One of the biggest benefits of working for a large university is having access to an often generous retirement plan or system. Depending on whether you are employed with a public or private university is part of what will determine whether you have a state pension system or a private retirement plan. While these plans can be a huge benefit for employees, it is important to understand that they may not fulfill all of your future retirement needs. Depending on your rate of savings and interest earned, your retirement could be grossly underfunded. Even if you have a state pension plan, (STRS in Ohio is a good example) your retirement benefit for 30 years of service is only 66% of your Final Average Salary (30 X 2.2 = 66%). This means if you aren’t properly planning you could expect a dramatic change in your income, and potentially your standard of living. While in theory our expenses should go down in retirement, with inflation, healthcare costs, and the desire to travel and enjoy the fruits of our labor, most clients desire to maintain a similar income. To combat these potential pitfalls we recommend starting with a retirement analysis, so estimate what income you should expect to earn in retirement to account for inflation. From there, you can make educated and informed decisions about your contributions and investments. Most universities offer an option for additional savings or a “supplemental” retirement account. This often is just made up of your contributions with no employer match. These supplemental contributions can be made pre or post tax depending on your preference.
University Wealth Advisors specializes in working with university faculty/staff to structure retirement plans. This includes social security analysis, insurance planning, or investment management. We often work through the approved vendors with your employer. If you are interested in a complementary retirement analysis or talking through how you should structure your retirement contributions with your employer, please fill out the contact form below, and a registered representative will contact you shortly. We look forward to helping you create wealth!