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Higher Ed Retirement Plan: Breaking the Assumption You Must Stick with Current Vendor At Retirement

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Greetings! Greg Shepard here, your guide to unlocking the mysteries of higher ed retirement plans, representing S&A Financial Services. Today, I'm here to share a crucial piece of knowledge, especially for those approaching retirement. It's about the freedom to make choices, and not simply following assumptions. Let's jump right into it.

The Power of Choice

In our recent experiences, we've encountered a surprising trend among soon-to-be retirees in the higher education sector. A significant number of them, and maybe you're among them, have a shared assumption – that they must leave their retirement savings with their current vendor, often in this case, TIAA. But let me clarify something very important: you don't have to make this choice simply based on habit or expectation. In fact, there's a world of possibilities waiting for you.

The truth is, when you separate from your employer and embark on retirement, your retirement savings don't have to remain locked with your current vendor. The key here is understanding that your hard-earned money is your money, and you have the freedom to explore alternative options that may better align with your retirement goals.

This principle doesn't only apply to TIAA; it extends to every retirement plan vendor you might have in higher education. The key takeaway: don't make any assumptions, and don't stick with a vendor simply because it's what you're used to. Your retirement plan should be a tailored fit for your unique needs.

What Do We Mean by Choice?

Before we delve deeper into why you should consider exercising this power of choice, let's understand what we're talking about.

When you retire, it's natural to think about your financial future and how to manage your retirement accounts. The common approach is to leave your retirement savings with your current vendor, like TIAA, believing it's the easiest option. It's like staying in a comfortable but somewhat rigid relationship out of habit, even if you've evolved.

However, there's a world of opportunities beyond your current vendor. It's akin to navigating the dating scene again, and the idea isn't to break up with TIAA or any other vendor. Instead, consider it as an opportunity – diversifying your investment relationships to achieve a more dynamic and tailored approach to your retirement.

Unlocking the Potential

Imagine the possibilities that open up when you embrace the freedom to diversify your retirement accounts. This isn't about severing connections with your current vendor; it's about taking the wheel and making the best choices for your future. Here are a few reasons why this is advantageous:

1.     Expanded Investment Options: Different vendors offer various investment options. By exploring alternative vendors, you can access a broader range of investments, which might be more aligned with your retirement objectives.


2.     Risk Management: By spreading your investments across different vendors, you can mitigate risks. Diversifying your holdings is a well-known strategy for managing risk, and your retirement savings are no exception.


3.     Income Control: Having your retirement savings diversified across vendors offers you more flexibility in how you structure your retirement income.


4.     Strategic Withdrawals: Different vendors have different withdrawal rules. By having multiple vendors, you can strategically decide where to withdraw from based on your financial needs, potentially optimizing tax advantages.

Efficiency and Personalization

In my experience, the most efficient retirement game plan often involves a combination of different vendors. One key player for many of my clients is Charles Schwab, where we custody our assets. Alongside Schwab, we leverage the strengths of what TIAA does best, creating a dynamic and personalized retirement strategy.

By integrating these different players, we can craft a retirement approach that's truly tailored to your unique needs and goals. No one's financial situation is identical, so your retirement plan should be a reflection of your individuality. This approach can offer not only greater efficiency but also the ability to adapt your strategy as your retirement journey unfolds.

Remember, the goal isn't to abandon your long-standing relationships with vendors like TIAA. Instead, the aim is to embrace the benefits of diverse partnerships, allowing you to tap into various strengths and resources.

Navigating the Transition

Let's clarify how this process might work when transitioning to retirement. As mentioned earlier, retirement doesn't mean a final departure from your current vendor, but rather a reconfiguration of your financial relationships.

Diversification: You can explore a diversified approach, moving your retirement savings across multiple vendors. While one vendor might excel in certain areas, others could offer unique benefits that align with your financial goals.

Tailored Withdrawals: When it's time to start drawing from your retirement accounts, you can strategically choose from which vendor to withdraw. This isn't just about maximizing returns but optimizing your tax liabilities and preserving your wealth.

Reduced Costs: Competition among different vendors can drive down management fees, benefiting your overall portfolio. Paying fewer fees means more money in your pocket, and during retirement, every dollar counts.

Access to Better Investment Options: Various vendors offer different investment options. Exploring alternatives allows you to access a broader and potentially more profitable array of investments.

Mitigated Risk: Diversifying your retirement savings across multiple vendors can help spread risk. If one vendor underperforms, the others can compensate.

Conclusion: The Future Is Yours

In conclusion, my message to you in higher education, is one of empowerment. As you approach retirement, don't be guided by assumptions. You have the power to shape your financial future.

You don't have to leave your retirement savings with your current vendor, no matter how long you've been with them. Explore the diverse world of possibilities awaiting you. Imagine the potential for expanded investments, efficient strategies, cost savings, and the freedom to align your retirement plan with your unique goals.

This isn't about severing relationships; it's about designing a financial future that meets your specific needs. The future is yours to craft. So, take charge of your retirement plan and make the choices that will pave the way for a more secure and fulfilling retirement.

If you have questions, thoughts, or need guidance, remember that I'm just a message away. Your financial future is worth every bit of attention, and I'm here to assist you every step of the way.

So, seize this moment, embrace the power of choice, and embark on your retirement journey with confidence and purpose. Your financial future has never been brighter.

Contact Information: If you have questions or need assistance with your retirement plan choices, you can reach out to Greg Shepard at greg@shepardfiancial.com

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*Nothing discussed in this blog post should be construed as investment advice.  Each situation is unique and you need to receive professional advice from independent fee-only financial advisor that's familiar with higher ed retirement plans prior to implementing any strategies discussed or thought of on your own.  

**S&A Financial Services, Inc. is a registered investment advisor. Content presented is for informational purposes only and should not be considered as investment advice or as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Always consult with your tax advisor or attorney regarding your specific situation.

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