Transamerica Retirement Review
Transamerica retirement solutions is a full-service retirement company, being among the best players in the retirement market. Transamerica was founded in 1904 as a part of the AEGON Group, leading globally in providing life insurance.
From large to small markets, Transamerica Retirement solutions emphasize personalized consulting and offer
The firm began as a mid-market firm specializing in corporate retirement plans to be active in almost every market nationally.
The Transamerica retirement advisors serve the retirement plans and are a subsidiary of Transamerica retirement solutions.
They have their headquarters in Minnesota, with about 272 offices operating in the country.
Products & Services
Transamerica is an established insurance company that offers a wide range of services, including;
- Retirement plans and solutions
- Life Insurance
- Mutual funds
- Exchange-traded funds
- Employee benefits
You can get more information on the different insurance types from their website or consult your trusted insurance agent to establish more about the services.
Transamerica retirement plans
Transamerica provides retirement solutions for all sizes of organizations in many different industries.
Consistent with the ERISA regulations, Transamerica can provide unbundled or fully-bundled retirement plans.
Among the various retirement services and plans you expect to get from Transamerica include;
- Defined benefit
- Defined contribution 401(k)
- Nonqualified deferred compensation
- Total retirement outsourcing
- Pooled assets arrangements.
The industries and market segments TransAmerica specializes in include;
- The manufacturing sector
- Healthcare sector
- Higher education sector
The TransAmerica 401k Plan Overview
Good Retirement plans can be hectic and stressful to establish and implement.
However, in the current times, that does not necessarily have to be the case. The internet has provided an avenue for you to access many financial resources.
Most institutions offering retirement products often put out valuable information in your retirement planning on their websites for potential clients' research purposes.
Transamerica retirement solutions, being one of the major players, offers you valuable tools and massive support in planning your retirement and working towards your goals.
What Is a 401(k) Plan
A 401k plan can be defined as a retirement account that an employer offers their employees.
It is named after the United States Internal Revenue Code. A 401k plan is tax-advantaged and contributions towards retirement are defined for both the employer and employee.
You make contributions towards the 401k account through automatic withholding of your payroll, and an Employer can also make matching contributions to the retirement account.
There are two types of 401k accounts: Roth and traditional accounts.
The main difference between the two accounts is in how they are taxed. In a traditional 401k account, the earnings are taxed when the worker withdraws the money, typically during retirement.
With a Roth 401k plan, however, withdrawal of the investment earnings can be tax-free.
The employee contributions in the traditional 401k account reduce their income taxes for the year, but the withdrawals get taxed.
The contributions are made with post-tax income in the Roth account, but withdrawing the investment return can be made tax-free. As an employee, you can have either two accounts or both, depending on your preference and ability.
Who are Transamerica Retirement Advisors Client Types?
The Transamerica Retirement Advisors serve a wide range of client types. The firm accepts individual clients, estates, charitable organizations, businesses, and trusts.
The minimum account sizes for Transamerica Retirement advisor services depend primarily on your enrollment.
What are the Minimum Account Sizes?
Clients with employer-sponsored plans do not have any minimum sizes required for their accounts, while the minimum account size for employees enrolled in the personalized program is $5000.
Third-party management program enrollment requires a $50,000 account minimum, while the exchange-traded fund portfolio requires a $25000 minimum.
Services Offered by Transamerica Retirement Advisors
The services offered by the Transamerica Retirement advisors, just as the name suggests tailored to assist a client with financial planning and investment management to achieve their retirement goals.
Below is a summary of the specific services Transamerica
Retirement Advisors offer:
Transamerica personalized Portfolios- the personalized portfolios are customized for every client. They are individual-centric investment management programs suited for every client's needs.
Defined Benefit Plan Asset Allocation services- here, the Transamerica firm advises the sponsors of employment plans on their pension plans and the asset allocation of the defined benefits.
With this service, the firm is not dealing with the individual but instead offering insight on a large scale.
Managed Advice Service- With the managed advice service, there are advisory services for both the plan participant and sponsor.
The service intends to offer retirement and investment menus and advice. It also looks to create a plan for asset allocation for the participant.
Third-party money management service-this service gives a money manager accessible to the client.
The third-party managers' primary focus is usually on portfolio models utilizing mutual funds and exchange-traded funds(ETFs).
What are the TransAmerica Fees and Investments?
For about 100 years, Transamerica has been serving customers through various acquisitions and mergers. They have several investment choices for you under their 401k plans.
The investment choices could be:
- short term
- Aggressive bonds
- International stocks
- Multi-asset target date stocks
- Small, mid, and large-cap stocks
The options in the different investments range up to 34, with their ratios varying between 0.58% to 1.45%.
How to Find & Calculate your Transamerica 401(k) Fees?
You need to understand how much your paying up for your Transamerican plan. By calculating your Transamerica fees, you can gauge it against industry averages and other competitors.
Have All the Necessary DocumentsYou require three documents for you to calculate your Transamerica fees.
The Labour regulations department requires Transamerica to provide every client with a document disclosing the fees involved with the investment choices in their plans.
The fee disclosure document should detail the administration fees Transamerica charges.
