Prudential Financial completes sale of full-service retirement business to Empower
Prudential Financial announced in April the completion of the sale of its full-service retirement business to Empower, the second-largest retirement plan recordkeeper in the U.S. Here are a few things you need to know regarding your retirement account through WEA Member Benefits.
Does the acquisition include the Prudential Guaranteed Investment*?
Yes. Empower acquired Prudential’s defined contribution, defined benefit, non-qualified, and rollover IRA business in addition to its stable value and separate account investment products and platforms.
Who will guarantee the Prudential Guaranteed Investment?
Prudential Retirement & Annuity Company (PRIAC), which is now owned by Great-West Life & Annuity Insurance Company, continues to provide the guarantee. PRIAC and Great-West Life & Annuity Company have consistently received high marks from industry sources for financial strength from major rating agencies.
What else do I need to know?
Our stable value contract with PRIAC is unchanged, and the entire client service team from Prudential Retirement that supports our Guaranteed Investment program remains in place at Empower. Empower leadership has reinforced the importance of our relationship as well as their commitment to continue the existing terms of our stable value contract.
As always, Member Benefits continues to strive to offer best-in-class programs to members. We will continue with the same due diligence process moving forward that we have always employed.
*Interest is compounded daily to produce a yield net of Prudential’s administrative fee of 0.60%. PRIAC is compensated in connection with this product by deducting an amount for investment expenses and risk from the investment experience of certain assets held in PRIAC’s general account. For more information, go to weabenefits.com/pru.
Moving 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).
Call us at 1-800-279-4030.
Nick’s strategy for cultivating financial independence
In 2010, Nick Havlik was 24 and an extreme saver, putting as much as 40% of his income into retirement savings. (No, that’s not a typo!) He was focused on the retirement long-game and committed to saving upfront to maximize the impact of compound interest and increase his chances of an early retirement. As he said then, “I’m saving now so I have more freedom later. I don’t want to have to work part-time in retirement to supplement my income.”
Nick’s approach is solid and based on sound financial practices. Andrea (Andie) Hartwig, WEA Member Benefits Financial Planning Consultant, agrees that saving as early as possible and saving as much as you can will help ensure a financially secure retirement. “However,” she says, “Nick is a saving anomaly. The idea of saving forty percent of your income, while admirable, probably isn’t going to work for most people,” she says. “What is important is to start saving something—even a small amount—as soon as you can.”
Time, she says, is your greatest asset—something Nick understood early on and took to heart. “It allows you to maximize the benefits of compound interest. Contributions will grow and grow over the years, earning interest on interest on interest. Even small contributions can make a significant difference down the road,” Andie explains. And Nick has used his time wisely.
Catching up with Nick
Twelve years have passed since we last talked with Nick. One has to wonder how long a 24-year-old can continue such a rigorous regiment of saving—a regiment, Nick said at the time, that others considered a little crazy, unreasonable, or impossible to maintain with all the temptations dangled in front of fresh-faced 20 somethings with so much life to live.
Andie adds, “It’s especially hard for young educators to plan for a retirement that is decades away because there’s a lot of competition for the earned dollar. They typically have student loans, they’re trying to launch their career, they’re setting up a place to live and the expenses that go along with that, and perhaps buying a car. And then there’s a social life that may vie for a piece of the pie…restaurants, concerts, and trips. Later it might be a wedding, a house, and kids. It’s a lot to manage.”
So, the big question now is: Was Nick’s approach sustainable? How committed has he been to his plan? To feed our curiosity, we checked in with Nick to see what his life looks like 12 years later.
Tending to his grapes…and his plan
We tracked Nick down not in a classroom, but in a vineyard. No, he wasn’t on a wine tasting tour. He was working…in his vineyard. This is where he spends most of his summer, between rows of grapevines, tending to his crop. Nick still teaches—now with the Port Washington school district—but he says, “I’m essentially a farmer as well.”
The vineyard is the result of a decision to stop working for other people during the summer. “It’s all part of the plan,” he says, the same plan he had at 24—retire early. Only now it’s a plan he shares with his wife, Andrea, and together they’ve made a few tweaks.
