Educators work too hard to make financial mistakes that are easily avoided. Start by making yourself aware of four common money mistakes. Then evaluate your finances, form a plan for success, and see how your member benefits can help you get on the path to financial security.
Mistake #1: Not having enough (or any!) life insurance. Insurance is the safety net that helps protect all of your hard work so that you can continue to provide for your family if something should happen to you.
NEA Members Insurance Trust offers a wide range of life insurance solutions to NEA members, issued by The Prudential Insurance Company of America:
▪ NEA Complimentary Life Insurance is provided at no cost to you. Coverage includes $1,000 of term life coverage, up to $5,000 of accidental death and dismemberment coverage, up to $50,000 of AD&D coverage for covered accidents on the job, and up to $150,000 in life insurance if you are the victim of unlawful homicide on the job. Remember to name a beneficiary for your policy.
▪ The NEA Group Term Life Insurance Plan is supplemental insurance to help your loved ones cover financial obligations such as a mortgage, college costs, an auto loan, and more. Get flexible life insurance coverage amounts ranging from $25,000 to $500,000 (in $25,000 increments) at affordable rates, thanks to the power of NEA’s 3 million members.
▪ The NEA Level Premium Group Term Life Insurance Plan offers affordable rates that you can lock in over the length of the loan term. You also can get coverage amounts ranging from $25,000 to $1 million.
▪ The NEA Guaranteed Issue Life Insurance Plan can help your loved ones cover your final expenses such as funeral and burial costs. No medical exam is required, and you can get coverage of either $10,000 or $20,000.
Mistake #2: Not starting to save early enough for retirement. It’s never too early to start saving for retirement. The earlier you start, the more time you’ll have to save, and the more money you might be able to stash away for your future.
Let’s say you save $4,000 each year, with a 6 percent return compounded annually, until you turn 62. If you start saving at age 22, your investments could yield up to about $650,000. But if you wait until you are 32 to start saving, your investments could yield up to only about $335,000.
NEA Member Benefits provides several tools tailored for NEA members to help you see where you stand.
▪ Take the five-minute retirement checkup to figure out if you’re on track.
▪ Check out the comprehensive retirement income calculator, which includes state pension data, to see what your retirement might look like.
▪ Download your free copy of An Educator’s Guide to Retirement Planning to get an overview of state pension plans, Social Security and the various considerations unique to educators. There is also a two-page checklist to help you assess your situation
Mistake #3: Not having an emergency fund. It’s important to plan ahead for unexpected situations — such as a medical emergency or job loss — so you won’t be caught off guard.
Experts recommend that you aim to set aside at least three to six months of living expenses to cover necessities such as the mortgage or rent, utility bills, phone, internet, prescriptions and more.
Through the NEA Smart Money Account, you can easily link your checking or savings to a federally insured account to potentially earn a higher return. Your money is easily accessible when you need to use it.
Mistake #4: Not planning for life after you are gone. Expressing your wishes through legally binding estate documents is an important way to help protect your loved ones and assets.
To get started, make sure to consult with a financial professional to draft an authenticated will, as well as trust and estate planning.
In addition, be sure to name beneficiaries for your insurance coverage and retirement accounts. Include their names, Social Security numbers, and the allotment you’re leaving to them. Remember to update your beneficiaries and allotments as your life changes, as needed.
To find the resources referenced in this article, please visit neamb.com/life-insurance-protection/avoid-these-five-money-mistakes.
This article is provided courtesy of NEA Member Benefits. It may contain marketing language, on products issued by The Prudential Insurance Company of America, that has not yet been approved in all states.
AD&D coverage provides accident insurance only. It does not provide basic hospital, basic medical or major medical insurance as defined by the New York State Department of Financial Services.
IMPORTANT NOTICE — THIS POLICY DOES NOT PROVIDE COVERAGE FOR SICKNESS.
NEA Life Insurance coverages are issued by The Prudential Insurance Company of America, Newark, New Jersey. The Booklet-Certificate contains all details, including any exclusions, limitations and restrictions, which may apply. CA COA #1179. NAIC #68241. Contract Series: 83500 and 31300. 1049944-00001-00
