401(k), 403(b), TSP and/or Pension Advice
There are many different types of employer sponsored retirement savings plans so it is important that you carefully read and understand the plan documents for your plan. If needed, Hunt Country Wealth Management will assist you with understanding the details and often complex language used in plan documents.
Employer-sponsored retirement plans are generally categorized as Defined Benefit Plans or Defined Contribution Plans
Defined Contribution Plan
Because Defined Benefit Plans are more costly to the employer most have scaled back dramatically or switched to a Defined Contribution Plan over the years. The Defined Contribution Plan specifies how much money will go into a retirement plan today. The amount is typically a percentage of the employees salary or a specific dollar amount, and then those funds are typically invested into a mutual fund available inside the retirement plan. The amount the employee has at retirement depends on how much the employer contributed to the plan, how much the employee contributed and saved in the plan, how long those funds were investe, and how well the investments performed inside the participant’s selected plan. Although the term Defined Benefit Plan may be unfamiliar, they come in many familiar forms such as 401(k), 403(b), or TSP Federal/Military Pension Plans.
These plans are offered by many private or for-profit employers as a retirement savings plan for their employees. In these plans, the employee saves money toward retirement on a tax-deferred basis, meaning they don’t pay taxes on their savings or their investment earnings until they withdraw the money at retirement. The contribution limits, vesting schedule for employer matches, investment options and many other details can differ depending on how the employer setup the 401(k) plan. Your 401(k) can be a cornerstone of your retirement planning strategy, so it is important that you read and understand the plan documents for your particular plan carefully. Hunt Country Wealth Management can assist you with understanding and optimizing your 401(K). Upon an employment change, you can rollover your 401(k) to other IRAs or 401(k) plans.
Defined Benefit Plan
As a certified Behavioral Financial Advisor™, Chris Merchant is trained to help clients make better decisions throughout the financial planning process by aligning the plan with each client’s personal values while helping them achieve their goals along the way. The BFA™ designation integrates concepts of traditional finance, psychology and neuroscience as it relates to personal finance. Behavior Economics has been awarded the Nobel Prize six times since its inception in 1968. Per Vanguard’s Alpha Study*- Good advice from a financial advisor is worth around 3% in net returns. 1.5% comes from Behavioral Coaching. So half the value a good advisor brings to the table is helping clients manage their behavior and make better choices.
These plan are offered to employees of tax-exempt or non-profit organizations such as public school teachers, colleges, hospitals, colleges and churches. 403(B) Accounts generally fall into one of three categories.
- Tax Deferred Annuities or Tax-Sheltered Annuities. These are simply a type of annuity contract provided by insurance companies as a type of 403(b) investment to provide income later in life.
- A custodial account at an appropriate financial institution such as a brokerage firm, which holds the securities of registered investment companies such as mutual funds. This has become the most common type of 403(b) retirement plan.
- A retirement income account that lists either type of investment option as a choice for the owners of the 403(b) accounts; that is, they can either invest in securities such as mutual funds or eligible annuities.
Your 403(B) can be an important part of your overall retirement plan and it is important that you carefully read and understand the plan documents for your 403(B) plan. Hunt Country Wealth Management can review 403(B) plan and plan documents with you to make sure you take full advantage of this tax-advantaged retirement savings tool.
As with most employer sponsored plans upon an employment change you can rollover your 401(k) to other IRAs or 401(k) plans.
TSP, Pension Plans
At Hunt Country Wealth Management, we help you determine the probabilities of success for your financial objectives, assess risk levels and strategize a plan to help reach your goals and Protect & Preserve your resources. We offer signature fee-based planning processes such as The Retirement Navigator™ and the Personal Wealth Plan™ which help manage the complexities of certain points in your financial life, such as at retirement, and plan out strategies for income distributions. We use traditional risk management approaches such as insurance (life, long-term care, disability). We also incorporate Behavioral Coaching to help you make better decisions with your money.