The CTA Educator s Retirement Planning Guide

Transcription

1 The CTA Educator s Retirement Planning Guide o

2 A Message from Eric C. Heins Dear Colleague, Today could be one of the most important days of your life if you start setting aside some money for your retirement through a 403(b) or 457 plan. An important part of the California Teachers Association (CTA) mission is to protect and promote the well-being of its members especially when it comes to helping you prepare for a more secure retirement. If you think your pension benefit has you covered, consider this. While CalSTRS (California State Teachers Retirement System) and CalPERS (California Public Employees Retirement System) offer you valuable pension benefits, neither will replace 100% of your pre-retirement income. And, if you re covered by CalSTRS, you do not pay Social Security taxes on your income. That means you would get no Social Security retirement benefits for your CalSTRS-covered employment. Saving for retirement can be hard. After paying the bills, you may think there s not much left over. But you can do it. And, if you start now, even starting small can make a big difference. This retirement planning guide can help you no matter how close to retirement you are. It can help you make informed decisions and boost the power of every precious dollar you save for retirement. Inside you ll find simple ways to start saving for retirement, clear explanations of investing basics, and an array of resources you can turn to for more information. You ll also find tips to help you avoid insurance annuities and mutual funds that promise big returns but charge high fees and commissions. Take a close look at the section about the CTA-Endorsed Retirement Savings Plan the new 403(b) plan exclusively offered by CTA. This best-in-class plan offers high-quality investment options, very low fees, complete transparency, and no conflicts of interest all plan decisions are made solely in the interest of our participants. Please review this retirement planning guide and take advantage of the tools CTA provides to help you prepare for tomorrow. Your retirement should be an enjoyable reward for a fruitful career and CTA is committed to helping you get there. Sincerely, Eric C. Heins President Contact Us CTA Risk Management/Business Initiatives & Development Department 1705 Murchison Drive Burlingame, CA business_initiatives@cta.org Phone: ii Copyright 2016 California Teachers Association Economic Benefits Trust

3 What s Inside Start Saving (or Saving More) Now!... 2 If you think your pension and Social Security are enough, think again! Get a clear picture of the benefits you get and the gap those benefits may be leaving. Make a Great Choice... 7 Get acquainted with the new 403(b) plan exclusively endorsed by CTA that is designed with you in mind and how it can help you prepare for a more secure retirement. Pick the Approach That Works for You Consider these two different approaches designed to help you build a secure retirement feel free to jump ahead to this section to get started! Do It For Me See how target date funds offer you an easy, hands-off approach to investing based on your time to retirement. You also may have access to managed accounts, where professional investment consultants manage and monitor your plan investments for you. Do It With Me If you prefer to take more control of your retirement investments, this hands-on approach also comes with plenty of tools, resources and examples to help you choose your own investment mix from a core menu of investment options. Enrolling in the CTA-Endorsed Retirement Savings Plan Is Easy It s a convenient two-step process. Appendix: Things Every Investor Should Know... Investment Risks. Diversification. Investment Options. The Promise and Pitfalls of Annuities. Fees and Commissions. Vendors. If you re new to investing, need to make a change, or just need a refresher, skip to this section. 26 1

4 Start Saving (or Saving More) Now! You don t want to wait until you reach age 65 to discover you can t afford to retire. Building your retirement nest egg requires regular savings. And there s no better time to start saving than right now. If you re already saving, great! Try saving a little more. My retirement goal: Travel the world. Did you know that experts estimate you ll need 80% to 100% of your pre-retirement annual income just to maintain your standard of living in retirement? When estimating how much money you ll need to save for retirement, consider this: Financial experts recommend you will need 80% to 100% of your pre-retirement income just to maintain your current lifestyle during retirement. You may need more than that if you have expensive hobbies or plans. The Employee Benefit Research Institute estimates that a married couple that retired in 2015 at age 65 may need up to $392,000 in retirement savings just to cover health insurance premiums and out-of-pocket medical expenses during retirement. The average age of retirement for CalPERS members is 60; for CalSTRS, it s 62. That means you could easily spend 20 years or more in retirement without a paycheck. Recent CalSTRS members on average retired at age 62 after more than 25 years of service with a pension benefit that replaced about 55% of their final salary.* CalPERS members on average receive 30 39% of their pre-retirement salary in pension benefits.** CalSTRS participants can expect $0 in Social Security benefits for CalSTRS-covered employment. In addition, any Social Security benefits from a spouse s earnings or earnings from other jobs may be reduced by law. According to the Social Security Administration, the average retired worker received a monthly Social Security benefit of $1,341 in January 2016, or $16,092 a year. Most California educators are facing a retirement income shortfall. Saving through a 403(b) or 457 plan can help you bridge that gap. *Source: CalSTRS Member Handbook **CalPERS School Benefits 2

5 Although it s ideal to begin saving when you re younger, saving something is always better than saving nothing. And remember, your CalSTRS or CalPERS pension is not affected by any benefits you receive from a 403(b) or 457 plan. Closing Your Gap How much should I have in my nest egg? Ending Salary Supplemental Nest-Egg Savings You May Need Desired Income Replacement 60% 70% 80% 90% 100% $55,000 $64,000 $192,000 $321,000 $450,000 $579,000 $65,000 $76,000 $228,000 $380,000 $532,000 $639,000 $75,000 $88,000 $263,000 $438,000 $614,000 $789,000 $85,000 $99,000 $298,000 $479,000 $696,000 $894,000 $95,000 $111,000 $333,000 $555,000 $777,000 $999,000 The examples above prepared by RVK, one of the largest fully independent and employee-owned investment consulting firms in the U.S., assume annual withdrawals in retirement are equal to the desired income replacement, increasing by 2.5% per year to account for inflation; 4% investment return in retirement; and savings that last until age 90. Does not take additional income you may have into consideration. Pension benefits are based on your age at retirement, years of service and the amount you re earning at the end of your career. You can use the online calculators at calstrs.com or calpers.ca.gov to estimate your pension benefit amount. My retirement goal: Take more cruises. The CTA- Endorsed Retirement Savings Plan can help you save for the financially comfortable retirement you deserve. 3

