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Choosing Your Investments
So you've decided to participate in the SUNY Optional Retirement Program (ORP) and/or the SUNY 403(b) Savings Program. Congratulations on making this important decision - but what happens next? There are three main steps you should take when enrolling in either or both plans (within established timeframes):
Step 1: Research
Research Your Investment Choices. Learn the basics about investments and your options, so you can make informed decisions, and be better prepared to discuss your options with an investment representative. You have the ability to choose all of your investments on your own, select a Target Date Fund (TDF) for a generally balanced allocation based on anticipated retirement date, and/or pay a fee to enroll in a managed account for a personally customized investment allocation that is re-evaluated and re-balanced as needed over time (based on factors that change over time, such as career stage and life events). See the SUNY Retirement Program Investment Services flyer for introductory information about these three investment strategies.
Step 2: Plan
Meet with the representative(s) from the SUNY plan investment provider(s) of interest to discuss your investment options (given your current career stage), and learn about any tools the provider(s) may have to assist in the decision-making process. As a SUNY plan enrollee, you have access to FREE financial planning & investment guidance services. Find contact info for the representatives assigned to your campus here: Corebridge (formerly AIG), Fidelity, TIAA, and Voya.
Step 3: Complete
Complete the Enrollment Process after choosing your investments for the applicable plan(s). Enrollment instructions for both the SUNY ORP and the SUNY 403(b) plans are available online.
The below information will help you with Step 1: Research Your Investment Choices.
When choosing investments for your retirement accounts, it's important to research your investment choices with the goal to get the most for your money, as you might when making any purchase. The goal is to be "retirement ready" when the time comes for you to retire, and the financial choices you make between now and your retirement will effect just how "retirement ready" you are when that time comes. Below is information to help you make more educated decisions when allocating your investments, with a focus on three points for consideration: performance, cost, and balance - and then monitoring your choices.
Pay attention to (and if you're not sure, ask a representative) whether a fund "locks in" your money for a certain number of years, before you can move that money to another fund selection (at all, or for a surrender fee). In some cases, the "lock" on the money may be worth the return on investment (ROI), but in other cases, you may feel that the flexibility to move money as you wish is more important.
Morningstar, which is a leading investment research and management firm, offers a handy glossary of investing terms, for those who may not be familiar with the world of investments.
Investment Performance
This is the "report card" for the investment, which tells how well it has performed over time. If you have money invested with a fund that performs well, then you receive a greater gain, or Return on Investment (ROI) than you would have, had that money been invested with a fund that did not perform as well. Investing can be unpredictable, and getting an ROI is not guaranteed. No asset class or category performs consistently better than another, as demonstrated on this Periodic Table of Investment Returns by Callan investment consulting firm. Past performance is not necessarily an indicator of future performance.
Performance information on all of the investment funds available within SUNY's plans, is available on each investment provider's web site, along with prospectus (projected performance) information. When looking at fund performance details, you may want to pay attention to the below for each fund choice:
- Inception Date (this is when the fund was "born")
- Performance History (the % of gain or loss, usually shown for the last 1, 3, 5, and 10 years)
- Benchmark (the % of gain or loss for similar funds, for performance comparison)
These details may be displayed as text or graphically on a fund's performance record, as shown in the below examples:
These details will help you decide which funds you expect to perform well, based on how long the fund has existed, how well it has performed in the long- and short-term, and how its performance compares to the performance of similar funds. This information can help you make more educated decisions on which funds you will invest in, after also considering other key points (e.g., the cost of investing in a fund, and balancing the riskiness of your fund choices overall). Contact the SUNY plan providers (Corebridge, Fidelity, TIAA, Voya) for assistance in assessing investment performance, at no charge.
