influx of Roth conversions. One reason is that tax brackets (resulting from 2018 tax cuts) are sitting 3% lower until 2026, when they will likely revert to prior tax bracket levels (taxpolicycenter.org). Depending on circumstances, individuals are preferring to pay the lower taxes on their income now versus paying taxes on that income in retirement.

Paying less taxes sounds great, right?

Yes—but it’s not quite that simple. Individuals 63 years and older should be aware of the potential effect this has on Medicare premiums. Converting traditional to Roth funds requires account holders to report that money as income on their taxes. If you complete a Roth conversion and that raises your modified adjusted gross income (MAGI) past a certain level, you could be increasing the premiums you pay for Medicare B and D and reducing the intended tax savings. This increase is called an income-related monthly adjustment amount.

Income-related Monthly Adjustment Amount (IRMAA)

IRMAA brackets are released each year (see table on next page) and your bracket is determined based on your MAGI from two years prior. With the two-year look back period, if you are going to enroll in Medicare at age 65, you will want to take this into consideration at age 63.

However, it’s important to note that MAGI for IRMAA is calculated slightly differently than MAGI not related to healthcare. Your MAGI for the 2023 IRMAA can be calculated by taking your 2021 federal tax return adjusted gross income (AGI) and adding any tax-exempt interest earned from bonds, etc. and/or other income sources not included in your AGI. So your 2021 MAGI for Medicare determines your 2023 IRMAA bracket.

Modified Adjusted Gross Income (MAGI)Part B monthly premium amountPrescription drug coverage monthly premium amount
Individuals with a MAGI of less than or equal to $97,000
Married couples with a MAGI of $194,000 or less		2023 standard premium = $164.90Your plan premium
Individuals with a MAGI above $97,000 up to $123,000
Married couples with a MAGI above $194,000 up to $228,000		Standard premium + $65.90Your plan premium
Individuals with a MAGI above $123,000 up to $153,000
Married couples with a MAGI above $246,000 up to $306,000
Standard premium + $164.90Your plan premium + $31.50
Individuals with a MAGI above $153,000 up to $183,000
Married couples with a MAGI above $306,000 up to $366,000		Standard premium + $263.70Your plan premium + $50.70
Individuals with a MAGI above $183,000 and less than $500,000
Married couples with a MAGI above $366,000 and less than $750,000		Standard premium + $362.60Your plan premium + $70.00
Individuals with a MAGI equal to or above $500,000
Married couples with a MAGI equal to or above $750,000		Standard premium + $395.60Your plan premium + $76.40

For more information check out Premiums: Rules for Higher-Income Beneficiaries from the Social Security Administration.

Can I complete a Roth account conversion without triggering a premium increase?

Yes! It is possible but requires pre-planning and strategy, as everyone’s situation is different. It’s important to find a financial advisor you trust, like Member Benefits, or tax advisor to help navigate these decisions and figure out a suitable strategy for you. They can work with you to calculate the amount of funds you’d be able to covert from a pre-tax to Roth account but still keep you within the same IRMAA bracket, not increasing your Medicare premiums.

We can help

Meet with one of Member Benefits’ financial advisors for a retirement plan review to start building a strategy that’s right for you.

1-800-279-4030, Ext. 6730
weafa@weabenefits.com
Schedule a financial coaching option.

Converting from a traditional IRA to a Roth IRA is a taxable event.
*If you choose to invest in the WEA Tax Sheltered Annuity or WEA Member Benefits IRA program, fees will apply. Consider all expenses before investing.