6 Investing Early Pays Off Thanks to the magic of compounding, money saved earlier earns you bigger dividends later. Compounding simply means that when your original investment earns money (in the form of interest and dividends), those earnings can earn money too. Basically, your earnings are added to your original investment, and the total amount of your investment grows over time. As the example below shows, the added earnings can actually surpass your original investment. Compounding is a powerful force that works for you when you save and invest over many years. The chart shows the result of compounding interest if you invest $200 a month in a taxdeferred retirement account that earns a 4% annual return.* Contribution Earnings Total 10 years $24,000 $8,653 $ years $48,000 $43,129 $91, years $72,000 $123,851 $195,851 * Returns shown are for illustration only and do not represent the return of any actual investment. Your results will vary. Taxes will be due upon withdrawal, and early distributions may incur a 10% tax penalty (does not apply to 457 plans). Just saving $200 a month for 20 years shows your cash contributions to be $48,000, but with the earnings, your total balance would nearly double. That is the power of compounding earnings! 4

7 A Closer Look at Social Security For CalSTRS Participants If you re a CalSTRS member, you do not qualify for Social Security retirement benefits based on CalSTRS-covered employment. That s because you do not pay Social Security taxes. But you may qualify for Social Security benefits based on other employment or as a spouse, widow or widower. However, two federal rules may reduce any Social Security benefits you may be eligible to receive because of your CalSTRS pension benefits: The Windfall Elimination Provision (WEP) affects Social Security benefits that are based on your earnings. Social Security uses a different formula to calculate benefits for people who receive a pension from work where Social Security taxes were not taken out of their pay, generally resulting in a lower Social Security benefit. The Government Pension Offset (GPO) affects your spousal, widow or widower Social Security benefits that are based on your spouse s earnings. The GPO reduces the amount of your Social Security spouse s, widow s or widower s benefits by two-thirds of the amount of your CalSTRS pension. For CalPERS Participants Generally, CalPERS participants do pay Social Security taxes and are eligible for Social Security benefits at retirement. If you have always paid Social Security tax and contributed to your CalPERS pension for all earnings upon which your CalPERS (or any other pension) is based, your Social Security retirement benefit should not be affected. What Educators Need to Know about Social Security at CTAinvest.org Watch the Video 5

8 Get a Tax Break When You Save Contribution amount is $100, but net pay is only $67 less! When you contribute to a 403(b) or 457 plan, you ll get an immediate tax break because the money you set aside is deducted from your paycheck before federal and state income taxes are withheld. Suppose you are in the 25% federal tax bracket and 8% California income tax bracket, and your gross paycheck is $2,100. If you contribute $100 in a pay period, it doesn t reduce your take-home pay by $100. Instead, that $100 contributed to your account could lower your takehome pay by just $ (b) and 457 Plan Contributions Let You Save on Taxes NOW Regular semi-monthly paycheck with no plan contribution: With a pre-tax contribution to a 403(b) or 457 Plan: $2,100 Gross pay $2,100 Gross pay 33% Federal and state income tax $100 Contribution $1,407 Net pay $2,000 33% Federal and state income tax $1,340 Net pay Note that no local or other taxes are considered in this simple calculation. Actual tax rules will vary depending on income, number of dependents claimed, amount of contribution, etc. Use the How Will My Pre-tax 403(b) or 457 Plan Contribution Affect My Take-home Pay? calculator at CTAinvest.org. 6

9 Make a Great Choice CTA Offers a Supplemental 403(b) Retirement Plan for You At CTA, we believe you deserve a financially comfortable retirement, and we re committed to helping you prepare a secure retirement. CTA established the CTA Voluntary Retirement Plans for Educators (VRPE) to offer the new CTA-Endorsed Retirement Savings Plan a best-in-class 403(b) plan with high-quality investment options, very low fees, and plan features designed with your best interests in mind. The CTA plan offers: 1. High-quality investment options recommended and monitored by RVK, one of the largest independent investment consulting firms in the nation, based on each fund s performance track record, fees and stability. Investment choices are available for members of different ages and with different levels of comfort with investing. 2. A focus on what s right for you because plan representatives are salaried, not paid on commission. Their success is based more on your success than on what products you select. 3. Fiduciary standards to ensure that all recommendations and plan decisions are made solely in the interest of plan participants. 4. Low transparent fees. You pay a flat, annual record keeping fee of $65 and $15 for custodial account services. In addition, you will pay asset-based fees for the available mutual funds listed on page 9 or at CTAMemberBenefits.org/rsp. Any additional fees are clearly identified in the annual fee disclosure statement and on the CTA Retirement website: CTAretirementplan.org. 5. Resources to help you make informed decisions. If you have any questions about the CTA-Endorsed Retirement Savings Plan, please call the CTA Retirement Plan Center toll-free at , 8 a.m. to 6 p.m., Pacific Time, Monday through Friday. Dedicated education representatives with expertise in 403(b) plans are available to answer questions on topics such as enrollment, exchanges and rollovers. CTAinvest.org offers many tools and useful information to help with your retirement savings strategy, including online articles, calculators, frequently asked questions and a series of short videos on topics such as Social Security, 403(b) plans and choosing a financial advisor. For other questions, call the CTA Member Benefits Department at You ll find more information about the CTA-Endorsed Retirement Savings Plan on page 8. 7

10 Enroll in the CTA-Endorsed Retirement Savings Plan The CTA-Endorsed Retirement Savings Plan is designed to help educators like you save for the financially comfortable retirement you deserve. CTA used a best practices approach to develop this best-in-class 403(b) plan. The plan offers a diverse yet easy-to-understand menu of high-quality, low-fee investment choices. There are no insurance contracts, no conflicts of interest and no commissions. (You can enroll online or by completing a paper form. Find out how on page 18.) Quality Investment Options The target date funds and core funds offered in the CTA Retirement Savings Plan are recommended and monitored by RVK. You can have confidence knowing that CTA has actively engaged RVK, one of the largest fully independent and employee-owned investment consulting firms in the U.S., to provide these services for plan participants. Investment Choices Designed for You The plan includes a variety of investment options that are based on your age and comfort level with investing options with your needs in mind. If you prefer a hands-off approach: Target date funds are professionally managed and offer an easy, hands-off approach to investing based on when you plan to retire. Your Fund Options Premixed Portfolios Target Date Funds Suggested Range of Birth Years for LifePath Funds* Asset-Based Fees** BlackRock LifePath Index Retirement Born before % BlackRock LifePath Index 2020 Born 1/1/ /31/ % BlackRock LifePath Index 2025 Born 1/1/ /31/ % BlackRock LifePath Index 2030 Born 1/1/ /31/ % BlackRock LifePath Index 2035 Born 1/1/ /31/ % Do It For Me BlackRock LifePath Index 2040 Born 1/1/ /31/ % BlackRock LifePath Index 2045 Born 1/1/ /31/ % BlackRock LifePath Index 2050 Born 1/1/ /31/ % BlackRock LifePath Index 2055 Born after 12/31/ % * By selecting this option during enrollment, your contributions will be invested in a LifePath Fund based on when you reach the retirement age range of **Reported by each fund manager as of December 31, Not Sure Where to Invest Your Contributions? An age-appropriate diversified investment option is available if you are unsure where to invest your contributions. By selecting this option during enrollment, your contributions will be invested in a LifePath Fund based on the year you will reach age 61 to 65. 8

