The Big Picture

We have been providing educational meetings to University faculty and staff recently. (Next one is October 12th @ 3pm WSTC 238C. Be there!) The focus of the meeting is to give a brief overview of the University retirement plan changes. It is a small part of the presentation because our site www.Plan4NU.com gives more detail, as well as, the information provided by the University, Fidelity, and TIAA. However, questions are encouraged!

The bigger part of the presentation is “The Big Picture”. By that we mean your retirement plan is just part of your overall balance sheet. More than likely, it will grow over time to be the biggest asset that you have. So, we start with an explanation of what a new worth statement is. Simply it is:

Assets minus Liabilities = Net Worth

What you own What you owe = Net Worth

It isn't a difficult exercise for an employee to calculate what their net worth is. The real key is to do it on a consistent basis which is typically once a year. The value is that you will hopefully see your net worth increase over time. Your retirement plan will grow by market appreciation and your payroll contributions. Other assets that you may have will be your home, cars, rental or recreation property, savings, college savings plans, etc.. The real focus is the liabilities side and managing your debt obligations. We want our net worth to increase over time as the liabilities (mortgages, car loans, student loans, credit cards, etc..) decrease (hopefully).

With these impending changes with your University retirement plan, this is a great opportunity to calculate your net worth. Is your 401(a) account the largest asset that you have? Just like home maintenance, you need to think about what maintenance needs to be done to increase your net worth. Should you make larger contributions to grow your assets or should that additional cash be used to pay down debt. The answer can be simpler if you do that annual net worth calculation to see how your accounts are changing. Give it a try