Frequently asked questions
Why save now?
Because your money is invested, it has from now until you stop working to grow tax-free in your IRA. The longer you wait to start saving, the less time you have. The secret of getting rich slowly, but surely, is the miracle of compound interest. Compounding is when you earn a return on both your original savings and the growth of your savings.
It’s never too late to start. There's a famous Chinese proverb that says: “The best time to plant a tree was 20 years ago. The second best time is now.”
What is the minimum I need to put towards my savings goal(s)?
To stay in the service and get Boosts you need to contribute at least $25 per month, or around $5 a week. Drink one less beer or latte a week and achieve your financial freedom!
How much does Xiggit cost? How are the fees taken out of my account?
A flat fee of $2 a month gives you access to all of Xiggit’s services. Xiggit offers automatic payroll deductions, IRA servicing, asset handling, related tax documents, and Boosts. The monthly fee of $2 stays no matter how big your savings get, which is not the case with most other financial services. The fee is automatically collected from your account each month, starting with your first payroll deduction, so there’s never a bill to keep track of. Your employer might be covering this monthly fee, which we think is pretty cool.
Why is my employer signing me up for this?
Your employer wants to see you succeed in gaining your financial freedom both now and in the future! Studies have shown that people are 15 times more likely to save for their future if they have access to payroll-deduction savings plans at work. By giving you access to Xiggit’s automated savings programs, matching funds, and financial education, your employer wants to help you reach your savings goals.
Most Americans (75%) are not saving for their long-term future. 6 out of 10 Americans don’t have enough in their savings to pay for an unexpected expense of $500. This challenge has motivated the government in many states to legislate that every employee has access to a long term savings plan.
How much control do I have over my savings accounts within Xiggit?
Total control. You can increase or decrease the amount you save each paycheck or opt-out at any time. If you opt-out and want to opt back in, you can do that at any time (which isn’t true for many savings programs). In the app, you can also change your savings goals at any time. Your financial freedom - and how you use Xiggit as a tool to get there - is entirely yours.
What is an IRA?
An IRA is an account set up at a financial institution that allows an individual to save for retirement with tax-free growth and/or tax-deferred basis. The custodian of an IRA must be a bank or an entity meeting standards established by the Secretary of the Treasury. You put investments into an IRA.
Why invest in an IRA?
An IRA has two significant tax benefits. One is that your money grows tax-free while it’s in the IRA. You don’t have to pay the taxes each year on the growth of assets in your IRA, which leads to more compounding. The second tax benefit depends on whether your money is invested in a Traditional or ROTH IRA.
Traditional: Contributions to a Traditional IRA are tax-deductible for the current tax year providing you or your spouse are not investing in other employer-offered retirement programs. Reducing the amount of income you are taxed on lowers your tax payment in the current year; however, you will be taxed when you withdraw your money from a Traditional IRA. Roth: Contributions in the Roth IRA are made with post-tax money. That is, the income you have already paid tax on through your employer deductions. With Roth IRAs, you pay your income tax upfront so that you are not taxed when you have withdrawn from your Roth IRAs. More details: https://www.irs.gov/publications/p590a
How much can I invest in an IRA?
For 2020, your total contributions to all of your traditional and Roth IRAs cannot be more than: $6,000 ($7,000 if you're age 50 or older).
How much does an IRA cost?
Typically the financial institution charges between $25 and $50 per year for account maintenance. This includes tracking all the assets held within the IRA, handling all the relevant tax documents, and servicing your IRA. Some financial institutions waive the IRA fee if they are offering other fee-based investment services.
What investments are available in the Xiggit IRA?
Each Xiggit IRA begins with shares of the Tactical Allocation Conservative Fund (TFAZX) and held within the fund. TFAZX is a fund listed with the Securities Exchange Commission (SEC), and you can look up the current and historical value of the shares by searching for TFAZX. The complete details are in the fund prospectus.
Tactical Allocation Conservative Fund is a diversified member of the Collaborative Investment Series Trust. The Xiggit IRA can only be accessed and managed through the Xiggit services.
Our Transfer Agent is Mutual Shareholder Services LLC. They track all shares of the mutual funds, calculate the NAV of the mutual fund, handle all relevant tax documents for the mutual fund, and service your IRA.
US Bank is the custodian of the mutual fund. They are members of FINRA, FDIC, and SIPC. SIPC provides protection for the securities of customers of its members for a maximum value of $500,000 (this includes $250,000 of coverage for claims relating to the loss of cash). Further information is available at www.sipc.com. SIPC may also be contacted at the following address: Securities Investor Protection Corporation, 805 15th St. N.W., Ste. 800, Washington, D.C. 20005-2215; Tel: 202.371.8300, Fax: 202.371.6728; E-mail: firstname.lastname@example.org.
How do I access my money held in my IRA?
The Xiggit IRA offered through the Xiggit app can only be accessed and managed through the app.
Who is the custodian of my IRA?
US Bank is the custodian of the mutual fund. They are members of FINRA, FDIC, and SIPC. SIPC provides protection for the securities of customers of its members for a maximum value of $500,000 (this includes $250,000 of coverage for claims relating to loss of cash). Further information is available at www.sipc.com. SIPC may also be contacted at the following address: Securities Investor Protection Corporation, 805 15th St. N.W., Ste. 800, Washington, D.C. 20005-2215; Tel: 202.371.8300, Fax: 202.371.6728; E-mail: email@example.com.
What is the Xiggit IRA fee?
Xiggit does not charge an IRA account fee. IRA custodial fees are included in the TFAZX fund’s operational expenses as outlined in the prospectus.
Why do my IRA contributions go into my savings account before moving to my IRA?
The TFAZX fund requires $500 to make the first deposit into your Xiggit IRA. Xiggit moves your transfers into your savings until there is $500, then we move that money in chunks to your IRA. After $500, each IRA deposit happens when you have $250.
What is an investment?
An investment is an asset with monetary value that was purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit. When the investment is sold, pays dividends, provides rental income or generates interest the change in monetary value is called the return. The return may consist of gains (or losses).
What is investment risk?
In finance and investing, risk often refers to the chance an outcome or investment's actual gains will differ from an expected outcome or return. In general, as investment risk rises, investors expect higher returns to compensate for taking those risks. The greater the amount of risk an investor is willing to take, the greater the potential return (gain or loss).
What is risk tolerance?
Individuals have different risk tolerance levels. Risk tolerance may change over a lifetime, especially if the value of an individual’s assets change dramatically. At the start of a journey to learn about investing, individuals may want to preserve their assets without the risk of loss and choose conservative investment options. Later, when they are more experienced with investing, have more assets, have an aggressive saving goal, or are more confident about investing they may select investments with more risk. It’s a personal journey for everyone.
What is an investment management fee?
A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting stocks and managing the portfolio.
What are the risks of investing?
As with many things in life, the more you risk, the more you can lose (or gain). In finance and investing, risk often refers to the chance the value of an investment doesn’t grow as expected or loses value. In general, as investment risks rise, investors expect higher returns to compensate for taking those risks. The greater the risk an investor is willing to take, the higher the potential return (gain or loss).