11 If you prefer a hands-on approach: Core funds allow you to create your own asset mix by choosing what type of funds to invest in and how much to invest in each fund. Or, you can use the CTA Model Portfolios as a guide. The Core Funds, recommended by RVK, a national investment advisory firm, offer the most choice and flexibility. You choose your own diversified investment mix from the Core Funds and decide how much to invest in each fund. Your Fund Options Core Funds Fund Type Fund Name Asset-Based Fees* Money Market Vanguard Federal Money Market Fund 0.11% Inflation Protection Bond Vanguard Inflation-Protected Securities Fund 0.10% PIMCO Inflation Response Multi-Asset Fund 0.70% Vanguard Total Bond Market Index Fund 0.06% PIMCO Diversified Income Fund 0.75% Small-Mid U.S. Equity Vanguard Extended Market Index Fund 0.09% Large U.S. Equity Vanguard 500 Index Fund 0.05% Do It With Me What Is the CTA Model Portfolio? CTA Model Portfolios illustrate how to take a hands-on approach in choosing your own investments from the plan s Core Funds based on clear examples provided by professional investment consultants. Refer to page 17 to view sample portfolios. International Equity Vanguard Total International Stock Index Fund 0.12% *Reported by each fund manager as of December 31, Log on to the CTA Retirement website at CTAretirementplan.org for details about the investment options, annual fee disclosure statement and available options to roll over or exchange any existing 403(b) plans you may already have. To confirm whether your district offers the CTA Retirement Savings Plan, check the CTA Member Benefits website at CTAMemberBenefits.org/rsp, log on to the CTA Retirement website at CTAretirementplan.org, or call the CTA Retirement Plan Center at (You are not permitted to open a new 403(b) account after you retire.) 9

12 What About Annuities? 24/7 Online Access to Your Plan Account You can access your CTA plan account 24/7 online at CTAretirementplan.org. If you need additional support, please call the CTA Retirement Plan Center toll-free at , 8 a.m. to 6 p.m., Pacific Time, Monday through Friday. For other questions, call the CTA Member Benefits Department at Insurance products such as fixed or variable annuities are generally not consistent with the CTA Retirement Savings Plan s objectives. Compared to other options in the plan, annuities tend to have higher fees, less transparency, and often have complex and difficult-to-understand fee and liquidity terms. The excessive fees associated with many annuity products make it more difficult for educators to save adequately for retirement. For information on fees, refer to page 34. Also, as the chart below illustrates, annuities typically underperform stocks, bonds and other assets over the long-term. Investing in the CTA Model Portfolios, for example, results in a significantly larger nest egg after 25 years than investing in a typical annuity. This is yet another reason why the CTA Retirement Savings Plan doesn t include annuities in its asset offerings. 10

13 Pick the Approach That Works for You While we re all trying to reach the destination of a financially secure retirement, each of us may need to take a different path to get there. The two approaches described in this section are just that: different paths that lead to the same destination. The path you choose depends on your age, your preferences and your comfort with making investment decisions. Do It For Me Leave it to the professionals. Here s a hands-off approach that features professionally managed target date funds. No time to actively manage your retirement plan account? Turned off by complicated investment options? Want to avoid the hassle of hiring a financial advisor or rebalancing your portfolio? Then this approach is for you. You simply choose one target date fund and you re done. What s a target date fund? A target date fund is a mix of investments that is carefully selected by professionals based on a target retirement date. Over time, that mix of investments adjusts automatically as the target retirement date gets nearer. This approach (called a glide path) makes sure your retirement portfolio favors growth in the early years when you can tolerate more risk (more domestic stock, international stock, etc.), and becomes more conservative (more bonds and/or income funds) as you get closer to retirement and need to preserve what you ve saved. The main advantage of target date funds is that you don t have to worry about monitoring and rebalancing your portfolio to account for changes in your risk profile and investment mix over time. The fund does the work for you. In addition, you don t need to choose the right mix of asset classes; target date funds are designed to be an all-in-one solution. How do I choose the right target date fund? Each target date fund has a year in its name. Just pick the target date that s nearest the year you plan to retire. For example, if you plan to retire in 2045, choose a target date fund with 2045 in its name. If your retirement date falls between two target date funds, you ll need to consider which fund is better suited for you based on your tolerance for risk. For example, let s assume you want to retire in 2047, and the available funds target 2045 and While both funds are following a similar and gradual glide path strategy, the 2045 fund will be five years ahead of the 2050 fund in terms of risk reduction. While either of the funds may be a suitable option for someone planning to retire in 2047, the 2045 fund would represent a slightly more conservative choice and the 2050 fund would represent a slightly less conservative choice. However, while target date funds offered by different investment companies may have similar names or target dates, they may not have the same investment mix. So, if you re choosing between different vendors, evaluate things like performance, glide path, expense ratios and fees before you make a choice. 11

14 My retirement goal: Build a vacation home in the mountains. No time to choose and manage your own investments? Leave it to the professionals and consider a target date fund. Do I need to change target date funds as I get closer to retirement? No. The target date fund s investment manager monitors the fund and makes needed adjustments over time. As long as the fund matches your target retirement date, you don t need to make any changes except to increase your contributions over time! What s a glide path? The glide path of a target date fund is the strategy the fund uses to determine its asset allocation mix, based on the number of years to the target retirement date. Typically, the investment mix becomes more conservative (includes more bonds and cash investments and fewer stocks) as the target date draws closer. Target date investment managers use different glide paths and have different percentages of stocks, bonds and cash when the fund reaches its target date Fund 2050 Fund 2045 Fund 2040 Fund 2035 Fund 2030 Fund Increasing allocation to bonds/decreasing allocation to stocks as target date nears 2025 Fund 2020 Fund Retirement Fund Stocks Bonds Not associated with any funds. 12

