Five Social Security facts
We encourage Wisconsin public school employees to consider three things for funding their retirement: Wisconsin Retirement System (WRS), personal savings in a 403(b) and/or IRA, and Social Security.
Social Security can be complicated, and as a result, many people don’t have a full understanding of the choices they may have. Here are five facts about Social Security that are important to keep in mind.
- While WRS may likely be a main source of income for public school employees, Social Security is still an important source of retirement income for you as a public school employee.
- You can choose when you take Social Security. You may begin receiving benefits as early as age 62; however, your benefits will be reduced. The full retirement age is 67 if you were born in 1960 or later. If you were born before 1960, your full retirement age will be reduced depending on the year in which you were born.
- Social Security may be taxable depending on your income and may have implications for whether you choose to work during retirement, how your assets are invested, and the timing of withdrawals from other retirement accounts.
- When you start receiving Social Security benefits, other family members may also be eligible for payments.
- If you are divorced, you may qualify for Social Security benefits based on your ex-spouse’s work record.
If you’d like to do some break-even calculations or learn when and where to apply for Social Security, schedule a consultation with us.
1-800-279-4030
weafa@weabenefits.com
Sources: FMG, SSA.gov.
Pretax or Roth?
Did you know you may be able to contribute pretax and after-tax Roth contributions to your 403(b) account?
Pretax contributions lower your current taxable income, and are taxed as income when you take them out as withdrawals.
After-tax Roth contributions are taxed before the contribution goes into your 403(b) account. As long as certain requirements are met,* Roth funds, including all accumulated earnings, are not taxed when you take them out as a distribution.
So, the question is, do you want to pay the taxes on your deferrals now or when you retire?
One of the key advantages of Roth savings is the potential to lower your tax burden in retirement. As a public school employee, your retirement income may include a pension, Social Security, and individual retirement savings. All are typically taxed as ordinary income. By contributing to a Roth 403(b), you can create a source of tax-free income in retirement.
For more details explaining Roth 403(b) deferrals as well as information on how after-tax and before-tax savings may fit into your retirement savings strategy, see our To Roth or Not to Roth in your 403(b) online brochure.
*For qualified withdrawals from the Roth 403(b), the participant must be age 59½ or older and have had the account for at least five years.
Rollover to a Member Benefits IRA
Do you or your spouse have an IRA, 401(k), 403(b), 457(b), SIMPLE IRA, and/or SEP IRA with other companies? If so, you’re probably paying multiple annual fees.*
Managing your investment accounts is easier when you consolidate. Consider rolling over into our IRA program where you’ll pay ONE low administrative fee up to an annual fee cap.**
An IRA is a great way to save for your future. Increase your retirement savings and take advantage of tax benefits. We offer both our Roth and Traditional IRAs. Traditional IRAs give you tax-deferred growth and possible tax deductibility now, while Roth IRAs offer tax-free growth, meaning no taxes at all later on.
And our IRA program is open to family members! Your family, including your spouse or domestic partner, children and their spouses, parents, and parents-in-law, may also be eligible to participate in our IRA program.1
We can help you complete your transfer or rollover in a few easy steps. It only takes about five minutes with the help of one of our technical assistants.
Give us a call at 1-800-279-4030 or begin the process.
*Be sure to consider all your available options and the applicable fees and features of each option before moving your retirement assets.
**A minimum annual fee of $25 will apply to accounts that have no annual contributions. Mutual fund management and
redemption fees may apply.
1 To be eligible for this program, you must meet the IRS eligibility requirements for contributing to an IRA. Restrictions may apply. Certain state residency required.
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:
- 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.
- Having clear, prioritized retirement and investment goals will keep you on track, no matter how the market fluctuates. Good financial goals and a solid long-term financial plan can help weather short-term volatility and the impacts of inflation 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. Learn more about its role in your portfolio at weabenefits.com/understanding-stable-value-investing.
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.
8 timeless principles of investing
1. Focus on what you can control
Market movements, business decisions, economic events, politics, interest rates—many factors can influence the performance of your investments. Instead of worrying about events that are out of your hands, focus on what’s within your control.
2. Put time on your side
Financial markets have rewarded long-term investors. Compound growth may help bring about higher returns over time. Keep in mind, however, that past performance does not guarantee future results.
3. Tune out the noise
News cycles driven by fear, uncertainty, and doubt can challenge even the most disciplined investor. Some headlines spark anxiety, while others try to goad you into chasing the hottest fads and trends. Although we live in an era of seemingly infinite data, information overload can cause you to (perhaps unwisely) reconsider investment decisions.
4. Don’t try to time the market
Market timing is the strategy of trying to predict future market movements to time buying and selling decisions. When markets are rallying or pulling back, it can be very tempting to try to seek out the top for selling or the bottom for buying. The problem is that investors usually guess wrong, missing out on the best market days. Another approach is to focus on time in the market, which may let you ride out the natural market cycles and focus on your long-term goals.
