Lunch and Learn: Postdoctoral Finances & Money Management

Date: February 16, 2016

Invited Speakers:

  • Ann House, Coordinator of the Personal Money Management Center
  • Amy Tolman, Benefits Team, Human Resources University of Utah
  • Greg Finch, TIAA-CREF Representative
  • Teotihuacan (Teo) Ngatuvai, Fidelity Representative

Summary:

We had a lively panel discussion about postdoctoral finances. Although the conversation centered on retirement plans, the panelists highlighted the importance of saving money for short-term goals (e.g., buying a house) as well as long-term goals (e.g., retirement). The panelists also discussed several resources available to help individual postdocs evaluate their personal financial situation.

Highlights from the discussion are provided below:

  1. Finances can be complicated due to the fact that there is a lot of specific terminology that may be hard to understand. Some key terms are defined below.
  • Matching: The term matching contribution refers to a matching dollar amount contributed by an employer to the retirement savings account of an employee.  For your company matches up to $5,000.  If you invest $5,000 in your retirement account, the company will add an additional $5,000 so that the total contribution is $10,000. The University of Utah does not offer matching. However, this can be an important benefit to consider when evaluating job offers.
  • Vested: You may need to stay with the company for a certain number of years to take the entire matching contributions. To find out your vesting schedule, check with your company’s benefits office.
  • TaxDeferred vs. After Tax: When investing money, you often get a choice regarding whether you pay taxes on your investment at the time you invest (after tax) or at the time you withdraw the investment (tax-deferred). You should consult a financial advisor or tax accountant regarding the pros and cons of each approach.
  • 401(a), 403(b), 457(b), IRA, Roth IRA: These are different types of retirement accounts. It is important to understand the rules and regulations regarding the type of account you choose.
  • Stocks, Bonds, Mutual Funds, ETF: These are different types of asset classes. Different types of accounts will allow you to invest in different combinations of asset classes. A financial advisor can help you understand the pros and cons of each asset class.
  • Benefits: Benefits packages can include a wide variety of items, such as health insurance plans, retirement plans, maternity leave, life insurance, disability insurance, legal services, home and auto insurance, tuition reduction, etc. When evaluating job offers it is important to not only understand your salary, but also the benefits package that accompanies that salary. University of Utah’s benefits are summarized on the HR website: https://www.hr.utah.edu/benefits/index.php Note that not all University employees are eligible for all listed benefits.
  1. Postdocs can learn about their eligibility for retirement benefits on the University of Utah Benefits Eligibility Chart. On this chart, postdocs are split into three different job codes. If you do not know your job code you can look at the “job title” on your paycheck or ask HR. Retirement eligibility is complicated due to the fact that postdocs are defined using a variety of job codes. Additionally, rules and regulations vary based on citizenship, funding status (i.e., what grants or fellowships you are paid from) and where on campus you work. Amy Tolman has offered to help postdocs clarify their retirement eligibility based on personal circumstances. You can find her contact information in the University of Utah directory or on the HR website.
  1. Retirement eligibility through the University of Utah can qualify you for three types of retirement plans: “University-funded” 401(a), “Employee-funded” 403(b) and/or “Employee-funded” 457(b). In “University-funded” accounts, the University of Utah puts money in a retirement account on your behalf. In “Employee-funded” accounts, you put money in a retirement account. Information for these plans can be found through the HR website:

https://www.hr.utah.edu/benefits/retire_401aPlan.php

https://www.hr.utah.edu/benefits/retire_403b.php

https://www.hr.utah.edu/benefits/retire_457b.php

  1. Regardless of whether you qualify for retirement benefits through the University of Utah, there are ways to save money for retirement. For example, you could invest through an Individual Retirement (IRA) account. Representatives from TIAA-CREF and Fidelity are available to you to discuss these options.  Information on IRA accounts can be found on the TIAA-CREF and Fidelity websites:

https://www.fidelity.com/retirement-planning/learn-about-iras/what-is-an-ira

https://www.tiaa.org/public/offer/products/iras

  1. Fidelity and TIAA-CREF are the financial firms that work with the University of Utah. They each offer a variety of services including management of retirement accounts, investment advice, and financial planning. Though the University of Utah Department of Human Resources Benefits webpage you can find contact information these companies. You can set appointments with representatives of both companies to discuss your personal situation.

The Personal Money Management Center provides education and counseling on matters of personal finance. They are a great resource if you have questions regarding budgeting, building a good credit scores, saving and investing, paying student loans, or evaluating job offers and employer benefits packages. Postdocs are welcome to reach out to the Personal Money Management Center and are encouraged to attend the numerous events they host on campus.