UIndy has a great benefits package! As this is now open enrollment season, I felt it was a great time to create a series of posts (will be 4 total) to help you to better understand your benefits and to explain some of the different options that you have. You have until February 9th to make and change some of your elections. This post will touch on the Retirement plan, your Life Insurance options, and UIndy’s Disability Insurance program.
University Of Indianapolis Retirement Plan
This benefit is available to all eligible employees. When you are investing inside of this plan, you may choose Fidelity, TIAA-CREF, or a combination of the two. This account is immediately vested, meaning if you were to leave the university, your money AND the employer contributions travel with you into an IRA or into a new plan with your new employer. The following shows how this account is to be funded:
- 1-10 years of continuous service: University 8%, Employee 3%
- 11-15 years of continuous service: University 9%, Employee 4%
- 16 or more years of continuous service: University 10%, Employee 5%
You must contribute your employee percentage to get the university contribution (think of it as a match). This is a very generous retirement benefit! As an employee, you have an opportunity to accumulate significant wealth.
Some items that should be considered:
- Do you know how much risk you are taking in your portfolio? This is a great time to do a risk audit on your portfolio, as the markets have seen a sharp decline to start 2016. Have your retirement accounts been negatively affected? While working with our clients, we help them to reduce their risk exposure while still capturing upside potential.
- Are your investment selections working together efficiently? Do you any investment accounts outside of your retirement plan with UIndy? A sound financial plan will identify which investments should be held in which account type. Asset location is an important component of investing that is often overlooked.
- As a UIndy employee, you have the unique opportunity to work with a financial advisor to craft a sound portfolio. A recent study shows that people that sought help with their retirement plan investments earned an average median return of 3.32% higher than those who did not seek help—even after they paid the fees for that advice. Would you like to get a second opinion on your investment selections?
Tax-Deferred Annuity Plan
This account is very similar to the above plan except that it doesn’t include any contributions by UIndy. It is strictly employee contributions. This may be a good place to invest if your current year tax situation suggests that you should make additional tax-deferred contributions.
Group Term Life
Regular full-time faculty and staff are provided with group term life, paid for by the university. You may elect coverage equal to two times your annual pay (max of $250,000) or a flat $50,000. For many families, this is enough life insurance. For others, it may be not enough to cover their “unfinished financial business.” Have you ever had a life insurance needs analysis done? Most people have never really established what they want their life insurance program to take care of in case of an unexpected death in the family. Often times, we hear that people want to take care of any debts, help their spouse to have enough capital to keep on with their current lifestyle throughout retirement, or to pay for their children’s college expenses. This insurance analysis is as unique as you are. Do you know if you have enough life insurance? Maybe you have too much and/or are paying too much for the amount you currently have. A sound financial plan includes a life insurance needs analysis to help remove the guesswork from the equation.
The university also offers regular full-time employees with voluntary life insurance (often referred to as supplemental). This insurance is paid for by the employee. If you elect to take advantage of this option during your initial enrollment, you do not have to answer any medical questions and cannot be declined coverage. If you choose this option, it may be cost-effective for many employees. However, it is important to review with an advisor on an ongoing basis whether the amount you are paying for these policies is the most cost-effective way to remain insured.
Why would you need this coverage? The Social Security Administration estimates that 3 out of 10 Americans entering the workforce will become disabled before they retire. I don’t know about you but that statistic startles me. Are you protected enough in case you are temporarily unable to work? At UIndy, you can elect coverage that will cover up to 60% of your “covered weekly earnings” not to exceed $1500 a week. Is this amount of coverage enough to insure your family is protected? Do you know?
This benefit is completely covered by the university and your enrollment is automatic. Your long-term disability insurance will pay benefits after six months of continuous total disability. You may receive 60% of your “covered monthly earnings” up to a maximum of $10,000 a month. This is an important benefit, as your most important asset is your ability to earn income. According to the Bureau of Labor Statistics, 68% of private sector workers do not have Long-Term Disability coverage as a part of their benefits package. It’s fantastic that UIndy is offering coverage to you!
Thank you for reading part 1 of this 4 post series. I hope that you found it helpful. At Integrity Wealth Advisors, we build lasting relationships through a unique financial planning experience. I would love to sit down with you for a no-obligation consultation. Click here to set up a time to connect. I’d be happy to treat you to a coffee at Schwitzer!
The next post in the series will focus on investment selections and whether they are properly aligned to help you reach your financial goals.