15 A Look at Target Date Funds at CTAinvest.org Watch the Video Is there anything else I need to do once I choose my target date fund? Investing in a target date fund is a great way to save for retirement, but it does not guarantee you will reach your retirement savings goal by your retirement date. Like any mutual fund, target date funds are not insured. The amount of money you accumulate will depend on how much you contribute and the performance of the fund over the years. While choosing a target date fund makes retirement investing easier, keep an eye on your fund from time to time to be sure it s delivering the returns you expect. What is a managed account? A managed account is another hands-off approach to investing that may be a plan option offered by some vendors. In a managed account, a professional investment advisor manages your plan investments for you. In addition to providing investment advice; they also monitor your investments and rebalance as necessary. There will be a fee for this service in addition to all other fees, and these additional management fees are typically 0.5% to 1.0% per year. You can visit 403bCompare.com to check on specific product fees or use the calculator How Will Fees Affect My 403(b) or 457 Plan Savings at CTAinvest.org. Ready to Enroll? If you ve already made up your mind to invest in target date funds and are ready to enroll in the CTA-Endorsed Retirement Savings Plan, jump ahead to page 18. If you prefer a more hands-on approach to investing your savings, keep reading. 13

16 Do It With Me Take control of your investments, but don t do it alone. This hands-on approach features example investment mixes to use for guidance the CTA Model Portfolios. Each Model Portfolio bases its investment mix from a set of core funds that can help you make informed investment decisions. Want the freedom to choose your own investments but the guidance of professional investment consultants? This approach gives you both. Each CTA Model Portfolio was designed by investment pros. Review the example portfolios on page 17 and see which ones best match your needs and goals. Then, choose your own investments through your 403(b) or 457 plan. If you want more choice and flexibility and you re willing to do your homework, this approach is for you. But it may be worthwhile to review the basics first jump to Things Every Investor Should Know on page 27. A Library of Resources at CTAinvest.org You ll find all the online resources you need at CTAinvest.org to get started with planning your retirement: videos, articles, calculators and worksheets. How do I get started? The first step is to ask yourself if you have the time, interest and knowledge to research the investment options, create your own portfolio and adjust it over time. If the answer is yes, you ll need to create a financial game plan that defines your investment strategy and retirement income goals. There s a handy checklist on pages to help you get started. You also need to do some homework to learn about investing and saving through a 403(b) or 457 plan. We ve also got you covered there at CTAinvest.org. It s a virtual library of resources with videos, articles, calculators and worksheets. These resources will help you learn the right questions to ask sales representatives, investment brokers and financial advisors before you set up your investments in a 403(b) or 457 plan. What s a model portfolio? Model portfolios are investment mix illustrations, examples developed by independent financial experts, showing how you may wish to invest your retirement savings. The CTA Model Portfolio examples are based on the idea that your years until retirement (your time horizon ) are the most important factor for determining your investment strategy. Other vendors model portfolios may be based on different objectives and some vendors offer model portfolios as investment options that use specific mutual funds and asset allocations from those plan funds. 14

17 Can I use the CTA Model Portfolios for guidance? Yes, the CTA Model Portfolios are available as examples to help you determine your investment mix. In addition to the Model Portfolios and Target Date Funds, the CTA-Endorsed Retirement Savings Plan also offers eight best-in-class investment options recommended by independent investment consultants called Core Funds (most 403(b) and 457 plans offer similar core investment options) for the do-it-yourself investor. CTA Core Funds One money market fund: Vanguard Federal Money Market Fund Two inflation protection funds: Vanguard Inflation-Protected Securities Fund and PIMCO Inflation Response Multi-Asset Fund Two bond funds: Vanguard Total Bond Market Index Fund and PIMCO Diversified Income Fund Three stock funds: Vanguard Extended Market Index Fund, Vanguard 500 Index Fund and Vanguard Total International Stock Index Fund You choose your own diversified investment mix from the Core Funds. You decide how much to invest in each fund. And you adjust your investment mix over time to keep your investments in balance with your original allocations. Go to CTAretirementplan.org for more information about your investment options, including Fund Detail pages and the annual fee disclosure statement for each fund. My retirement goal: Spend more time with friends and family. Take control of your investments with help from the experts. Check out the CTA Model Portfolios. 15

18 How do I choose a CTA Model Portfolio example that s right for me? Basically, you want to choose the model portfolio example that best lines up with your objectives and your years until retirement. A model portfolio made up primarily of stock mutual funds might deliver higher returns over time, but may also expose your investments to the short-term ups and downs of the stock market (volatility). When you have many years until retirement, you may be willing to accept that volatility in exchange for a better chance of higher long-term returns. Investing primarily in bonds or cash equivalents has historically produced less volatility, but also potentially lower returns. If you have a shorter investment time horizon, this may be a trade-off you are willing to make. Check out the CTA Model Portfolios on the next page to see which ones line up best with your goals. How do I use a CTA Model Portfolio? You ll use the CTA Model Portfolio to keep your actual portfolio on target. Here s how. 1. Monitor Your Own Portfolio. A portfolio is like a living thing; it changes from year to year, month to month, and even day to day. Over time, your account balances may shift based on the actual performance of your investments. For example, if the stock market increases dramatically, it could increase the percentage and value of your stock investments above the threshold you originally allocated to your portfolio. This shift could expose your portfolio to more volatility and a higher level of risk than you originally intended. It s important to keep tabs on how your investments are actually performing. 2. Rebalance Your Portfolio. Rebalancing your portfolio simply means returning your current investment mix to your original, targeted investment allocation percentages. If you re monitoring your investments, you ll see when these percentages stray. Just reset them so they match the CTA Model Portfolio you re using for guidance. Most investment professionals recommend reviewing a retirement portfolio once a year. Your 403(b) vendor or record keeper may be able to set up your account with automatic rebalancing, which makes this step effortless. 16

