Retirement Today Newsletter

June 5, 2025

Retirement Essentials: Your 457(b) Plan Benefits

Supplementing your retirement income

Participating in the Erie County Deferred Compensation Plan is one way to help give your retirement savings a boost. Read on to learn more about the plan’s specific details. Or if you’re ready, you can enroll and begin contributing today!

Enroll in your Erie County Deferred Compensation Plan to get started.

Enroll today

Understand your retirement plan’s benefits

…and how they can help you prepare for the future

Opportunities offered through the Erie County Deferred Compensation Plan

Immediate eligibility: no age or service requirements to participate
Convenient payroll deduction
Both pre-tax and Roth after-tax contributions allowed
Higher annual contribution limit of $23,500 versus an IRA limit of $7,000
No income limitation for plan participation in Roth after-tax option (versus a Roth IRA)
Changes to contributions can occur at any time
Immediate vesting of employee contributions and any associated earnings
Rollovers into the Plan are allowed
Permissible withdrawals for unforeseen emergencies; subject to approval
Fee equalization to ensure that qualified participants pay fees in proportion to their individual account balances
Wide variety of investment options including a fixed interest option¹
Guided Portfolio Services^® (GPS)² offered at a reduced fee
Access to a dedicated team of financial professionals

Learn more about your Deferred Compensation Plan details.

See details

_{1. Policy Form series GFUA-398, a group fixed unallocated annuity issued by The Variable Annuity Life Insurance Company, Houston, Texas.

2. Guided Portfolio Services (GPS) is an optional service that offers two approaches to help you achieve your retirement goals. One approach is for do-it-yourselfers. The other is great for those who prefer to have someone else do it for them. Both approaches deliver objective advice from independent financial expert, Morningstar Investment Management LLC, including how much to save, which investments to choose and how much to invest in each. GPS is offered through VALIC Financial Advisors, Inc. and is available for an additional fee. For more information, contact your local financial professional}

Retirement Essentials: The Repeal of the Windfall Elimination Provision (WEP)

On January 5, 2025, the Social Security Fairness Act of 2023 was signed into legislation, repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). This legislation marks a significant shift in Social Security policy, addressing longstanding inequities for millions of retirees and their beneficiaries.

What were these provisions?

The WEP and GPO, reduced Social Security benefits for individuals who received pensions from non-Social Security-covered jobs, such as teachers, police officers, and other public sector employees. Specifically:

WEP reduced Social Security retirement or disability benefits.
GPO reduced spousal and survivor benefits for retirees receiving non-Social Security pensions.

While intended to prevent ‘double-dipping,’ the provision disproportionately impacted retirees who relied heavily on Social Security as part of their overall retirement income.

Example of WEP’s impact:

Sara, a retired public-school teacher, also worked for 15 years in a private sector job contributing to Social Security.
Her projected monthly benefits without WEP were $1,800.
After applying WEP, her monthly Social Security benefit dropped to $800—a $1,000 reduction due to her private sector pension benefit.

Common criticisms of WEP

For decades, WEP faced widespread criticism from retirement advocates who argued it unfairly penalized retirees:

Complexity: The formula was difficult for retirees to understand, and even Social Security Administration representatives often struggled to explain it.
Disproportionate impact: The reduction applied uniformly, meaning individuals with smaller pensions faced the same replacement rate reduction as those with larger pensions.
Limited awareness: Many workers were unaware of WEP’s existence until they started receiving reduced Social Security benefits.

This confusion and inequity led to calls for reform, culminating in its repeal.

Will the repeal of the WEP impact you?

If you worked in a public sector job and contributed to Social Security, the WEP repeal could significantly affect your retirement income. This change is expected to:

Increase monthly benefits: Individuals affected by WEP will now receive their full Social Security benefits, with no reductions tied to their public pensions.
Provide retroactive reimbursements: Retirees may receive a lump-sum payment for benefits withheld in 2024.

To understand how the WEP repeal impacts your benefits, visit the Social Security Administration’s website at www.ssa.gov to review your updated benefits and account details. You should also check your eligibility for retroactive payments or increased benefits.

Financial Wellness: Remaining Calm in Volatile Times

Key principles to help you keep your emotions in check

During periods of market volatility, it can be important to remain calm and focus on your long-term goals. It can also be a good time to talk with your financial professional about a balanced and diversified portfolio. Here are some other key principles to keep in mind during volatile markets.

1. Keep market volatility in perspective

Market volatility is unavoidable and there will always be uncertainty in the markets, but consider focusing on the long-term. Understanding financial market tendencies is essential, and history often provides us with helpful lessons.

Bull markets—periods when markets are doing well—have historically run longer than bear markets, when markets are down. Consequently, those who have stayed invested have typically benefited from subsequent, often rapid rebounds. Another way to evaluate market volatility is to consider drawdowns, or the amount the market declines from its high to its low price within the year. Since 1980, U.S. equities have averaged an intra-year drawdown of about 14%.* So short-term volatility—even if dramatic and unsettling—is to be expected.

2. Choose an asset mix you’re comfortable with

A key to long-term investing and weathering the storm in volatile markets is diversifying your portfolio. Consider your risk tolerance―that is, your ability to withstand market volatility―and your long-term goals and objectives. Then, position your portfolio accordingly with the help of your financial professional. Your financial professional can help guide you and also help answer any questions you may have. Of course, diversification does not ensure a profit or protect against market loss.

Your financial professional is always available to meet with you to review your future goals, current savings strategy and investment mix to come up with a plan tailored just for you.

3. Avoid trying to time the market—stay focused on your long-term goals

In times of market volatility, some investors attempt to move in and out of the market. This usually results in poor returns and missed opportunities. By accepting the inevitable reality of the market’s ups and downs, it is much easier to execute your long-term investment plan. History has shown the nearly impossible task of timing the market consistently. Short-term market behavior is extremely unpredictable and trying to time the market has proven harmful to one’s financial well-being. Past performance is not indicative of future results.