“There was an opportunity and we took it. In 2014, we planted our first vines—just 500—and now we have 5,500. Small local vineyards are increasingly popular,” he says. And he’s right. According to the Wisconsin Winery Association, in 2000 there were fewer than 100 acres of vineyards planted. In 2019, it was well over 1,000. The number of Wisconsin wineries also increased from 13 to 110 in that time. “There’s a market for the grapes right here in Wisconsin,” Nick adds.
The sooner you start planning, the better your odds of retiring with the money you’ll need to enjoy it.
When asked about the risk of the venture, Nick doesn’t hesitate. “Like farming, it’s a risky business for sure. We could get one hail storm and lose it all. But life is full of risk. The best you can do is prepare for it. We would be distraught if that happened, but financially, we would be fine.”
Risk is part of the investment equation. All investments carry some degree of risk. “The key is knowing what the potential loss is, what that might mean for our situation, weighing it against the potential for gain, and then deciding what we can stomach,” he says.
Like most investments, the vineyard wasn’t an instant money-maker. “We didn’t make a penny for three years. And what we did make went back into the vineyard. But it’s what we expected,” he said.
He worked the vineyard for two years while still teaching and living in Brookfield, but in 2016 he and his family moved to Port Washington. “It was a good move. I really like the district. Financially, it made sense and it’s closer to the vineyard, which is in Fredonia.”
Balancing compound efforts
In addition to the vineyard, Nick and his wife Andrea have dabbled in a few other ventures to help toward their goal. As one can imagine, he is busy all the time—also part of the plan. “I’m 37. We only have so many years to continue at this pace. Too many people live by a ‘work to grave’ concept. Our plan is to get the time back later by putting the time in now. At this point, we have a ten-year window to stretch ourselves. Time is our biggest asset,” he emphasizes.
Some might think Nick’s life balance is out of whack, but he assures us that is not the case. He is married with two young daughters. “I’m 100% satisfied with my life balance. My number one priority is to raise good, happy, successful kids. I always make time for my family. We sit down for supper every night as a family.
“There are times when it’s go, go, go, but then it slows down,” he says. “For example, September stinks. I work every single day at the vineyard during harvest. But then things settle down a bit.”
He admits to missing out on some things he enjoys, like fishing. “I love to fish, but I don’t have time. I’m banking time for that in the future.”
It’s hard to imagine Nick slowing down too much in retirement, but then, his notion of retirement may not match up with most. “The word retirement may be out,” he suggests. “Maybe it should be changed to ‘finding your second calling.’” Thus, the vineyard—but he’s hoping he won’t be doing all the work at that point.
Nick says none of this would be possible if he and his wife weren’t in lockstep when it comes to finances. “We have the same goals and we have conversations regularly about our finances. It’s a partnership.”
It turns out that having a financially compatible spouse makes for a strong marriage. Studies show that opposing attitudes about money, conflicting priorities and goals, and different spending behaviors are among the top reasons couples divorce (2019 Ramsey Solutions study).
“I wouldn’t be where I am without her. Marrying my wife was the best financial decision I’ve ever made.”
Get yourself a plan
And so it seems that Nick has remained committed to his original plan: Do what it takes to retire early. “Nick offers good tips for building financial security,” Andie says, “but most people won’t likely practice them with the fervor and discipline that he has. Everyone’s circumstances are different, as are their retirement goals. How much you need to retire depends on many factors: when you retire, your lifestyle, and what you plan to do in retirement. Will you travel? Do you have expensive hobbies? Additionally, will you retire with debt, like a mortgage? And, don’t forget about health insurance costs before Medicare kicks in. If you are not planning to step out of the workforce early, a less rigorous approach may work. In any case, everyone should have a retirement plan.”
If you don’t have a plan or want to review your current plan, remember you have a resource at Member Benefits. Our financial planning services are designed to fit your style and needs—including Do It Yourself, Financial Coaching, and Financial Planning Advice. “The sooner you start planning, the better your odds of retiring with the money you’ll need to enjoy it.”
Andie is quick to point out that even if you didn’t start saving with a 403(b) or IRA as early as Nick, it doesn’t mean you can’t start now. She encourages public school employees of any age to focus less on the amount they can save right away and more on getting started. “If you haven’t started saving, don’t wait any longer. Make today the day,” she emphasizes. “Increasing contributions when you can is important, but getting started is critical because it’s extremely difficult and costly to make up for the lost time.”
