Financial
Planning
Selecting a Payroll Reduction Plan
FIRST: Become familiar with your school district's
procedures and requirements. Many school districts have a list of existing
products from which you must choose, forms to use, and a prescribed procedure
to follow.
SECOND: Determine which of the following
types of investments you wish to consider. Then determine which products
on your school district's list are included under that type:
- WEA TAX-SHELTERED ANNUITY TRUST: (800-279-4030 or 608-276-4000) In 1978, WEAC created the WEA Tax-Sheltered Annuity Trust to find the best available fixed (guaranteed) rate plan. Being non-profit and avoiding commissions to insurance agents, the WEA TSA is considered the best fixed-rate plan available to members. For 2007, their fixed rate is 5%.
The WEA TSA also has 16 no-load mutual funds from several nationally known mutual fund families and five Vanguard target retirement date funds that members can choose to use in addition to the fixed account.
- WISCONSIN DEFERRED COMPENSATION PROGRAM (457 Plan) managed by the Department of Employee Trust Funds. A wide spectrum of investment options in addition to a self-directed brokerage option. Telephone 608-256-6200 or 800-257-4457. Web site www.wdc457.org
- MUTUAL FUNDS: If you are not concerned with guarantees and
are looking for maximum investment flexibility with minimum costs, you
might consider using a mutual fund family. Mutual funds operate
according to stated policies and objectives set forth in a prospectus.
Investors can choose mutual funds with investment objectives and risk
levels corresponding to their own. No-load mutual fund families that
have TSA options include American Century (800-345-2021),Fidelity (800-343-0860),
Janus (800-525-3713), Invesco (800-525-8085), Scudder (800-225-2470), Strong (800-368-1030),
T. Rowe Price (800-638-5660), and Vanguard
(800-662-7447).
I do not recommend life insurance company tax-sheltered annuities. The fees and transfer penalties are too high.
