Making Your Money Work for You
By Scott Culver
Communications Specialist
WEA Trust
December 2002
Much like starting a diet, saving for retirement is easy to put off until
tomorrow.
However, saving for retirement now is the best way to afford the things
you want later in life. As a public school employee, you can participate
in a tax-sheltered annuity (TSA) program such as the one offered by the
WEA Trust. A TSA combines two important benefits:
- The power of compounded growth.
- The efficiency of tax-deferred savings.
These two principles make a TSA an attractive vehicle for saving toward
retirement. The accompanying graphic illustrates the impact over time
that saving money each month can have on your retirement savings. And
socking away your money on a tax-deferred basis means your earnings grow
tax-free until the time of withdrawal.
At the same time, because TSA contributions are made on a pre-tax basis,
you can immediately reduce your tax bill. For example, if you contribute
$100 per month to a TSA, you save roughly $27 on federal and state income
taxes (assuming a 27% tax bracket). In essence, your $100 contribution
costs you only $73.
Why choose the Trust?
The WEA Trust’s tax-sheltered annuity (TSA) program offers 13 mutual
fund choices, many of which are not otherwise available to Wisconsin public
education employees in a TSA, and a guaranteed investment. You select
your investments based on your personal tolerance for risk.
While many vendors offer a TSA account, only the Trust’s TSA program
was designed with the needs of WEAC members in mind. This sets us apart
in many ways:
- We understand teachers may have limited discretionary funds, so we
let you start a TSA for as little as $200 per year, or about $10 per
paycheck.
- As a not-for-profit organization, the Trust is not out to make money
for itself. Your money is not spent on commissions, excessive sales
or marketing campaigns. Our mission is to help you achieve your financial
goals.
- We assist with your retirement planning every step of the way. The
Trust’s retirement consultants can help you start a TSA and devise
an investment strategy that reflects your long-range goals and tolerance
for risk.
- As a member-oriented program, the Trust keeps its costs minimal and
discloses all fees up front. You will find no hidden fees, withdrawal
charges, or surprises when moving money in or out of an account.
For more information on our TSA program, visit our Web site at www.weatrust.com
or call us toll-free at 800-279-4030.
What is a TSA?
A tax-sheltered annuity, or 403(b) plan, is a tax-deferred retirement
plan available to employees of educational institutions and certain non-profit
organizations. You set aside money on a pre-tax basis through a salary
reduction agreement with your employer, and your money grows tax-free
until you withdraw it at retirement.
How to start a Trust TSA
Your employer has a list of available tax-sheltered annuity (TSA) providers.
The Trust’s TSA program is open to public education employees in
more than 400 Wisconsin school districts. To start a TSA account with
the Trust, go to www.weatrust.com and click on “Start your tax-sheltered
annuity account now.” You may also contact us by phone at 800-279-4030
or via e-mail at tsa@weatrust.com
to receive an enrollment kit.
WEAC IRA is a good savings option
Another great way to save for your future is an IRA.
The WEA Trust offers two types of IRAs: traditional and Roth. Traditional
IRAs give you tax-deferred growth and possible tax deductibility now,
while Roth IRAs offer tax-free earnings for qualified distributions.
For information on setting up an IRA with the Trust, call toll-free 877-962-8472.
The WEAC IRA is open to WEAC members, their spouses, and dependent children,
and even parents of members and their spouses.
For 2003, the WEAC IRA will offer a guaranteed interest rate of 5% (the
effective annual yield before deduction of program fees). Participants
have until April 15, 2003, to contribute for the 2002 tax year.
Posted November 15, 2002