The disclosure helps every employer evaluate whether the pricing is reasonable for them before making a decision. The form is accessible on the Transamerica employer website.
The statement of assets is a spreadsheet document that breaks down the amount of money you invest during every fund in your 401k account. You can download it from the employer's website.
Third-Party administration Services Agreement
The Transamerica firm does not offer third-party administration services. This service, however, is an essential requirement in all their plans.
A local third-party administrator unrelated to Transamerica, therefore, is contracted to deliver these services.
If your TPA s billing you directly, you need to add their charges to the Transamerica fee to get the total amount it costs.
With the three documents in place, move to step 2.
Calculate Transamerica's Direct 401(k) Fees
Administration fees for 401k accounts can be indirect or direct. You can pay direct fees from a corporate bank account or deduct them from the plan participants' account.
On the other hand, the indirect fees can be paid from the investment fund expenses, reducing the fund's annual returns.
Most people are familiar with the direct fees as they are more transparent. Transamerica, however, rarely charges its prices directly.
You only pay direct fees if your third-party administrator is charging you directly. Here, you will require to have a services agreement with your TPA.
Refer to a recent invoice from your TPA to establish the charges.
After establishing the direct fee your TPA charges you annually, discover the indirect 401k amount that Transamerica charges.
Establish the Hidden Transamerica's 401(k) Fees
The majority of Transamerica's 401k administration fees earnings are from the plan investments fund expenses. There are two types of indirect costs:
Revenue Sharing Fees- These fees involve fees unrelated to the investment to the mutual fund expenses. It reduces the return in investment for the plan participant and compensates the service providers of the plan.
Revenue sharing is the practice of adding non-investment-related fees to the operating expenses of a mutual fund – which reduces the investment returns of plan participants.
These additional fees then compensate plan service providers. There are two general forms:
Insurance companies often use wrap Fees- A variable annuity in place of mutual funds as 401k investments. The wrap fee can increase the underlying mutual fund expenses ratio dramatically, up to 1%.
The wrap and revenue sharing expenses are not disclosed in dollar amounts on the fee disclosure document, making them very easy for you to overlook.
Calculate Your All-In 401(k) Fee
When calculating your all-in 401k fees, get the information you have obtained from the above steps into your spreadsheet. The administration fees and investment expenses total will give you the total cost of your plan.
Calculate your indirect fees and add your direct costs next. If Transamerica charges any direct fees, add them to the Third-party administrator annual fee too.
Evaluate Your Admin Fees on a Per-Capita Basis
After calculating the total cost of your plan, it is advisable to look at the Transamerica administration fees on a headcount or per-capita basis.
The reason to do this is because of excess administration fees. Excess administration fees are fees that extend beyond the service levels your provider offers.
If your plan has many assets, the extra administration fees may not be easy to spot when evaluated on an all-in basis of the investment expenses compared to a per-capita basis.
To get the per-capita administration fees of your plan, get from the spreadsheet the total administration fee and divide by the total number of your plan participants.
Avoid Letting Your Transamerica 401(k) Fees Get Out of Hand
Following the above tips, you can have clear insight into your Transamerica 401k account fees and how they accrue.
With this knowledge, you know that the wrap fees and revenue sharing fees can escalate the cost quickly as your assets grow. It is therefore vital that you compare the plan's costs regularly.
👍 Pros of Transamerican retirement
The option to select funds with low expense ratios is one advantage of the Transamerica 401k retirement plans.
Remember, expense ratios are crucial in determining your investment gains and returns.
There are ideal investment options offered by Transamerica, with an under 1% expense ratio. You can get information on the expense ratio options from the company website.
Assisting customers to manage portfolios is another advantage of Transamerica's services.
They have a tool called PortFolioXpress on the website that helps a customer efficiently manage their account.
It rebalances the retirement portfolio automatically, on a risk preference basis, and the anticipated year of retirement.
The Portfolio express tool is a big plus for customers who prefer taking a hands-off financial approach.
The Transamerica website also provides another tool known as Are you OnTrack to make the whole process more seamless and efficient for their customers.
Based on a customer investing strategy, the tool predicts the monthly or annual income once they retire.
It is crucial and helpful in assisting customers to put their future into perspective, deciding whether to add more savings or continue with the plan in place.
The Transamerica website is easy to navigate for the customers. Any potential client researching to make crucial decisions for their plans will easily access information from the well-organized over-view screen.
You can also complete all the transactions online, which is very convenient for the clients.
They have more than a century of experience in the industry hence their credibility.
👎 Cons of Transamerica retirement plan
Majority of the Transamerica's 401k plans have over 1% expense ratios. Remember, expense ratios are crucial in determining your annual investment returns.
Transamerica is not BBB accredited, and there have been numerous complaints through the BBB.
Securing your future through a retirement plan is an intelligent thing to do. However, settling on the right firm to help you accomplish your retirement goals is no mean fit.
When establishing the right insurance provider to trust your retirement and investment plan, conducting due diligence is a must. Every service provider is different, and all offer other products and services for their customers.
Ensure to conduct intensive research to establish the service provider that suits your needs and requirements.
Consider consulting qualified personnel to help you understand the areas that may seem grey to you.