By Steve Seals
Navigating the array of benefits offered by the University of Kentucky can seem overwhelming. With the number of financial options in our country, along with the University’s continual efforts to adapt, there are now so many options available that it can get confusing. There are new account type options being offered, different accounts with different tax structures, and even options to specifically fund future medical bills.
Let’s delve into some of the benefits the University of Kentucky offers so you have more clarity on how they work and if they’re a fit for you. Here are three options to consider.
Expand Your Investment Choices With Brokerage Link
Recently, the University of Kentucky has made significant modifications to its investment strategy, leading to a marked reduction in available investment choices. For many employees, this move meant fewer options to navigate and optimize. However, there is some good news: The University now permits the opening of something called a brokerage link account within Fidelity. A brokerage link account allows participants in retirement plans to invest in a wider range of assets beyond the standard options provided by their plan. By adding this option, employees can access several thousand more investment options, breaking free from the prior limited options.
The advantage? You can potentially find lower-cost funds, more diversified funds, or funds with the potential for higher growth over time. By optimizing among these choices, there’s an opportunity to add substantial value—possibly thousands or even hundreds of thousands—to your retirement account by the time you decide to hang up your boots.
And if this sounds daunting to evaluate on your own, worry not. Our dedicated team is here to assist in opening a brokerage link account and guide you in selecting the best investment avenues tailored to your financial goals.
The Roth 403(b): A Post-Tax Advantage for Your Retirement
Another attractive option is something called a Roth 403(b)—a powerful tool that allows for post-tax contributions. But why should you consider allocating some of your contributions post-tax? Because then you would have an account that would be free from any taxes in retirement (so long as you follow all the applicable rules).
This means that in retirement, a larger chunk of money goes directly to you rather than Uncle Sam. If you put all your contributions into pre-tax accounts, you will owe taxes on any distribution you make in retirement. For some retirees, they’d rather not have that extra tax liability in retirement.
The Health Savings Account (HSA): An Investment for Your Health and Future
We all know that as we get older, we’re going to have issues with our health, and we’ll need to be able to pay for it. A health savings account (HSA) is a prime tool that offers a triple tax advantage to address this concern.
First, contributions are tax-deductible, reducing your taxable income in the current year. Then, as these funds potentially grow over time, those earnings are tax-free. Finally, when drawn for qualified medical expenses in retirement, the distributions remain tax-free.
Essentially, it’s a specialized nest egg for your healthcare costs in the future. Given these wonderful tax advantages, as well as the ability to spend this money on supplemental health insurance policies or long-term care costs, an HSA stands out as something everyone should consider in their financial plan.
Unlock the Full Potential of Your University of Kentucky Benefits
Are you fully leveraging your University of Kentucky benefits? As you navigate this comprehensive package, you might encounter opportunities yet to be seized or have questions that remain unanswered. Do you feel confident about your financial goals in the context of these benefits?
At Seals Financial Planning and Investments, we are dedicated to helping you make the most of what the University offers. The financial landscape of benefits can be intricate, but with knowledgeable guidance, you can chart a clear path. Contact us for a complimentary consultation at (859) 230-3476. Together, let’s turn your benefits into a robust foundation for your financial future.
About Richard Stephen (Steve) Seals
Steve Seals is owner and independent Registered Investment Advisor Representative at Seals Financial Planning & Investments VI, LLC, a financial planning services firm based in Lexington, KY. As an independent Registered Investment Advisor Representative with about two decades of experience in the investment and insurance industries, Steve’s firm is founded on getting to know each client personally, allowing him to provide sound financial advice throughout their career and into retirement. With the mission of guiding clients on the path of success, Steve is fueled by his commitment to excellence and goes the extra mile to make sure clients are fully satisfied. He believes in maintaining a positive mindset, creating partnerships with a purpose, and always striving for significant outcomes.
Born in Jenkins, Kentucky, Steve grew up with a love for basketball and serving his community. After high school, he served nine years in the United States Marine Corps, then earned a bachelor’s degree in accounting. He was eventually able to put his degree and desire to help others to work as a fiduciary financial planner. Prior to founding his own firm in 2014, Steve learned from working with Edward Jones, US Bank, University of Kentucky Federal Credit Union, and CUSO Financial. He also received his Security Series 63 and 65/66 through Keystone Financial Group, LLC, and holds various life, health, and variable insurance licenses.
Steve and his wife, Angie, have three daughters (Lauren, Peyton, and Ashton) and two grandsons (Kenyon and Kai). Steve holds a private pilot’s license, and the family enjoys sports, spending time at the lake, and traveling. To learn more about Steve, connect with him on LinkedIn.