Investment Cost (Fees)
Fees are the costs associated with investment funds. Fees vary, based on the investment itself, and the investment provider (e.g., Corebridge, Fidelity, TIAA, Voya) who makes it available as a choice in the retirement plan (e.g., SUNY 403(b), SUNY ORP). Fees pay for costs associated with managing the fund, including monitoring its performance and providing advisory services. Fees are generally calculated as a percentage of the amount of money invested in the fund.
Check each investment provider's web site for the most current fee information about each investment option available within SUNY's plans.
A higher investment fee does not guarantee a higher ROI, nor does a lower fee guarantee a lower ROI. Looking at fees will help you decide which funds you think are worth the cost (e.g., fees) of investment with them. This information can help you make more educated decisions on which funds you will invest in, after also considering other key points (e.g., the performance of a fund, and balancing the riskiness of your fund choices overall). You can also discuss fees with the SUNY plan investment providers (Corebridge, Fidelity, TIAA, Voya), at no charge.
Investment Balance
Investment funds are organized within asset classes and categories, such as equity/stocks, fixed income/bonds, cash/money market, and real estate. Some asset classes tend to offer higher-risk ("aggressive") investment choices, while others tend to offer lower-risk ("conservative") investment choices, as seen below:
It may seem like you would gain the most by investing only with the riskiest funds, but remember that "what goes up, must come down" - choosing only the riskiest funds could mean that if the market goes down, you could lose more of the money invested with those funds. Similarly, it may seem safest to invest with only the most stable, least risky funds, but also remember the old saying, "no risk, no reward" - choosing only the most stable funds could mean that your investments won't grow enough to financially support you in retirement.
It's healthy to diversify your fund choices, which means to invest across a variety of asset classes/categories, and determine the right balance of risk and stability for your situation, with the goal of maximizing your reward while minimizing your risk. During the earlier stages of your career, you may be able to take more risks with aggressive investment choices, because you have more time left in your career to compensate for any losses. During the later stages of your career, you may wish to take fewer risks and be more conservative with your investment choices, since you have less time to compensate for any losses.
The riskiness of a fund can be displayed differently on a fund's fact sheet, as shown in the below examples:
A higher investment risk does not guarantee a higher ROI, nor does a lower risk guarantee a lower ROI. Looking at your risk tolerance (i.e., how much of your money you are comfortable putting in riskier funds vs. more stable funds) will help you decide which funds you think are worth the risk of investment with them. Contact SUNY plan investment providers for FREE assistance in developing an individual risk profile. For more information about balancing your investments, read the below articles:
This information can help you make more educated decisions on which funds you will invest in, after also considering other key points (e.g., the cost of individual funds, and the performance of individual funds).
Monitoring Your Investments
Once you've selected investment funds, you should revisit your fund choices on at least an annual basis, to be sure that they are keeping you on track for retirement readiness, though you may wish to do this more frequently during the years just before retirement. You might mark your calendar to do this at the same time every year (e.g., in January or when filing your taxes).
Remember, as a SUNY plan participant, the investment provider representatives (Corebridge, Fidelity, TIAA, Voya) provide financial planning and investment guidance services AT NO CHARGE. Contact provider(s) of interest to discuss whether your investment choices are providing a reasonable rate of return for your retirement readiness, and for any questions about their available investment options within SUNY's plans. You are also encouraged to visit the investment providers' web pages, as they each offer a unique set of retirement & savings tools and resources.
For further information and/or assistance, please contact the Benefits Office at your State-Operated College or Community College campus.
Please note that this information has been prepared as a general summary of the benefits available to SUNY employees. It cannot provide you with the complete details on all benefits related matters. You should carefully review and research the options available to you before making any enrollment decisions. Only authorized representatives from each plan administrator or benefit plan provider are adequately knowledgeable and experienced to fully address your questions or to assist you with many of the technical aspects of their respective programs. The information contained in all SUNY publications and web sites is intended only as a basic summary overview and to provide you with basic points for your consideration. You are invited to contact representatives from the benefit plan in which you are interested for additional information or with specific questions about their respective benefits or coverage.