19 CTA Model Portfolios There are four CTA Model Portfolios. These portfolios assume you will be investing in mutual funds, based on the most common types of investment options available in the majority of 403(b) and 457 plans. These portfolios do not reflect the experience of any specific individual. When choosing a CTA Model Portfolio as a guide for choosing your own investments, consider your personal goals, timeline and risk tolerance. 28% 15% 43% Early Career for younger educators with a longer time frame until retirement (25+ years), the greatest portion of the Model Portfolio is in stocks. Heather 14% Mid-Career for educators who are in mid-career (10 to 25 years until retirement), the model portfolio suggests adding more bonds. 30% 5% 33% 21% 11% Victor Monica 40% 15% 23% 15% 7% Near Retirement for educators nearing retirement (in less than 10 years) the model portfolio has a higher allocation in bonds, but still includes a significant percentage in stocks. Retirement for educators in retirement, the Model Portfolio indicates investing primarily in bonds and cash, yet keeping a portion in stocks for growth potential that is intended to outpace inflation throughout retirement. 20% 15% 5% 5% 10% 45% Carlos Legend Capital Appreciation Large Company U.S. Stocks Small and Medium Size Company U.S. Stocks Non-U.S. Stocks Capital Preservation Inflation High-Quality Bonds Money Markets/Cash Inflation Linked Bonds 17

20 Enrolling in the CTA-Endorsed Retirement Savings Plan Is Easy Step 1 Enroll Online Log on to CTAretirementplan.org. Click on Are you a new user and follow the steps to create an account and enroll in the plan. The final Completed Succcessfully page at the end of the enrollment process provides a Transaction Recap of your investment choices. This page confirms that your registration and enrollment were completed successfully. By form Log on to CTAMemberBenefits.org/rsp to download the Enrollment Agreement. Follow the instructions on the form to complete and submit the form to the CTA Retirement Plan Center. Step 2 Submit a Salary Reduction Agreement (SRA) Whether you enroll online or use the Enrollment Agreement, you ll also need to obtain a salary deferral request form from your district s Third Party Administrator (TPA) to start payroll deductions. You may need to provide your account number, which you can find on the home page of the CTA Retirement Plan Center website after you enroll in the plan. You may also need to provide the 403(b) company or provider CTA Voluntary Retirement Plans for Educators (403bCompare ID#: 1926). How do I start payroll contributions or deferral elections? A Salary Reduction Agreement (SRA) must be completed with your district s Third Party Administrator (TPA). For help locating your district s SRA, visit CTAMemberBenefits.org/rsp. You may also change or stop contributions to other plans at this time. Note: You are not permitted to open a new 403(b) account after you retire. Need help? Call the CTA Retirement Plan Center toll-free at

21 Does Your District Offer the CTA Retirement Savings Plan? Before you can participate in the plan, the CTA Retirement Savings Plan must be added to your district s list of approved vendors. You can find out whether your district offers the CTA Retirement Savings Plan by checking the CTA Member Benefits website at CTAMemberBenefits.org, logging on to the CTA Retirement website at CTAretirementplan.org, or calling the CTA Retirement Plan Center toll-free at If your district does not offer the CTA Retirement Savings Plan, please contact the CTA Member Benefits Department at or business_initiatives@cta.org. 19

22 Already Saving and Ready to Switch to the CTA Plan? Does the CTA plan allow rollovers or exchanges if I want to consolidate my retirement savings accounts? Yes, you may be able to exchange in other 403(b) plans you currently have with your district or roll over in other types of defined contribution plans you have outside of your current district. There are two ways to do this. Option #1 Rollovers: You can make a direct rollover into the CTA plan from the following types of plans that are outside your current district s plan, such as from a previous employer: 401(k) plans 403(b) plans 457 plans Traditional IRAs This requires a cash distribution from your prior employer s plan which generally occurs after your employment ends with that employer. You must be currently employed and have an open CTA Retirement Savings Plan account to make a rollover into the plan. The process is relatively simple: After creating an account at CTAretirementplan.org, visit the forms section to request a rollover form. Next, complete the Rollover Authorization Form with your district s Third Party Administrator (TPA). Questions If you have any questions about rollovers, call the CTA Retirement Plan Center at

23 Please Note: Rollovers and exchanges of assets between vendors and between 403(b) plans must be permitted by the employer s Plan Document. An exchange is the movement of your money between vendors within your current district. Any exchanges or transfers completed that conflict with the IRS regulations can be treated as a taxable event. Option #2 Exchanges: You can make an exchange in from another 403(b) or 457 plan vendor or investment provider under your district s plan. This requires you to request an exchange out from the other vendor s plan. There may be surrender fees, loads or other fees that apply. You may want to consult with a tax professional or financial advisor when requesting an exchange. The process to do an exchange: After creating an account at CTAretirementplan.org, visit the forms section to request an exchange form. Next, complete the Exchange Authorization Form with your district s Third Party Administrator (TPA). Note If you have an annuity, it has to be surrendered if you switch to the CTA Plan. Surrender fees may apply when exchanging or rolling over from annuity products. For examples of surrender fees, refer to page 34. You may consider transferring assets when the surrender period has completely elapsed or fees have decreased to reasonable levels. When transferring from mutual fund accounts, consider any front-end loads (commissions) you may have already paid, and back-end loads or contingent deferred sales charges when funds are withdrawn. You may keep existing accounts, but stop or decrease contributions, and direct new contributions to the CTA Retirement Savings Plan. Questions? If you have any questions, call the CTA Retirement Plan Center at to obtain the necessary forms. 21

24 Resources to Help You Prepare for Tomorrow Everything s a lot easier with the right tools, including planning for retirement. Take advantage of these tools to help you get there. Online Resources CTA Retirement website at CTAretirementplan.org This is the place to enroll in the CTA Retirement Savings Plan, change your investment options and view your account balance. The site features in-depth information about the plan, including historical investment performance and Fund Detail pages for each of the investment options. You ll find articles about everything from investment basics to understanding fees, as well as tools and calculators that can help with making decisions about saving, managing and withdrawing your money. CTA Member Benefits website at CTAMemberBenefits.org You ll find the Enrollment Agreement form and an updated list of districts that offer the plan. CTAinvest.org The site features lots of tools and information to help with your retirement savings strategy. You ll find online articles, calculators, Frequently Asked Questions and a series of short videos on topics such as Social Security, 403(b) plans and choosing a financial advisor. My retirement goal: No worries about money. Planning for retirement is easier with the right tools. Take advantage of the resources at one of the CTA Retirement websites. 22

25 We re Here to Help By Phone If you have any questions about the CTA Retirement Savings Plan, please call the CTA Retirement Plan Center toll-free at , 8 a.m. to 6 p.m., Pacific Time, Monday through Friday. For other questions, call the CTA Member Benefits Department at At Onsite Meetings If your chapter is interested in hosting an enrollment meeting, please contact the CTA Member Benefits Department at

