A Word From Human Resources
Start Saving Now for Your Retirement
Now that the semester and Commencement ceremonies are over, I want to personally extend my congratulations to the Class of 2013. While many of you may leave Rensselaer to join the workforce, launch a business, pursue graduate studies, or just relax, there is one important message that I would like to share with our graduates and Rensselaer employees: start saving for your retirement now.
Planning for your financial future may be a new journey for some of you. It is necessary to know that combining an employer pension plan, making contributions into a supplemental plan, building your personal savings, and Social Security benefits are the vehicles to help ensure retirement readiness.
Recently, I read a report from LIMRA, the world’s largest association of life insurance and financial services, regarding retirement savings. Interestingly, the higher education segment represents $320 billion, or 44 percent, of the $727 billion 403(b) market. A 403(b) plan is a U.S. tax-advantaged retirement savings plan that is available for public education organizations, some nonprofit employers, cooperative hospital service organizations, and self-employed ministers.
At Rensselaer, our retirement plans are very competitive. Rensselaer offers a supplemental plan that is referred to as Tax-Sheltered Annuity, or 403(b) plan, through its providers TIAA-CREF and Fidelity Investments. The plan is designed to complement our Frozen Defined Benefits Plan and the Defined Contributory Plan, where the employee makes a 1 percent contribution, with an 8 percent match from the Institute. In addition, the plan allows for a catch-up provision for employees age 50 and older or individuals that have 15 or more years of service with Rensselaer.
In general, some basic saving principles for retirement readiness include saving consistently, diversifying your portfolio, and maximizing your contributions to the Supplemental Tax-Sheltered Annuity plan, if offered by your employer. The money you contribute to a Supplemental Tax-Sheltered Annuity is pre-tax dollars, which would reduce your current income taxes.
Of course, I do understand that there may be competing financial priorities in your life, so the good news is that there are things you can do right now to assist with your retirement readiness. Given the fact that Social Security only provides a portion of what the average retiree needs along with the rising cost of health care, experts say you need at least 80 percent of your pre-retirement income to retire.
It’s never too late or too early to start saving toward your retirement. Even a little can make a big difference. The sooner you start saving for retirement, the more time your money has to grow tax deferred.
For more information, schedule an appointment with a representative from either Fidelity or TIAA-CREF to enroll in a Supplemental Tax-Sheltered Annuity plan. Contact Phil Glackin, senior human resources specialist, at (518) 276- 6369 or at email@example.com.
Have an enjoyable summer!
Curtis Powell, SPHR
Vice President for Human Resources