As for Nick, it appears he is on track to becoming financially secure and making his early retirement dream come true. With any luck, he’ll be enjoying the fruits of his labor, and maybe a glass of wine, while someone else tends to his grapes.
Nick’s financial credo
The credo by which Nick and his wife Andrea operate is fairly simple…and it hasn’t changed much in 12 years.
We don’t overextend ourselves. It has nothing to do with how much you make, it’s about choices and priorities. We don’t take extravagant vacations, and I’m driving a 2000 Buick.
We save and plan like there will be no Social Security and no pension when we retire. We fully fund our retirement accounts. It’s probably the most important thing you can do.
We try to live frugally. We don’t try to keep up with the Joneses. It’s an easy trap to fall into.
We don’t take risks we can’t recover from. You have to understand the risks you are taking and what the impact of loss would be on your finances.
Get more of the story!
Read the original story about Nick and how saving big for retirement and taking advantage of compound interest put him ahead of the game. View the Summer 2010 magazine.
We’re here for you
Learn more about Member Benefits’ programs and services by exploring our website or calling 1-800-279-4030.
*For illustrative purposes only. Your actual situation may be different depending on future rates. No guarantees are expressed or implied.
New addition to target retirement funds
The Vanguard Target Retirement 2070 Fund will launch on August 8, 2022, joining the existing lineup of Vanguard Target Retirement funds at WEA Member Benefits. It will be an age appropriate investment option for anyone born on January 1, 2003, or later.
The fund will be mixture of the following: 54% U.S. Stock, 36% Foreign Stocks, 7% U.S. Fixed Income Securities (i.e., Bonds), and 3% Foreign Fixed Income Securities (i.e., Bonds). The initial allocation in the fund is considered to be an aggressive portfolio with an expense ratio of 0.08%.
The 2070 fund will begin with this allocation mix and, like all target retirement funds, slowly rebalance over time to become more conservative—transitioning from more stocks to more bonds in order to reduce market risk as the target date approaches.
If you have any questions about the fund, please call us at 1-800-279-4030.
Do you know these IRA facts?
Did you know:
- You can contribute to as many IRA accounts as you want. However, the total you can deposit across all of your accounts is limited to the annual maximum of $6,000 ($7,000 if 50 or older) in 2022.
- Age is no longer a limitation. Most anyone with earned income can contribute to a Traditional IRA, including minors. And the passage of the SECURE Act means most people can contribute to a Traditional IRA past age 70½ as long as they have earned income.
- You don’t need to take RMDs from all of your IRAs. In most cases, you can choose to take it all from one IRA or from a combination of IRA accounts.
- You can roll over old accounts into an IRA. If you have an old 403(b) or 401(k), you may be able to move that money into an IRA.
- Member Benefits has expanded our IRA eligibility guidelines. If you live in one of the eligible states outside of Wisconsin, you and your family* may enjoy the benefits of saving with a WEA Member Benefits IRA.
P.S. The deadline for putting money into IRAs for this year is April 15, 2022. This includes both Roth and Traditional IRAs. If you didn’t max out your 2021 IRA contributions, now’s your chance. (Consult your personal advisor or attorney for advice specific to your unique circumstances before taking action.)
*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. Your spouse/domestic partner, parents, parents-in-law, and children and their spouses may also participate in our IRA program if they live in one of the approved states.
Exciting new feature in yourMONEY Snapshot mobile app
For those of you who utilize the yourMONEY Snapshot mobile app, we have some great news!
If your school district allows online salary reduction agreement changes in your 403(b) account, you can now change your deferral through the mobile app. We’re very pleased to be able to offer this convenient option to our members.
The yourMONEY Snapshot app lets you toggle between goal forecasting, balances, transactions, investment performance, quarterly statements, and more.
Mutual fund changes
We want to thank everyone we serve through our vision of “every member financially secure” who is saving for retirement with a 403(b) or IRA from WEA Member Benefits. We value you and we’re looking forward to our next 50 years of serving you (learn more at our 50th anniversary celebration page).
Participants utilizing these funds received a letter in January 2022 with details and important dates to note regarding two mutual fund changes that will be taking place in our 403(b) and IRA programs. Here is a summary of the information participants in our retirement programs received.