5. Understand risk
Market risk—or the risk of your portfolio losing value due to factors such as changing market conditions—isn’t the only type of risk to be concerned about. Personal risks, such as longer lifespans and rising health care costs, mean that you need to consider a variety of factors as you prepare for retirement. Understanding risk as it relates to your time horizon and investing goals is critical to a financial strategy.
6. Avoid the emotional roller coaster
Emotional decision making can lead to the wrong decision at the wrong time. A DALBAR study found that while the S&P 500 returned 6.06% for the 20-year period ending in 2019, the average investor fared worse, seeing a return of only 4.25% during the same period. Emotional decision making was one of the factors that contributed to the difference in performance.1
7. Don’t procrastinate
The sooner you begin investing, the longer your money can work for you. Let’s look at two hypothetical investors, Jack and Jill. When Jill turns 50, she starts contributing $25,000 a year to an account that earns a hypothetical 6%. After 10 years, she stops making payments. Jack puts off his investing program. At age 60, he begins putting $25,000 a year into an account that earns a hypothetical 6%. Though both have contributed equal amounts, Jill has the magic of compound interest working for her. When they both reach age 70, Jill’s account balance is nearly twice the size of Jack’s.2 Learn how compound interest may help you save more over time.
8. Delegate the details
The financial professionals at Member Benefits can help you create a customized portfolio strategy that’s built around your unique goals. Although we can’t control markets, we can help you use them to pursue your long-term financial goals. Contact us for an appointment.
1-800-279-4030
weafa@weabenefits.com
Source: FMG. All financial advisory services are offered through WEA Financial Advisors, Inc., an SEC registered investment advisor.
1. TheBalance.com, November 22, 2021 (most recent data available). S&P 500 measures the performance of 500 of the largest public companies in the U.S. You cannot invest directly in an index.
2. This example is for illustrative purposes only and does not represent an actual investment or combination of investments. Annual contributions are made at the beginning of the compounding period. This hypothetical example does not reflect taxes or any fees. Past performance does not guarantee future returns.
Time to review 403(b) and IRA contribution limits
Contribution limits for the 403(b) have increased in 2025. The IRA will remain the same. The contribution limit for the 403(b) is $23,500. The limit on annual contributions to an IRA will continue to be $7,000.
If you’re not maximizing your contributions, you may wish to re-evaluate the amount you’re putting toward retirement. Not only do you lower your taxable income, you ensure that you’re doing everything you can to reach your retirement goals.
If maxing out contributions is not realistic for you right now, remember: With compound interest, even a small amount invested today can grow to a large sum by retirement.
Elective 403(b) Contribution Limits
| Calendar year | Salary Reduction Contribution Limit | 15 Years of Service Catch-Up | Age 50 and Over Catch-Up | Possible maximum |
|---|---|---|---|---|
| 2025 | $23,500 | $3,000 | $7,500 | $34,000 |
| 2024 | $23,000 | $3,000 | $7,500 | $33,500 |
- Not all districts offer the 15 years of service catch-up provision in their 403(b) plan. Contact your district office to learn more.
- Some employers only allow changes at the start of the school year and then again in January. Others allow more frequent changes. Call Member Benefits to assist you with updating your salary deferral amount.
- Some districts may allow Roth 403(b) contributions. Your 2025 Roth contributions and your pre-tax contributions combined must not exceed the $23,500 limit for participants under age 50, or $31,000 for participants age 50 and above.
IRA (Roth and Traditional) Contribution Limits
| Calendar year | Under age 50 | Age 50 or older |
|---|---|---|
| 2025 | $7,000 | $8,000 |
| 2024 | $7,000 | $8,000 |
- You may contribute to both a Roth and Traditional IRA, but your combined contributions must not exceed the annual limits.
- You can start or modify IRA recurring contributions and/or submit a one-time lump-sum contribution in the yourMONEY portal.
- If you make automatic IRA contributions using SmartPlan, your contributions do not adjust automatically to meet the new limits. To make adjustments, call 1-800-279-4030 or print out an IRA Contribution Form.
NOTE: Because the maximum Roth IRA contribution may be reduced depending on MAGI (Modified Adjusted Gross Income), some high-income taxpayers may not be able to make Roth IRA contributions; however, they could make Traditional IRA contributions.
Smart strategies for a secure retirement
If you want to start stepping into retirement, consider these resources to help you along the way.
yourINCOME PATH™
A suite of options Member Benefits offers to help turn your retirement savings into income. This includes a range of flexible withdrawal options to meet cash flow needs, required minimum distribution support, qualified charitable distributions, and more—all at no additional cost.
Financial calculators
Our free financial calculators include an Investor Suitability Profile Questionnaire, retirement savings and planning options, Social Security and Wisconsin Retirement System links, and more. The Impact of Withdrawals savings calculator can be helpful when planning a retirement savings withdrawal strategy.
Retirement Income Analysis
A focused retirement planning service for those within 10 years of retirement. A financial planner will help you define your retirement goals, evaluate your financial position today, and determine whether you are on track to meet your goals.
eMoney
Those saving with Member Benefits’ 403(b) can use this free online platform to build their financial strategy and request a consultation to collaborate in real time with our financial advisors.