26 Put Your Plan in Action You ve picked an investment approach and you re ready to put it in place. Here are answers to a few questions you might still have. I already picked my 403(b) or 457 plan investments, but I want to take a new approach with my current 403(b) vendor. What do I do? Changing your investments with your current vendor is typically easy. You simply request (online or by phone) that your plan administrator shift assets from one fund to another and/or reallocate your future asset allocations to your newly selected funds. I enrolled in a 403(b)/457 plan, but I want to switch vendors. Can I? This is called an exchange. The first step is to check with your district s Third Party Administrator (TPA) to determine if this is permitted by your district. You will need to complete a new account form for your new 403(b) plan vendor, as well as a fund exchange form. You ll also need to specify which investment fund(s) at the new company should receive your exchanged transferred assets. Once you submit this paperwork, the two 403(b) companies (old and new) should work together to ensure a smooth transition of your funds. I signed up for an annuity but I no longer think it s right for me. Can I make a change? An annuity is an insurance contract. It contains stipulations made by the insurer as to the length of time you re to remain in the contract, and the financial consequences of making changes (or withdrawals) from your account. So, if you want to change your retirement plan assets from one insurance company to a new vendor, you will want to check the terms of your current insurance contract. If you are a current annuity investor and would like to get out of your annuity contract, make sure to find out if there are liquidity restrictions or surrender fees in effect. If there are liquidity restrictions, you may be able to stop contributing to the annuity and: 1. Surrender only the allowable amount each year until the liquidity restriction is eliminated, or 2. Leave the current balance in place and redirect future contributions to another investment. Whether or not you re assessed charges when making an investment change in an annuity will depend on the type of product you initially chose and when you purchased it for your account. For example, if you take money out of a variable annuity within a certain period after a purchase payment (typically within six to eight years, but sometimes for more than 10 years), the insurance company may assess a surrender fee, which is a type of sales charge that compensates the financial professional who initially sold the variable annuity to you. 24

27 If there are surrender fees, you may be able to: Stop contributing to the annuity and wait out the surrender period until it reaches 0% before surrendering the annuity. Redirect any new contributions to another investment. Cancel the contract and pay the surrender fees. Then you can transfer your balance to a new provider subject to the rules or provisions in your district s plan. Keep contributing to the annuity and cancel when the surrender period is up, provided the surrender period is based on the date of the contract and not on the premium payment dates. Get familiar with the rules and potential fees of making investment changes in your retirement account before doing so. In addition, exchanges and transfers have to be permitted as noted in the district s plan documents. Surrender Fees Explained Generally, the surrender fee is a percentage of the amount you sell or exchange, and it will decline gradually over a period of several years, known as the surrender period. For example, a 7% charge might apply in the first year after a purchase payment, 6% in the second year, 5% in the third year, and so on until the surrender fee no longer applies. Some variable annuity contracts will allow you to withdraw part of your account value each year, such as 10% or 15% of your account value, without paying a surrender fee. Refer to page 34 for impact of surrender fees on your balance. Where can I get more information? Visit CTAinvest.org. It s a virtual library of resources with videos, articles, calculators and worksheets. These resources will help you learn to ask the right questions of sales representatives, investment brokers and financial advisors before you set up your investments in a 403(b) or 457 plan. 25

28 Appendix: Things Every Investor Should Know Retirement Plan Comparison Chart Tax Advantages Investment Basics Know Your Financial Advisor Questions to Ask Your Financial Advisor Glossary of Fees 26

29 Things Every Investor Should Know If you re new to investing and not saving in a 403(b) or 457 plan, or you just need a quick refresher, read on. Plan Types 403(b) Plans A 403(b) plan is an employer-sponsored defined contribution retirement savings plan with tax advantages that are similar to a 401(k) plan, but 403(b) plans are available only to employees of public schools and other eligible tax-exempt organizations. To save in a 403(b), you need to complete and submit an enrollment form to your district. You decide how much to contribute each pay period on a before-tax basis (unless you contribute to a Roth account), up to IRS annual limits. You also decide how to invest your account by choosing from various mutual funds or annuities available through the vendors in your plan. The amount you accumulate for retirement will depend on how much you save, how long you participate in the plan, the performance of the investment funds you select and the fees charged by your plan and the investments within the plan. If you leave your job, you can roll over your balance to another employer-sponsored retirement plan as long as the new plan accepts rollovers or roll it into an Individual Retirement Account (IRA). You will find more detail about how a 403(b) program works in the plan s formal documents. Visit 403bcompare.com to find approved vendors in your district s plan. 457 Plans 457 plans are similar to 403(b) plans, but they are intended for state and government employees. The basic features of a 457 plan are the same as a 403(b) plan, but there are some differences: There are no distributions available while employed except in unforeseen emergencies. There is no 10% penalty for a distribution upon termination, as there is with a 403(b) plan. There is no requirement that the 457 plan be offered to all employees, as there is with a 403(b) plan. See the chart on the next page for a side-by-side comparison of these two types of plans. Can I contribute to both a 403(b) and 457 plan? If you are eligible and have access to a 403(b) and a 457 plan and have enough includable compensation, you can contribute the maximum amount to each of the plans. For 2016, the annual limit is $18,000 to a 403(b) and $18,000 to a 457, for a total of $36,000. You can save even more if you are eligible for the age 50 or other catch-up provisions. To learn more about 403(b) and 457 plans, visit CTAinvest.org. 27

30 Retirement Plan Comparison Chart Who is eligible? 401(k) (for comparison only) Employees whose employers offer the plan (private employers, some nonprofit employers) 403(b) Employees of nonprofits such as public schools and some hospitals, charitable organizations Before-tax contributions? Yes Yes Limits on employee contributions (2016) Up to $18,000 Up to $18,000 Age 50+ catch-up contributions $6,000 $6,000 Other catch-up No Yes 15-year rule 1 Distributions while still employed (in-service distributions) Only on hardship if under age 59½ Only on hardship if under age 59½ Distributions without tax penalties Retirement after age 55 Death or disability Payments after age 59½ Lifetime annuity or installments Rollover to other qualified plan or IRA Distributions with penalties 10% prior to age 59½, except as above Retirement after age 55 Death or disability Payments after age 59½ Lifetime annuity or installments Rollover to other qualified plan or IRA 10% prior to age 59½, except as above Required minimum distributions April 1 following the year participant reaches age 70½ April 1 following the year participant reaches age 70½ Tax treatment of distributions Ordinary income tax Ordinary income tax Loans Yes, if plan permits Yes, if plan permits Rollovers allowed to other plans 4 Yes to 401(k), 403(b) or 457 plan Yes to IRA Yes to 401(k), 403(b) or 457 plan Yes to IRA 1 Eligible employees with 15 or more years of full-time service may be able to contribute up to $3,000 more for five years, or a maximum of $15, May be eligible to defer up to two times the contribution limit in effect for the final three years of service. Employees cannot participate in the 3-year catch-up and the 457 plan age 50+ catch-up during the same tax year. 3 Ordinary income taxes may be due if not a qualified distribution, generally after age 59½ and have held account at least five years. 4 Rollover may be subject to restrictions by vendor and the school district plan sponsor. 28

