‘I have signed her up for a workshop about her retirement plans/pension with the school district’: Helping mom prepare for retirement. How can I ensure she maximizes her savings and investments?

Hi Money Minder,

My mom is getting close to retiring from her school district job in about 4-5 years. She’s been putting $300 a month into a 403B plan for the past 7 years, but it hasn’t been performing well. It’s a 10-year annuity plan through National Life Group, and I’m not sure if she can just put $5 a month for the next three years to complete it?

I told her to check out a 401k instead of the 403B for her contributions.

I already signed her up for a workshop on retirement plans and her pension with the Florida Retirement System. She has a list of questions ready to go.

Once that’s done, I want to find her a financial advisor. They have assets like a house, a trust, a couple of cars, and two life insurance policies. Do you know any good companies that offer a one-time fee for an annual financial check-up? They bank with Chase currently.

Farewell, Money Minder!

Response from THE MONEY MINDER:

Hello There,

While it’s commendable that you’re looking out for your mom’s financial well-being, it’s essential to tackle the issue of her underperforming 403B with a practical approach. It’s concerning that the plan has not yielded satisfactory results despite her regular contributions over the past 7 years. The suggestion of continuing minimal contributions for the next 3 years to reach the 10-year mark before ceasing further contributions may seem like a viable strategy to maximise returns from the annuity plan. However, it’s crucial to evaluate whether the additional $5 a month would significantly impact the overall outcome of the plan’s performance.

In the interim, transitioning to a 401k plan is a wise move, as it may offer better investment options and potential for higher returns compared to the existing 403B. Given that she has a pending retirement with the school district, exploring the Florida retirement system thoroughly through the upcoming workshop is a step in the right direction. This will provide valuable insights and clarity on her pension benefits, enabling her to make informed decisions about her retirement planning.

Regarding the idea of engaging a financial advisor post-workshop, it’s essential to find a reputable company that aligns with her financial goals. While there are numerous financial advisory firms that charge a one-time fee for annual consultations, it’s advisable to research and compare different options to find the best fit. Since your mom banks with Chase, she may want to explore their financial advisory services or seek recommendations from the workshop or trusted sources for reputable firms.

In conclusion, helping your mom navigate her retirement planning and financial decisions is commendable, and your proactive approach to seeking advice and support is crucial. By exploring alternative investment options like a 401k, attending the retirement workshop, and identifying a suitable financial advisor, she can secure a more stable financial future. If you have any further questions or need assistance in the future, feel free to reach out for guidance.

Farewell from THE MONEY MINDER.