And more FREE resources available in our Learning Center.
Stepping in to retirement
Are you close to retiring? Financial security in retirement doesn’t just happen. It takes planning, commitment—and money. Unfortunately, only about half of Americans have calculated how much they need to save for retirement (Department of Labor). And the closer you are to retiring, the more you need to have a plan in place.
Retirement planning involves setting goals and developing strategies to help protect your financial future. The earlier you start, the better. But if you’re nearing retirement and haven’t started yet, don’t worry—it’s never too late.
First step: Determine what kind of retirement you want
Retirement looks different for everyone. Do you want to fully leave the workforce, work part-time, or take a sabbatical between jobs and continue working? Consider your ideal lifestyle and financial needs.
Second step: Build your plan
- Decide on what age you want to retire. This will help you determine if you need to save more to reach your goals.
- Set realistic spending expectations. Many aim for 70–80% of their pre-retirement income, but this can vary. Consider the longevity of your portfolio to determine how much you can withdraw each year. With longer life expectancies, you’ll want to ensure your savings lasts throughout retirement.
- Factor in health care expenses. Medical costs are often one of the biggest financial challenges in retirement. While exact needs are hard to predict, plan for how you’ll cover both acute and long-term care expenses once you’re no longer working.
Third step: Maximize late-career opportunities
Your late 50s and early 60s are often peak earning years, making it a great time to boost your retirement savings. Take advantage of catch-up contributions—those 50 and older can contribute an extra $1,000 to an IRA or $7,500 to a 403(b) or 457 plan in 2024. (Learn more about contribution limits.)
Keep a close eye on your asset allocations. With less time to recover from potential losses, it’s important to assess the level of risk you’re comfortable with.
Finally, focus on eliminating debt and assessing your retirement income sources to be fully prepared for when you choose to retire.
Final step: Get help
Planning for retirement is not a simple process. Many things need to be taken into consideration. It’s OK to feel overwhelmed or to have questions.
That’s why it’s great to have a partner you can trust to help you with your financial planning. As a participant in Member Benefits’ programs, you have access to our financial advisory services, which can help you refine your strategies as retirement approaches. We also offer a free program called yourINCOME PATH to manage your required minimum distributions, and provide various online resources as well.
Contact us for support. We’re here to help you.
P. S. Pick up some smart strategies for a secure retirement.
Moved to a new school district this fall?
Moving to a new district requires you to open a new 403(b) account in order to contribute to your retirement savings. We can help you enroll in your new plan and assist with consolidating your accounts (if allowed by the plan).
Schedule a meeting here or call us at 1-800-279-4030.
Financially savvy millennials have a Roth IRA…here’s why
No taxes (on earnings or qualified withdrawals)
That’s right. Your retirement savings account grows absolutely tax free and you won’t owe a dime when you start taking withdrawals as long as your follow the IRS rules. This is because Uncle Sam takes taxes out before you invest it. It’s like prepaying your taxes. The frosting on this cake is that you are not taxed on any account earnings. Hard to believe, I know. Don’t question it, just go with it.
Just $20
That’s all you need to start a Roth IRA with WEA Member Benefits. Other providers may require $500 or $1,000 to open an account, but we think you should be able start with whatever you can afford. A comfortable retirement is an expensive proposition. But, starting sooner even with as little as $20 per pay period can make a significant difference in your financial future.
Flexibility
A Roth IRA is also more flexible than other retirement savings. Although the purpose of a Roth IRA is to save for retirement—long-term savings—access to your contributions is much easier than say in a 403(b) or 401(k) account. However, withdrawing from your account is not recommended because your money needs to be in the account so it can grow, but if you have an emergency and have no other options, it’s nice to know it’s there.
PLEASE NOTE:
Contributions is italicized in the previous paragraph for a reason. Withdrawing any of your earnings before age 59½ will trigger a tax bill on the money, plus you’ll have to pay a 10% penalty. So you won’t want to do that. Unless…you want to tap your Roth for either of these two reasons and qualify.
- To buy your first home. If you use your Roth IRA for a first-home purchase, in addition to using your contributions for the down payment, you can also withdraw up to $10,000 of earnings tax- and penalty-free if the account has been open for at least five years. Even if you fail the five-year test, the withdrawal will still be penalty-free, but you will have to pay tax on the withdrawn earnings. The $10,000 limit is per person, so couples could withdraw up to $20,000 of earnings if they each have a Roth IRA.
- To pay for college. Many parents don’t know whether to save for retirement or their child’s college tuition. Retirement always wins that debate. There are lots of finance options for a college education; for retirement, not so much. A Roth IRA is a great way to cover plan for either. Focus on your retirement now, saving as much into a Roth as you can. And as your finances allow, consider opening a 529 plan, like Wisconsin’s Edvest. When the tuition bill comes due, you can see where you’re at.