EXPERT ADVICE MAKES TAX TIME LESS TAXING

March 6, 2013 | CUNY Matters, The University

Saving for retirement — or for anything — may not be a typical priority for those in their 30s. But Amy Jeu, 35, a Hunter Geoscience College Laboratory Technician, first learned that money mattered from her Chinese immigrant parents. In Brooklyn, her mother and father ran, at various times, a candy store, a coffee shop, a Laundromat, a take-out restaurant, a tackle store and an aquarium.

“At 4 years old, I was in the shop with them,” she said, smiling broadly at fond memories of how even as a little girl she helped her family grow its businesses. But though Jeu grew up to be someone who was very good at saving money, she wasn’t as efficient when it came to making that money work for her. Each year, as April 15 approached, she found that she had earmarked only a very small portion of her wages as pre-taxable income.

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Her tax questions solved, geoscience lab technician Amy Jeu can concentrate on studying stalactites.

Enter James Werner, a Certified Financial Planner for the Halliday Financial Group.  Werner met with Jeu on campus and advised her that it was not too early to begin to grow her own nest egg. The technician, who is a Hunter graduate with a master’s degree in Geographic Information Science from the University of Minnesota, took his advice and invested 15 percent of her paycheck in a Tax Deferred Annuity (TDA), which includes a fee factored in by Halliday.

Werner is one of a number of fiscal professionals who — as a benefit to CUNY employees — are available for consultations regarding tax-deferred voluntary saving plans. Some, like Werner, will meet employees on their campuses, individually or in group sessions. Others are available in their office, by phone or at off-campus presentations. For example, the Teacher’s Retirement System (TRS) invites members who are new to its TDA program to a presentation at its offices in lower Manhattan. A condensed version of the class is also available to participants online.

Job classifications and titles often determine eligibility in TDA plans. But there is at least one CUNY-sponsored 403(b) TDA plan available to all employees. Represen-tatives from TIAA-CREF, TRS and Met Life can also provide TDA plans. These TDAs are investments that can be made in tandem with pension contributions or after an employee has vested in a pension plan and is no longer making his or her own contributions. Other voluntary savings plans include the New York State Deferred Compensation Plan 457(b) and the City of New York’s 401K Retirement Plan, available only to community college employees.

Since this is not a one-size-fits-all endeavor, see your College Benefits Officer for more information.

For TDAs, enrollment is open all year. But with April 15 approaching, not only was Amy Jeu  delighted to have a TDA, she also was comforted that as a Halliday client she is entitled to free financial advice regarding other matters. This is especially important to her this tax season since, as a result of damage from Hurricane Sandy, Jeu felt she needed to sell her house in Coney Island. She is now looking to purchase a condominium on higher land.

“I think this year’s taxes will be very, very confusing,” she said. “Flood, damage, loss, FEMA money….”

TIAA-CREF, which also offers TDAs to CUNY employees, has similar services. “We provide advice around all of the partici-pant’s assets, not just the TIAA-CREF products,” says Raymond J. Schmierer, director of its Field Consulting Group. TIAA-CREF manages some 93% of money that CUNY employees are saving for retirement.

Halliday consultants such as Werner and Denis Moynihan, as well as Ira Black of TIAA-CREF, will figuratively walk employees through the often complicated landscape of deferring income for both tax savings and retirement.

To this, University Executive Director of Shared Services Leslie Williams adds:  “In particular, I would encourage all employees who are no longer required to contribute bi-weekly to their pension plan to take the opportunity to increase their retirement savings by participating in, or increasing their contributions to, one of the various voluntary tax-deferred savings plans…. This would be an excellent opportunity and an easy way to increase savings and lower taxes.”

Maxine Fisher, now retired from CUNY, was among those advised by Black and says she couldn’t be happier. Over three decades as an administrator, Fisher ran an exciting exchange program with the University of Paris that enabled more than 2,000 American and French students to study at each other’s universities. About her retirement fund, though, Fisher had what she  called “a foggy idea” of how she would support herself when she left the University. Then, about seven years ago, a relative insisted she ask at Queens College — where the NY/Paris Exchange Program is based — about setting up a voluntary retirement savings plan. This led her to Black. He met with her in his Manhattan office and spent more than an hour explaining why she needed to put more of her salary into a TDA.

Over the years, incrementally and with advisement from Black, Fisher moved from deferring about 3 percent of her income to more than 20 percent. Last December she retired, although she still teaches an English course at Queens College and is now running a program in which classical musicians who are Queens College students bring chamber programs to public schools. “I have Ira Black to thank that I have been able to retire,” says Fisher, now 65.

Two other University employees who have deferred part of their incomes are Jean Willis and Susan Jones-Crenshaw — respectively payroll director and assistant director of payroll at Hunter College — both of whom, like Amy Jeu, used Halliday.

Willis, 66, has worked for CUNY for 37 years, is planning on retiring this year and hopes to volunteer in literacy programs and food banks. Crenshaw, 50 — who has a bachelor’s and master’s degree from Hunter —  is now confident that in about 15 years she, too, can retire. Werner says he set up “a plan to allow Susan to make decisions on Susan’s terms; to eliminate the element of surprise.”

Meanwhile, she too, is celebrating having less taxable income as of April 15. “It lowers my gross pay,” she said. “I’d rather take it and put it away before Uncle Sam can.”

For services, benefits and contact information, visit your campus human resources director at www.cuny.edu/campushumanresources