Vanguard Institutional Target Retirement Funds
Vanguard is merging the Institutional share class with the Investor share class for all Vanguard Target Retirement Funds. This is good news for members as it’s expected to result in a lower expense ratio of 0.08% for each target retirement fund following the completion of the mergers. The merger is scheduled to take place on or about February 9–16 and will result in a blackout period of up to seven business days. Other important dates regarding these funds can be found in the letter.
T. Rowe Price Mid-Cap Growth
Member Benefits will also be replacing the T. Rowe Price Mid-Cap Growth fund with the ClearBridge Select Fund IS in the WEA Tax Sheltered Annuity 403(b) and WEA Member Benefits IRA programs.
Beginning March 2, 2022, contributions, distributions, and trades will be held for processing until after the mutual fund change is complete during the week of March 7. Other important dates regarding these funds can be found in the letter.
What you can do
These changes will happen automatically—no action is required on your part. You may download a prospectus and fact sheet or call and request a prospectus and fact sheet to be mailed to you. We are advising participants to read the prospectus carefully and consider the fund’s investment objectives, risk, and charges and expenses before investing. The prospectus contains this and other information about the investment company.
This may be a good time to review your portfolio to take advantage of the choices available. Member Benefits offers financial planning services that also include nonretirement personal investment accounts.
Time to review 403(b) and IRA contribution limits
The contribution limit for the 403(b) has increased from last year to $20,500 in 2022. The limit on annual contributions to an IRA stays the same at $6,000. 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|
- 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 Roth contributions and your pre-tax contributions combined must not exceed the $20,500 limit for participants under age 50, or $27,000 for participants age 50 and above.
IRA (Roth and Traditional) Contribution Limits
|Calendar year||Under age 50||Age 50 or older|
- You may contribute to both a Roth and Traditional IRA, but your combined contributions must not exceed the annual limits.
- If you make automatic IRA contributions using SmartPlan or through payroll deduction (if available in your district), 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.
A recipe for retirement
We wish it were easier, but in reality a lot goes into planning for retirement. It’s like hosting a holiday meal—you need to plan for how many people are coming, what you’ll serve, the ingredients you need, and the timing of the food. You know that some preparation and organization are going to be necessary to make the meal a successful one.
Much like coordinating a holiday meal needs a recipe for success, so does retirement planning. The recipe isn’t the same for all, but there are several common ingredients that most everyone should include as they create their plan.
Here are some of the ingredients for creating a delicious retirement.
The earlier you start saving, the more you can take advantage of compound interest. Compounding is what happens when earnings on your investments are reinvested in your account. The reinvested earnings may also have earnings and then those earnings are reinvested and so on. Compounding can have an amazing impact on your retirement savings.
However, it’s never too late to start saving. Saving even a small amount each month is better than nothing. But the sooner you can, the better.
Dish up your savings options
If you’re not saving in your district’s 403(b) program, you may want to get started. Your savings receive advantageous tax treatment, and your district may kick in more through a match.
Member Benefits’ IRA program is also a great savings option. It gives you the opportunity to save for retirement outside of employer-sponsored retirement plans.
Blend in this fact: More spending in the future requires additional savings today.
You need personal savings to help fill any shortfall in your retirement income that may not be satisfied by your Wisconsin Retirement System (WRS) pension plan and Social Security benefit. As life expectancy increases, saving more is becoming increasingly important. According to the Centers for Disease Control and Prevention, the average life expectancy for a person who was 65 years old in 2018 is 85.7 years for women and 83.1 years for men—and life expectancy for both genders continues to increase. And as of 2021, one out of three 65-year-olds today will live past 90, according to the Social Security Administration.
Put your personal retirement contributions on autopilot through payroll deduction or monthly automatic withdrawals from a checking or savings account to make it easier to save. Your options with the 403(b) and IRA may differ, so check with your specific plan.
And don’t forget to increase your savings contributions on a regular basis. We have more information on annual contribution limits.
Measure up your savings goals
What do you want to do in retirement—travel, shop, golf, start a hobby? Do you plan to purchase a home or help your kids out financially? More spending in the future requires additional saving today. Be realistic about the price tags of the things you want to do knowing that the cost of living will continue to increase and that you may live longer than you expect.
Member Benefits has an array of free financial calculators that can help you as you clarify your retirement goals.
