Financial consultations not just for retirement

When Sara Thomas was on the front lines as a financial consultant with TIAA, she recalls, she worked with a couple who had been married for six years and had never looked together at the beneficiaries listed on the husband’s Pitt retirement plan. Sitting down with Thomas, they discovered the beneficiary on his plan was still his ex-wife. They changed it just a month before the man unexpectedly died.

Today, as financial consultant director at TIAA Institutional Financial Services — overseeing the consultants available to meet and speak with any Pitt employee — Thomas knows that retirement is just the last time, not the first time, employees need to examine their TIAA account.

According to Thomas, many people don't know how to answer crucial financial questions without talking to an expert: “Am I on track for retirement? Am I invested appropriately? Am I saving enough?”

“One of the things I have tried to do (as a consultant) is to make everybody feel comfortable,” Thomas says. “We’re not here to tell you what to do. We’re not here to judge you. We’re here to help you make informed judgments about your financial future.”

TIAA consultants are here on campus, visiting various campus locations to meet with employees — most often the William Pitt Union and Craig, Salk and Benedum halls. Pitt employees also can call for a phone consultation or have an online session, or visit TIAA’s office in East Liberty’s Bakery Square.

The University Times spoke with Thomas about the best moments, and best ways, to take advantage of the service.

When should Pitt employees seek a consultation about their retirement plan?

When there is a major change in your life, you might want to change your retirement savings plan, Thomas says.

That includes changes that come early in life, such as having to take on, or pay off, student debt, marriage, having a baby or buying a new house.

Are there events we may not realize are occasions for a consultation?

A job promotion is always welcome, but may not seem to be life changing. However, if the promotion comes with an increase in income, Thomas advises, people should plan how best to spend the extra dollars. Without planning, we tend simply to spend more, so that the raise becomes part of our expenses. If the new income were to go away, we may not be able to replace it immediately. That’s why it is best to place a portion of that increase in retirement savings, she says.

Should employees seek a consultation even when there is no life-changing event?

“Once a year for most people is most appropriate,” Thomas says.

Are there certain financial topics people find hardest to understand?

Asset allocation, which is the idea of spreading your assets among investments and taking the right amount of risk based on your age and your goals. “It’s amazing how many people we meet who have been in the University for 15, 20, 25 years and have never changed their allocations,” she says.

How early should employees plan specifically for retirement?

Planning for retirement should begin in the last 10 years of your career, she says. Those in their final decade of work generally shift to a more conservative investment strategy, since by then there may not be enough time for retirement accounts, which generally are invested in stocks and bonds, to recover from any severe market downturn. Spending and saving habits also sometimes must be adjusted, Thomas says.

How separate are TIAA advisors from the funds about which they advise?

Financial consultants will offer specific investment recommendations only when an employee is very near retirement, Thomas says. TIAA recommendations will be based on what Thomas labels “very high-quality investment software, generated by an unbiased third party,” Morningstar.

What is TIAA’s top advice for people who believe they can’t afford to save at all?

The first rule of thumb, she says, is to think of your retirement savings as a way to avoid paying taxes on a portion of your income, since contributions to a TIAA account come out of your paycheck before your gross pay is taxed.

Also, Thomas advises: “Take full advantage of the free money the employer is willing to give you.” If you take no action as a new employee, your retirement savings contribution will be 3 percent. But Pitt will actually match your contribution up to 8 percent initially, and by a greater amount once you are vested — once you have completed 1,000 hours of work while a plan member across three consecutive years.

Any final advice?

“For many of us retirement seems far away, so we tend to put off addressing retirement needs,” Thomas says. “Managing our finances and serving our financial futures should always be front and center.”

Employees with Pitt retirement accounts can schedule a meeting with a TIAA consultant online here or by calling 800-682-9139, 8 a.m. to 10 p.m. Monday to Friday, and 9 a.m. to 6 p.m. Saturday. Employees close to retirement can schedule a retirement-specific appointment via www.tiaa.org/moc or by call 877-209-3136 or 412-365-3000.

The website for managing employee retirement accounts is also available here. TIAA maintains an online retirement income planner and retirement advisor here.

Contact

Marty Levine, martyl@pitt.edu, 412-758-4859