By Rohan Rashid, Financial Advisor and David J. Blount, CFP®
If you are a JetBlue Pilot or crewmember, you probably know that you have access to a 401(k) plan that helps you save for retirement. The 401(k) plan offers you a limited selection of investment options that include some mutual funds and target date mutual funds. But did you know that you can also take advantage of a special feature that gives you more control and flexibility over your investments? It’s called a Personal Choice Retirement Account (PCRA) from Charles Schwab, and it’s a self-directed brokerage account that lets you invest in a wider range of options than the ones offered by your 401(k) plan. In this post, we’ll explain what a PCRA is, how it works, and how to make the most of it.
The Power of the Personal Choice Retirement Account (PCRA)
The PCRA is an optional self-directed brokerage account feature that resides within your JetBlue 401(k) plan. This option gives you more flexibility and control over your investments by allowing you to invest in a broader range of securities and portfolios depending on what your retirement plan allows.
The PCRA is still part of your retirement plan, so you can transfer money from your existing Empower JetBlue 401(k) plan to it. You decide how much money to transfer, how to invest it, and you can adjust the amount anytime. You can even transfer money back to your Empower 401(k) plan account if you want. Since the PCRA is still part of your retirement plan it is important to know that this money is subject to the same rules and regulations as your 401(k) plan.
Why Use the PCRA?
The PCRA can be a great way to enhance your retirement savings, especially if you are looking for more diversity, flexibility, and growth potential in your investments. Here are some of the benefits of using the PCRA:
More investment choices.
The PCRA gives you access to thousands of investments that are not available in the standard JetBlue 401(k) plan, such as individual stocks, bonds, ETFs, REITs, and more. This can help you diversify your portfolio, manage your risk, and potentially increase your returns.
More control over your investments.
The PCRA lets you manage your own investments, with minimal interference from JetBlue. You can decide how much money to transfer to your PCRA, what investments to buy, when to sell, and how to allocate your assets.
Access to Professionally Managed Accounts.
The PCRA allows you to Invest in an advisory account managed by investment professionals. This can be beneficial if you don’t have the time or expertise to do it yourself and want more guidance with your retirement savings.
How You Can Make the Most of the PCRA?
While the PCRA offers many advantages, it also comes with some challenges and risks. The PCRA requires you to have the knowledge, time, and discipline to research, monitor, and manage your own investments. You also need to be aware of the potential tax consequences, trading restrictions, and account fees that may apply. A PCRA is not for everyone, and it should not replace your 401(k) plan, but rather complement it.
If you are interested in opening a PCRA, or if you already have one, you may benefit from the guidance of a professional financial planner. That’s where we come in. At Investment& Insurance Planning Services, we take a holistic planning approach to managing your investments. We partner with Morningstar Investment Services, a leading independent advisory and research firm, to identify investment strategies that are aligned with our personalized retirement planning process. Here are some of the services we offer:
Personalized investment plan:
We will work with you to understand your financial situation, risk tolerance, and retirement objectives. We will then create a customized investment plan for your PCRA, based on Morningstar’s time-tested strategies and best practices.
Ongoing portfolio management:
With an advisory account, you get the benefit of professional management. We will implement your investment plan and monitor your PCRA on a regular basis. We will also adjust your portfolio as needed, based on market conditions, your changing needs, and your feedback. This can save you time and give you peace of mind knowing that your investments are being managed by professionals.
Comprehensive financial planning:
Our services go beyond assisting with your PCRA. Through our Invest-Sure Process, we help you create a personalized retirement and financial plan. This includes a thorough review of your income, expenses, savings, debts, insurance, taxes, and estate planning. Additionally, we coordinate your PCRA with your other retirement accounts, such as your IRA, Roth IRA, or pension plan, to provide a comprehensive retirement strategy.
Final Thoughts
The PCRA is a powerful tool that can help you work towards boosting your retirement savings and pursue your financial goals. However, the PCRA also requires you to have the skills, time, and discipline to manage your own investments. Consider working with a professional financial planner who can help you navigate the complexities of the PCRA and make the most of your retirement savings. Contact us today to learn more about how we can help you with your PCRA and your overall retirement planning.
About the Authors
Rohan
Rohan, a true Floridian, is the newest addition to our team of Financial Advisors at Investment & Insurance Planning Services, LLC (IIPS). He embarked on his journey with us as a Client Service Associate in 2021 and has since been dedicated to serving our clients with utmost diligence. Rohan holds a Bachelor of Science in Business Administration with a focus on Finance from the University of Central Florida, equipping him with a solid foundation in the financial field.
In his role as a Financial Advisor, Rohan brings a personalized approach to financial planning, tailoring strategies to each client’s unique needs. He is well-versed in our Invest-sure process, striving to ensure that our clients receive the best advice for their financial goals. A firm believer in constant self-improvement, Rohan strives to make the most out of every opportunity, both in his professional and personal life.
Outside of work, Rohan is an avid explorer of Orlando’s vibrant culinary scene and cultural events. He relishes the opportunity to meet new people and learn from their diverse experiences. His zest for life and commitment to continuous learning make him an asset to our team and a trusted financial professional to our clients.
David
David is President and CEO of Investment & Insurance Planning Services, LLC (IIPS), an independent and fee-based financial services firm that helps clients establish their financial goals and create custom financial plans to help them pursue those goals. We specialize in working with pre-retirees, individuals in a career transition, L3 Harris engineers, and JetBlue pilots. David’s motivation comes from seeing his clients pursue their goals. He says, “It’s very rewarding to help people make successful transitions from one career to another, start a small business, or retire.”
David received his bachelor’s degree from Troy University, and prior to becoming a financial planner in 2000, he had a nine-year career in the United States Coast Guard. He obtained the CERTIFIED FINANCIAL PLANNER™ designation in 2007. He has served as the guest financial expert on Orange Television’s Adult Lifestyle Magazine Show and frequently provides financial and retirement planning workshops. Outside of work, he enjoys spending time with his wife, Michelle, their two kids, Ryan and Alana, their dog, Jack, and visiting with friends. An avid outdoorsman, he enjoys fishing, hiking, exercise, and as a committed person of faith, he enjoys attending church and is passionate about helping people in his community. To learn more about David, connect with him on LinkedIn.
Parts of this article were enhanced with the help of artificial intelligence.
The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
The professionals at Investment & Insurance Planning Solutions do not provide fiduciary services to JetBlue’s retirement plan. Individual investment advisory services are provided separately from any retirement plan consulting services you may receive as a result of your participation in your employer’s retirement plan and involve a fiduciary standard of care, advisory agreement and/or an additional fee.
Descriptions of plan features and benefits are subject to the plan document, which will govern in case of inconsistencies.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking
investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
Stock investing includes risks, including fluctuating prices and loss of principal.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.
Investing in mutual funds involves risk, including possible loss of principal. Fund value will fluctuate with market conditions and it may not achieve its investment objective.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value, and may trade at prices above or below the ETF's net asset value (NAV). Upon redemption, the value of fund shares may be worth more or less than their original cost. ETFs carry additional risks such as not being diversified, possible trading halts, and index tracking errors.
An investment in a target date fund is not guaranteed at any time, including on or after the target date, the approximate date when an investor in the fund would retire and leave the workforce. Target date funds gradually shift their emphasis from more aggressive investments to more conservative ones based on the target date.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.