Mull over fees
You wouldn’t willingly overpay for food, so take the same approach with your retirement account. Costs matter, and you need to understand all of the fees involved. Our fees are simple—a Member Benefits IRA or 403(b) has one low annual administrative fee with an annual fee cap. (Mutual fund management and redemption fees apply.)
To make the most of your invested dollar, you want to minimize the fees you pay. Ask questions of the retirement savings providers you’re interested in—they should be able to provide a clear and complete explanation of their program fees. Learn more about fees.
As the school year gets in gear, you may see more financial representatives in your building. Be wary of those who sell high-cost financial products that have additional layers of fees (sometimes hidden) for things like insurance, wrap accounts, etc. Sometimes brokers and insurance agents can benefit more from product sales than the client.
Because seniors are a growing segment of investors, financial services firms are increasingly focusing their marketing and sales of investment products on investors in or nearing retirement. One common marketing approach is to invite seniors to an investment seminar and offer them a free meal. Be on the lookout for exaggerated claims or guarantees that are often part of the enticement. If it sounds too good to be true, it probably is.
If you really want to go to one, do your homework before the seminar and don’t rush your decision—let it percolate a while. A good investment will be available tomorrow or next week or next month…when you are ready and when you understand exactly where your money is going. Ask plenty of questions so you know what you’re buying as well as the risks and costs.
And don’t let anyone tell you that you need to move your 403(b) or IRA with WEA Member Benefits somewhere else when you retire. You do not have to move your 403(b) or IRA account when you retire or change jobs…even if you change careers. We will still be here to serve you. You can stick with us up to and through retirement.
Let your retirement savings rest
Have you ever pulled out a roast from the oven and were so hungry you cut into it right away? Chances are it was probably drier or tougher than you expected because you didn’t give it a little time to rest first. Patience is a virtue in cooking as well as saving for retirement. Withdrawing early from your retirement savings can be tempting at times, but it should always be your very last resort. If you pull funds out early, you’ll lose principal and interest, and you may lose tax benefits or have to pay withdrawal penalties. You can borrow money for things while you’re working, but you can’t borrow money for retirement.
Avoid the pressure cooker: A good investment will be available tomorrow or next week or next month.
Cook up a plan for the unexpected
When preparing a holiday meal, sometimes the unexpected happens…like you thought the turkey would be thawed in time, or a relative invites “just a few friends” to join in at the last minute.
Preparation and flexibility are keys for coping with those situations as well as for retirement planning. Health care costs are a major consideration that many people underestimate. Fidelity’s 20th annual Retiree Health Care Cost Estimate reveals that a 65-year-old couple retiring this year can expect to spend $300,000 in health care and medical expenses throughout retirement. For single retirees, the 2021 estimate is $157,000 for women and $143,000 for men. And the COVID-19 pandemic has prompted many to accelerate their retirement plans, which means paying for health care insurance until qualified for Medicare.
Inflation and the uncertain future of Social Security are other factors to consider. That makes it all the more important to make personal savings part of your retirement plan.
If you find you’re more limited in what you can afford to do in retirement than you expected, you may need to be more flexible. It could be you need to delay retirement for a while, move to a smaller place or cheaper locale, or work a part-time job.
Fold in a flexible mindset when it comes to your plans and expectations for retirement.
This may also help you postpone claiming Social Security or cover expenses during a market downturn. Weigh out all the opportunities available to you. Staying active by working or volunteering can also be a great way to pursue an interest or gain a new one, meet new people, and remain socially connected and challenged.
Mix in a financial advisor
According to the Department of Labor, only 40% of Americans have calculated how much they need to save for retirement. That’s likely because it’s just not always easy. One of the most challenging aspects of creating a solid retirement plan is striking a balance between realistic return expectations and a desired standard of living.
The financial advisors at Member Benefits can help you anticipate your future tax liability, get a real picture of your assets and challenges, and help you make necessary changes now before you retire. For Wisconsin public school employees, it’s important to work with someone who has a thorough understanding of 403(b) savings accounts and WRS, such as the financial advisors at Member Benefits.
Sometimes a little help goes a long way. If you’re looking for guidance on whether your portfolio aligns with your current goals, or if you want to explore your tolerance for risk, decide on investment objectives, determine your retirement expenses and income, or discover whether you’re on track for retirement, we have a service for you.