31 457 Roth 403(b) Roth 457 State and local government employees Employees of nonprofits such as public schools and some hospitals, charitable organizations State and local government employees Yes No No Up to $18,000 Up to $18,000 Up to $18,000 $6,000 $6,000 $6,000 Yes final 3-year provision 2 Yes 15-year rule 1 Yes final 3-year provision 2 Only on account of unforeseeable emergency Termination of employment at any age Death or disability Unforeseeable emergency Rollovers Only on hardship if under age 59½ Age 59½ and have held account at least five years Death or disability Other provisions same as 403(b) Only on account of unforeseeable emergency Termination of employment at any age 3 Unforeseeable emergency 3 Death or disability Rollover to another designated Roth account or Roth IRA None while employed. No 10% penalty upon termination. Same as 403(b) None April 1 following the year participant reaches age 70½ Same as 403(b) Same as 457 Ordinary income tax Tax-free if qualified distributions Tax-free if qualified distributions Yes, if plan permits Yes, if plan permits Yes, if plan permits Yes to 401(k), 403(b) or 457 plan Yes to IRA To another designated Roth account, but only by direct rollover To another designated Roth account, but only by direct rollover 29

32 Tax Advantages Traditional Option With a traditional 403(b) or 457 retirement plan, your contributions are made before taxes are withheld, so you save on your current tax bill. Contributions and earnings grow tax-deferred, and withdrawals at retirement are taxed at ordinary income tax rates.* Roth Option 403(b) and 457 plans sometimes offer a Roth option. Contributions to a Roth 403(b) or 457 are made on an after-tax basis. That means there is no current tax break; however, all contributions and earnings can be withdrawn tax-free at retirement if certain conditions are met.** If your district offers a Roth option, you need to decide whether to choose the traditional 403(b) or 457 plan with upfront tax savings, or a Roth 403(b) or 457, which offers tax-free distributions when you retire. So Which Is Better? That will depend on your current and anticipated financial situations. If you expect your tax bracket to be lower in retirement, it may make sense to contribute to a traditional 403(b) or 457 plan and take advantage of the tax break now. However, if you expect your tax bracket to be the same or higher in retirement, it may make sense to contribute to a Roth 403(b) or 457 and benefit from tax-free withdrawals later. A financial or tax advisor can help you review the options to see which makes more sense for you. * Withdrawals made from a 403(b) prior to age 59½ (age 55 if leaving your job) may be subject to a 10% federal tax penalty (penalty doesn t apply to 457 plans). ** Withdrawals from a Roth 403(b) or 457 plan are tax-free if the account has been held at least five years and the account holder is at least age 59½. Nonqualified withdrawals are subject to ordinary income tax rates and a 10% federal tax penalty (penalty doesn t apply to Roth 457 plans). 30

33 Investment Basics Time Horizon This is the amount of time you have before you retire or plan to use the money in your account. Generally, if you have a lot of time before you retire, you can tolerate more risk than those who are saving for the short term. Investment Risk When it comes to investing, risk is the chance of losses relative to your chance for gains. To grow your investment, you must be willing to take on some amount of risk, so it s important to understand two kinds of risk: market risk and inflation risk. Market risk refers to the value of your investments going up or down over time. Generally, the more money an investment can potentially make for you, the more it also is subject to loss at any given time. And lower-risk investments tend to have lower potential for return. Inflation risk refers to the likelihood your investments won t keep up with inflation over the long term. Inflation eats away the buying power of your paycheck and investments. You ll need to stay ahead of the rate of inflation over time just to break even. So, if inflation averages 4% each year, you need an annual investment return over 4% just to beat inflation. Diversification Don t put all your eggs in one basket is the main idea behind diversification. It simply means you distribute your money among several different investments to spread out your risk. That way, if one of your investments decreases in value, your other investments may be increasing. Diversification can minimize risk, even if you re investing in several higher-risk funds. One way to diversify is by investing in mutual funds. Compounding Compounding simply means that when your original investment earns money (in the form of interest and dividends), the money earned can earn money too. Basically, your earnings are added to your original investment and the total size of your investment grows. For an example, turn to page 4. Dollar Cost Averaging Dollar cost averaging is the practice of investing your money a little at a time. By spreading your purchases evenly over a period of time, you acquire more shares when the cost per share is down and fewer shares when the cost is up. This reduces the risk of buying all your shares at the higher price and selling all of them at the lowest price. Your 403(b) or 457 plan contributions are a percentage of your earnings that is deducted in equal amounts from each paycheck. And that means you are automatically practicing dollar cost averaging! 31

34 Investment Types Stocks A stock represents ownership of a company. Historically, stocks have provided the highest long-term return, but they have lots of ups and downs in the short term. Bonds When you invest in bonds, you are basically lending money to an entity (typically a company or government) for a defined period of time at a variable or fixed interest rate. Historically, bonds have provided a lower return than stocks, but typically haven t been quite as volatile. Money Market Instruments Money markets are interest-bearing accounts that typically pay a higher interest rate than a savings account. Historically, money markets have been the most stable type of investment, but they are also expected to provide the lowest long-term return. Mutual Funds A mutual fund is a collection of stocks, bonds and/or money market instruments purchased by a professional fund manager with money pooled from individual investors. Mutual funds provide the opportunity to directly invest in a wide variety of investment types allowing the investors to boost their buying power. The combined holdings of a mutual fund are called a portfolio. Mutual funds may invest in a wide variety of stocks and bonds, which helps to manage investment risk. To help you make informed decisions when choosing the mutual funds for your 403(b) or 457 plan, review each mutual fund s disclosure document (prospectus). Also identify any fees, sales charges and the expense ratio of the fund before investing. 403(b)(7) or 457 mutual funds are investments made directly to mutual funds through a custodial account offered by insurance company vendors, banks or mutual fund companies (e.g., Vanguard, Fidelity) that can be sold by brokers, independent agents, insurance agents or offered as direct investment options. This type of mutual fund does not require an insurance contract or insurance fees fees will be paid to the mutual fund company, custodian and record keeper. 32