4. Consider investing regularly to help create balance

It may not seem intuitive, but investing regularly, even in market downturns, can help reduce your overall prices at which investments are purchased. Declining markets can present buying opportunities. By investing systematically, investors can buy more shares when prices are low; fewer when prices are high. This approach also has intrinsic benefits by encouraging discipline and it may help to ease the anxiety of daily market fluctuations. Of course, systematic investing does not ensure a profit or protect against market loss.

5. Evaluate the sequence of returns risk if you are nearing retirement

If you’re close to retirement or beginning to withdraw from your retirement accounts, you may want to consider the sequence of returns risk. This is a form of market risk that deals with the timing of negative market conditions on account balances during retirement withdrawals. Withdrawing from accounts during a down market can have a lasting impact on your balances in retirement. Since assets are being sold at a loss, your accounts may not have time to recover in the way they would have during your accumulation phase, or when your investments had time to grow and overcome market volatility.

Options to help reduce this sequence of returns risk could include bucketing retirement assets (into short-term, mid-term and long-term needs), reviewing how your money is diversified and considering the impact of taxes on your withdrawal strategy.

6. Talk with your financial professional

Focusing on the big picture can be difficult during volatile markets. The good news is that you don’t have to do it alone. The best action step you can take may be to talk to or meet with your financial professional. He or she can help answer questions you may have about market volatility and help you make decisions about the best options for your individual circumstances and your financial future.

^{*FactSet, Standard & Poor’s, J.P. Morgan Asset Management, J.P. Morgan Asset Management Guide to the Markets—U.S., 3Q 2024.}

Financial Wellness: Take Control of Your Budget

If you’re similar to the average person, you probably have a budget that you made years ago sitting in an excel spreadsheet somewhere untouched. Or, you may have gone a step further and set up your spending on an app, so you have a place to keep track of purchases. Either way, chances are that you don’t look at your budget very often, and it’s even less likely to be up to date.

While budgeting itself can feel restrictive, knowledge really is key to staying ahead of the game when it comes to your finances. We’ll take a look at how laying out not just your monthly budget, but your actual monthly spending can help you plan for your future financial needs.

1. Check your account statements

The number one guide to knowing where your money goes is to track it… all of it. That means looking back over the past three months’ worth of financial statements to categorize and identify all spending. Include your checking, savings, credit card and any other account you use to make purchases.

You can complete this step manually by creating your own categories in an excel spreadsheet or, if you’d prefer, consider a budget tracker app.

Make sure you also capture cash spent on the go. Consider carrying around a small notebook for a few months and write down any easy-to-miss cash outflows like a cup of joe to go, subway fare, or filling the tip jar. These drips may seem small but they can also add up over time.

2. Categorize your expenses

Now that you have all your spending in one place, it’s time to start thinking about what percentage of your money goes toward which categories. Many credit card lenders and online budget trackers may give you a head start here by automatically categorizing spending into categories like clothing, travel or automobile. Still, don’t feel you have to stick to their pre-prepared categories. The software may be powerful but it can’t know that your recent auto repair bill was for your adult child—and you’d prefer it be categorized under Child Care instead of Auto Maintenance.

At the same time, consider the effect of non-regular but predictable spending like your annual auto inspection and registration. It’s easy to leave these off your budget since they don’t happen on a monthly basis but they are important to your overall picture. Go back over the past year’s statements and identify regularly—yet infrequently—occurring expenses. Add these to your expense categories.

Finally, you’ll want to track your unexpected but necessary spending. Did the roof spring a leak? Did your daughter break her wrist? The car tire went flat? While these expenses can seem unpredictable, when viewed over a long-time horizon, it’s easier to see how often they—or similar expenses—are likely to happen. Over time, you can slowly plan for the impact of these costs so they don’t create a surprise jolt to your budget and set you back from your plan.

3. Compare money spent to income coming in

Once you know how much you’re spending, you’re ready to compare that number to the net amount you have coming in. Be sure to look at all your sources of income including your job, a spouse’s job, any child support, rental property income or any other money you regularly receive.

The hope is that the amount you earn will outpace the amount you’re spending – but that’s not always the case. Don’t fret. Knowledge is the first step toward taking charge of your money.

4. Look for ways to bridge the gap

Now that you’re aware of how much you have coming in and going out, it’s time to assess your current financial situation. Are you happy with the amount you have left over after you’ve accounted for your typical monthly spending? Are you meeting your short- and long-term savings goals? If you are, congratulations! If not, though, it’s time to start looking for ways to create more budgetary space.

Cut down on current costs. Maybe you can brown bag your lunch or cut the cable cord. Look back through your list of expenses and identify the outlays that don’t enrich your life. Those are the most effective areas to cut.

Reduce regularly recurring bills. Set a strategy to pay off credit card balances. Perhaps you can trade in your auto lease for a pre-owned car with a lower payment—or one you can buy outright. These larger money moves can sometimes require a short-term sacrifice but can also set you up for financial security over the long term.

In the end, an effective budget—one that’s created based on your carefully considered needs and lifestyle wants—can create financial flexibility over time, which can ultimately take you down the path toward the achievement of your financial dreams. There’s nothing restrictive about that.

Advisor Connection: Meet with a Professional

Your Corebridge financial professionals are here to help

Reach out to a member of your financial professional team for assistance with enrolling, reviewing your account, or creating a financial plan to meet your goals. Even if you’re not a participant in the Erie County Deferred Compensation Plan, you can still meet with a financial professional at no cost to you. The team is also available to meet with you at your work location! To see when a financial professional will be onsite, review and bookmark our appointment page.