Working at the University of Michigan comes with outstanding career benefits: access to a generous retirement plan, excellent healthcare, and professional development resources. But maximizing those benefits (and building a complete financial plan around them) takes careful strategy.
At Kraft Capital, we specialize in helping University of Michigan professors, researchers, and staff create personalized financial plans designed to fit both their current needs and long-term goals.
Here’s a straightforward checklist to help you stay on track:
1. Optimize Your Retirement Contributions
UM offers a top-tier retirement plan, but it’s up to you to make sure you’re maximizing it.
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Basic Retirement Plan (BRP): Contribute 5% of your salary and receive a 10% match from the university (12-month waiting period)
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403(b) SRA / 457(b): Consider additional tax-deferred or Roth contributions based on your tax situation
Tip: Knowing which contributions to prioritize can save you significant taxes over time.
2. Review and Align Your Investment Choices
It’s easy to “set and forget” your retirement accounts, but investment choices matter.
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Make sure your portfolio aligns with your risk tolerance and time horizon.
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Review available fund options carefully, as you might have access to low-cost institutional funds.
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Rebalance when needed.
3. Understand Your Health Benefits and HSA Options
Healthcare is a major piece of your financial plan.
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Maximize the Health Savings Account (HSA) if you’re enrolled in a high-deductible plan. HSAs offer triple tax advantages and can be a powerful long-term savings tool.
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Review options like the Flexible Spending Account (FSA) if you don’t have an HSA-eligible plan.
4. Build an Emergency Fund
Even with job security at UM, unexpected expenses happen.
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Aim for 3–6 months of living expenses in a highly liquid account.
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Use a high-yield savings account or a money market fund to keep your cash earning interest without taking unnecessary risks.
5. Develop a Tax Strategy
Between salary, bonuses, retirement savings, and potential consulting work, taxes can get complicated fast.
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Consider tax-efficient investment strategies (asset location, tax-loss harvesting).
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Prepare for Required Minimum Distributions (RMDs) from retirement accounts starting at age 73.
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Leverage opportunities for charitable giving if that’s part of your goals (e.g., Qualified Charitable Distributions).
6. Protect What You’ve Built
Review your insurance coverage:
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Life insurance: Especially important if you have dependents.
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Disability insurance: UM provides basic coverage, but it may not be enough for high earners.
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Umbrella liability insurance: Affordable and often overlooked.
Good planning isn’t just about building wealth. You have to work to protect it as well.
7. Estate Planning Basics
No one likes to think about estate planning, but it’s crucial:
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Create (or update) your will and powers of attorney.
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Ensure beneficiary designations on UM retirement accounts are correct and current.
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Consider whether a trust would benefit your family.
Why Work With Kraft Capital?
We know the University of Michigan benefit system, and we know how to build a full financial plan around it. That’s why we provide comprehensive financial planning, investment management, and tax preparation services.
At Kraft Capital, we specialize in working with:
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UM faculty and researchers navigating potential dual-income or tenure-track complexity,
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UM staff members balancing career growth, family goals, and long-term wealth-building,
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Individuals planning transitions into retirement, consulting, or early retirement.
Financial planning isn’t one-size-fits-all.
We can design a plan that fits your career, your family, and your future.
– Clint Kraft
Founder and Financial Advisor, Kraft Capital