No matter what your age, be sure to do your research and educate yourself using reliable resources. Member Benefits is an excellent place for retirement information. Visit our learning center to access articles, eBooks, calculators, informational brochures, an interactive budget worksheet, and more. And feel free to call us with your retirement questions at 1-800-279-4030.
Your recipe for retirement is personal and unique, just like Grandma’s special apple pie. If you pick up some tried and true ingredients and follow the recipe directions, you can accomplish your goals and create a satisfying retirement.
Your retirement recipe
- Save early and save more when you can.
- Use the personal savings options available to you. WRS and Social Security aren’t enough.
- Determine whether your savings goals match your retirement goals.
- Know all the fees you’re paying in your retirement savings accounts.
- Be cautious about certain retirement products and “the free lunch.”
- Don’t touch your retirement savings account until you retire if at all possible.
- Prepare for the unexpected in retirement and build in some flexibility.
- Consider working with a WEA Member Benefits financial advisor.
- Keep learning from reliable resources like Member Benefits.
Considering a financial advisor?
Ask questions first. Learn more about how to begin your financial advisor search.
Understanding your 403(b)
What is a 403(b) plan?
A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools and certain other 501(c)(3) tax-exempt organizations. It allows employees to contribute some of their salary to the plan, and the employer may also contribute to the plan for employees. As of 2018, 403(b) plans covered around one in five U.S. employees who have around a trillion dollars of savings.
How it works
A 403(b) can be a great way to save for retirement. It is similar to the private sector’s 401(k). A salary reduction agreement (SRA) must be completed to start payroll contributions into your 403(b) account.
Your district may offer an employer match. In other words, the district matches your contributions. For example, it could be fifty cents on the dollar up to a certain level, a flat amount, or many other types of options.
Whatever kind of match your district offers, if you’re not putting money into your 403(b) and there’s a match, then you may be leaving money on the table.
The most an employee can contribute to a 403(b) account out of their salary in 2021 is $19,500. Those age 50 or over at the end of the calendar year can also make catch-up contributions of $6,500 beyond the basic limit on elective deferrals. If permitted by the 403(b) plan, an employee who has at least 15 years of service with the same eligible 403(b) employer may be able to contribute an additional $3,000. Learn more about contribution limits.
Some districts offer a Roth 403(b) option. Roth contributions are after-tax, which means you pay taxes now on your contributions, but all qualified* withdrawals, including earnings, are tax free.
This is different from 403(b) contributions that are made on a before-tax basis. Before-tax contributions reduce your taxable income and defer taxes until you withdraw the money.
One of the greatest benefits of Roth savings is the ability to reduce your tax liability in retirement.
For decades, the assumption has been that most people would be in a lower tax bracket in retirement and thus would benefit from before-tax savings. However, changes in tax policy, including lower tax rates, the taxation of Social Security, and other deductions available under the tax code increase the chances that you could be in the same or higher tax bracket when you retire.
These changes mean that before-tax savings alone may not be the optimal tax strategy in every situation.
So the question is, do you want to pay the taxes on your contributions now or when you retire?
Exchanges, transfers, rollovers
You can move funds from another retirement plan into a WEA Tax Sheltered Annuity Trust 403(b) account, but the way these are handled is based on the type of retirement plan you have and your school district plan documents.
An exchange, if allowed by your school district plan, is when you move 403(b) funds from one district vendor to a second district approved vendor while employed by the same school district.
A transfer, if allowed by both your current and former school district plan, is when you move your 403(b) funds from a previous employer’s plan to your current employer’s plan.
A rollover is when you move funds from a different type of retirement account, such as an IRA, 401(k), or 457(b), to your current employer 403(b) plan. Check with us to see if rollovers are allowed into your employer’s plan.
It is also important to remember that a Roth 403(b) can only receive funds from another Roth 403(b) or Roth 401(k).
We can help you. Talk with a Member Benefits representative to discuss all the rules and procedures and to get your questions answered.
The importance of saving
As a Wisconsin public school employee, you have the Wisconsin Retirement System (WRS) and Social Security for retirement. But the two alone are not enough. On average, Social Security payments make up only about 14%–28% of retirement income for those who receive WRS. To build a secure retirement, you need three things: WRS, Social Security, and your personal savings, such as the 403(b).
Learn more about Member Benefits 403(b) program or enroll today.