35 Passively Managed and Actively Managed Funds Passively managed mutual funds hold securities that are bought and sold only in response to changes in an index. Index funds are mutual funds that seek to duplicate the performance of a particular benchmark index, such as the S&P 500 (there are hundreds of various indexes that measure different segments of the market). The fund may hold all of the same securities that are in the index in the same proportion, or it may include a statistical sampling of the securities in the index. With actively managed funds, the fund manager buys and sells securities in an attempt to outperform the market rather than match a particular index. Many investment funds are available in both actively and passively managed forms. For example, there are large-cap index funds that seek to track the performance of a corresponding large-cap index, and there are large-cap funds that are actively managed and seek to outperform the index by buying and selling large-cap companies based on research and analysis. In general, actively managed investments and annuities charge higher fees than passively managed investments, such as index funds. Since fees have such a large impact on your return, it is important to compare both historical performance rates (but keep in mind that past performance is not an indication of future results) and the investment fees. Go to 403bcompare.com to review the explicit fees charged by the investments available in your plan. Annuities An annuity is a financial contract with an insurance company that offers tax-deferred growth until withdrawal. There are two primary types of annuities: fixed and variable. Fixed annuities offer a guaranteed rate of return for a specific term. The rate is guaranteed by the insurance company. A guaranteed return sounds good, but the reality is that fixed annuities may pay a rate of return that is so low it doesn t keep pace with inflation. Since you already have a guaranteed benefit with your CalSTRS or CalPERS pension, it may not make sense to sacrifice long-term earnings potential for the low return of a fixed annuity. A variant to a fixed annuity is an equity-indexed annuity. These types of annuities are so complex that the Financial Industry Regulatory Authority (FINRA) has issued an investor alert about them. Variable annuities, unlike fixed annuities, do not pay a guaranteed return. Instead, they pay a return that varies with the performance of the subaccounts you choose. Subaccounts are basically mutual funds held by the insurance company. So you end up paying the usual fees for mutual funds, plus additional fees charged by the insurance company. And surrender fees can keep you locked into a poor investment for years to come. 33

36 The Promise and Pitfalls of Annuities and Fees While annuities can offer a guaranteed rate of return, they often charge hefty fees, including surrender fees that penalize you if you want to cancel the contract within a certain period of time. The fees are not transparent it can take a good deal of digging to discover what they are. And the surrender fees restrict liquidity the ability to transfer or sell assets, so if you choose an annuity but then change your mind, you may pay a hefty price. Impact of Surrender Fees The following shows the impact of surrender fees in various years on a hypothetical annuity balance. The chart assumes the following: a fixed annuity of $50,000 with a surrender charge of 6% the first year, declining by 1% per year until it reaches 0%; the annuity earns an average annual return of 5%.* Balance at End of Year Surrender Fee Total Fee Year 1 $50,000 6% $3,000 Year 2 $52,500 5% $2,625 Year 3 $55,125 4% $2,205 Year 4 $57,881 3% $1,736 Year 5 $60,775 2% $1,216 Year 6 $63,814 1% $638 Year 7 $67,005 0% *Annual rate of return is for illustration only and does not represent the return of any specific investment. Watch the Video The Truth about Variable Annuities and A Look at Fixed Annuities at CTAinvest.org to learn more. 34

37 How Fees Reduce Earnings The chart below shows how various expense ratios reduce the ending balance of a portfolio. It assumes that you invest $200 a month for 20 years and earn an annual average return of 6%.* Value of Investment Averaging 6% Annual Gross Return, Minus Fees $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 0%.5%.75% 1% 1.5% 2% 2.5% 3% Annual Fees In general, actively managed investments and annuities charge higher fees than passively managed investments, such as index funds. Since fees have such a large impact on your return, it is important to compare both historical performance rates (but keep in mind that past performance is not an indication of future results) and the investment fees. Go to 403bcompare.com to review the explicit fees charged by the investments available in your plan. * Rate of return is for illustration only and is not meant to represent the return of any specific investment. Account value shows value after 20 years of a $200 monthly investment earning an average annual rate of 6%, minus the deduction of various annual fees. 35

38 Know Your Financial Advisor One of the challenges in choosing a good financial advisor is that there is no single title or designation that covers every area of training or duties you ll find titles such as financial analyst, financial advisor, financial consultant, financial planner, investment consultant and fiduciary. Why Choose a Fiduciary? Fiduciaries are ethically and legally obligated to act in your best interests at all times. A fiduciary is the highest standard of care recognized by law and is expected to be above reproach in carrying out their duties. Fiduciary-recommended investments should be the best choice for your particular circumstances, with no regard for his or her personal financial gain. You can find a comprehensive list of financial advisors at the Financial Industry Regulatory Authority (FINRA) website at finra.org. Search for selecting investment professionals. How Did You Select Your Current 403(b) Investment? Do you know if the advisor received hourly fees, flat fees, commission-based fees or a percentage of your assets or is your advisor a fiduciary? Ask questions: If you are paid hourly, what is the hourly fee and what is the typical amount of time you spend working with a client? If you are paid by a flat fee, what is that fee and what does it include? If you receive commissions, either solely or in addition to other fees, on what products are commissions paid to you? If you are paid by percentage of assets, what is the percentage and how often is it charged? Do you receive any other considerations from the vendor for the products I purchase, such as in-kind compensation or gifts? There are instances when an advisor, insurance agent or financial planner may try to sell you an investment that is not in your best interests. Always ask how the person recommending the investment will be paid and get it in writing to help ensure you are not being sold an investment simply because it will result in the highest commission or greatest benefit to the person selling it. Regardless of who gives you advice, you must understand why a particular investment is being recommended, why it is appropriate for you and what fees are involved. For more questions to help you choose the right financial advisor, see page 38 of this guide. A more comprehensive set of questions and guidance for choosing a financial advisor is available at CTAinvest.org. 36

39 Resources to Locate a Financial Advisor National Association of Personal Financial Advisors at napfa.org. This site can help you find fee-only financial planners in your area. Members of NAPFA are required by the organization to sign a fiduciary oath. The Securities and Exchange Commission website offers a link where you can search for investment advisors at FINRA BrokerCheck allows you to check the backgrounds of FINRA registered brokers at Note: Websites are provided for information only. No endorsement is implied. 37