Investing Your Withdrawals

When you withdraw your benefits, you are responsible for investing the money you receive. The Board of Trustees cannot provide you with financial advice, but suggests that you consider the following points:

  • Educate yourself about investments. You have been offered investment education opportunities as a Plan participant. More information is available in books and newspapers, formal and informal classes, and on the Internet. You also could hire a financial professional (broker, financial planner, etc.) to give you individualized investment advice.
  • Investigate investment options. Remember that you have many investment options. For example, you can purchase individual stocks or bonds, or you can buy some of the hundreds of mutual funds or ETFs available. You can make investment decisions yourself, or rely on a financial professional. Study the options available to you, and beware of high pressure salespeople peddling specific investment products.
  • IRA investment options. If you decide to roll your distribution into an Individual Retirement Account (IRA), you may choose between IRAs with only a few investment options, IRAs with funds representing several risk/return characteristics, and IRAs that allow you to invest in any combination of mutual funds, stocks, or bonds. When selecting an IRA, consider whether it offers the right mix of investments to meet your needs.
  • Evaluate investment fees. It is easy to overpay for financial advice or services if you do not understand the fees. Ask about brokerage commissions and mutual fund loads and 12B-l fees (different kinds of sales charges on some mutual funds). Before buying a mutual fund, determine the fund’s expense ratio B, a standardized number that shows the management fee, administrative outlays, 12B-l fees and other costs on a per share basis. The financial institution offering an IRA can provide a prospectus detailing the sales fees for investment transactions and expenses for continued investments. Financial professionals who advise you about investments also charge fees. Some financial professionals charge an hourly rate or a project-based fee for helping you establish a financial plan. Others are paid through commissions from your investments. Many financial professionals are primarily interested in selling financial products. Before hiring any financial professional, be sure you understand how he or she is compensated.
  • Financial professionals are not all created equal. Before you commit to investing with a particular professional, find out his or her credentials. How long has he or she been providing financial advice? Are they a CFP (Certified Financial Planner), CFA (Certified Financial Analyst), CIMA (Certified Investment Management Analyst), or CPA (Certified Public Accountant)? Do you like and trust the prospective financial professional? A financial professional will have access to highly confidential information and will influence the direction of your financial future. Find someone whose goal is to help you identify your financial objectives and make appropriate investment decisions, not sell you a specific product. Check references before making a commitment.