Tag: retirement plan

Don’t Wait to Create a Retirement Savings Plan

Published on by Megan MacGregorLeave a comment

We are committed to helping our employees prepare for a successful retirement by offering several retirement savings plan options, along with tools and resources to help you reach your goals.

Most benefit-eligible employees2 are enrolled in the 403(b) Base Retirement Program, which consists of a 5% employee contribution of your eligible compensation and a generous university matching contribution of 10%. That’s an immediate two-for-one match of your investment for a total contribution of 15%. While this provides a great foundation, you may want to consider additional savings options. MSU also offers two additional savings accounts: the 403(b) Supplemental Retirement Program and the 457(b) Deferred Compensation Plan. For more information about these two accounts, read Your Top Questions about MSU’s Optional Retirement Plan Options.

How to Make a Retirement Savings Plan

It’s normal to have many questions when you start to plan for your retirement:

  • How early should I start planning?
  • How much do I need to save to retire comfortably?
  • Which plan(s) should I contribute to?
  • What can I do to maximize my savings?
  • Are my retirement goals attainable?

The answers will depend on your financial situation and retirement goals. We strongly encourage all MSU employees to make an appointment with their retirement vendor – Fidelity or TIAA – to discuss their options and develop a personalized savings plan. Fidelity and TIAA are financial professionals who can provide helpful strategies, tips, and actionable steps that can help you take charge of your finances.

Additionally, both Fidelity and TIAA have numerous resources – including articles, webinars, interactive tools, and more – to help you learn about saving for retirement and other financial goals.

Don’t Wait to Save: The Power of Compounding Interest

For younger MSU employees, creating a comprehensive retirement savings plan may not be a top priority. Between student loans, rent, childcare, and more, it can be difficult to set aside money for a day 30 to 40 years in the future. But the young have a huge advantage when it comes to saving money for retirement: more time. This additional time allows them to potentially benefit the most from compounding interest, which may lead to greater savings down the road.

Compounding interest basically means allowing an investment to earn money while continually reinvesting those earnings over time. The more time you have, the smaller your original investment may need to be. In the hypothetical example below, a 25-year-old starts saving $5,000 annually ($416 per month), and a 40-year-old starts saving twice as much but waits until age 40 ($833 per month). 

Compounding Interest Graph

The 25-year-old ends up contributing less money over time – $200,000 versus $250,000 – but ends up with a higher balance: $798,735 versus $566,317. In other words, the 25-year-old contributes $50,000 less but ends up with $232,000 more than the 40-year-old who waited to save. As this example shows, younger investors may benefit from saving as much as possible as soon as possible.

If your retirement date is a bit closer, you can still take advantage of compounding interest. However, you may need to increase your monthly contributions to meet your retirement savings goals. Luckily, the IRS allows people who are aged 50 years or older to contribute an additional “catch-up” amount to their retirement plans each year.

As you determine your contribution amount, please note the IRS places limits on how much employees can contribute to a retirement plan each year. To contribute a certain amount, such as $100 per paycheck, you can use the calculating tool for converting a dollar amount to a percentage.

Of course, remember that investment returns are not guaranteed and will fluctuate — in some years you may have gains, and in other years you may have losses. But over time, any investment that has a net gain will have benefited from compounding.

How to Change Your Contribution

While your contribution to the 403(b) Base account is fixed based on your income, you can adjust your contributions to the 403(b) Supplemental Retirement Program and/or the 457(b) Deferred Compensation Plan at any time. To do this, login to the EBS Portal with your NetID and password. Select My Benefits from the top navigation, then click on the Benefit/Retirement Enrollment and Changes tile. Select Enroll/Change my Retirement/Health Savings Account Options from the dropdown menu and click Next. On the Savings Plan screen, you’ll be able to edit your contributions to the 403(b) Supplemental and/or 457(b) Deferred Compensation accounts. Make sure you click through all the screens and hit Save to finalize the change to your contributions.

Questions? We encourage you to reach out to Fidelity (800-642-7131) or TIAA (800-732-8353) for your retirement planning questions. Visit the HR website for additional information on the retirement plans offered by MSU.

1 Please note, that the example above is a hypothetical illustration only and is not intended to represent the past or future performance of any investment. The example assumes contributions are made monthly at a 6% annual effective rate, compounded monthly, and no withdrawals. Actual performance will vary with market conditions. Investing involves risk. There is no assurance that the goals will be met or that the solution or strategy will be successful. This example was developed in partnership with TIAA.

2 Certain types of employees are excluded to participate in the 403(b) Retirement Plan. Please see the 403(b) Base Retirement Program Eligibility Chart for more detail. 

Retirement Planning: 2023 IRS Retirement Plan Contribution Limits

Published on by Megan MacGregorLeave a comment

Whether you’ve just started working at MSU or have been here for 30+ years, it is important that you continue to monitor and adjust how much you’re saving if you want to have a comfortable retirement. The IRS places limits on how much employees can contribute to a retirement plan each year. The IRS recently announced the retirement plan limits for 2023:

  • The annual employee contribution amount increased from $20,500 to $22,500 for 403(b) and 457(b) plans.
  • The age 50 catch-up contribution amount increased from $6,500 to $7,500 for 403(b) and 457(b) plans.

If you want to save as much as you can for your retirement, there is a tool in the EBS Portal called the Max Savings Contributions Calculator available to assist you. This tool automatically displays the remaining amount of retirement contributions you have available before reaching one of the limits, and the equivalent percentage of your pay to help you spread that out for the year.

To access this tool:

  1. Login to the EBS Portal with your MSU NetID and password.
  2. Click the My Benefits tab at the top.
  3. Click the Benefit/Retirement tile.
  4. Select Enroll/Change my Retirement/Health Savings Account Options in the drop-down menu and then click Next in the bottom right.
  5. Navigate in the bar graph to the Savings Plans screen by clicking Next in the bottom right.
  6. The Max Savings Contributions Calculator screen will display. This display will automatically show the remaining amount of retirement contributions you have available (if any) before reaching the IRS limit.
  7. You can adjust the percentage of your contributions to any retirement plans you participate in by clicking on the pencil icon, and then choose Select to make the change.
  8. If you want to enroll in a new plan, begin by clicking on the paper icon next to the plan and vendor of your choosing, and then enter the percentage of your new contribution and choose Select to enroll.
  9. Make sure to click on Save in the bottom right to complete and save any changes/enrollments.

If you are an academic year faculty or academic staff employee, or a Voluntary 403(b) Base participant aged 50 and over, contact the HR Solutions Center at 517-353-4434 or SolutionsCenter@hr.msu.edu for further assistance in calculating your maximum contribution percentage.

Learn More About MSU’s Retirement Plans 

The HR website contains a wealth of information about the different types of retirement plans offered, retirement investment vendors, and planning tools available.

Tackle Savings, Debt, and More During America Saves Week 2022

Published on by MSU Human ResourcesLeave a comment

America Saves Week is February 21-25, 2022! This week is an annual event that encourages you to learn and plan for increased savings, lower debt, investing, and preparing for retirement. You can do all this using resources provided to employees by the university and our benefits partners. Both of MSU’s retirement partners, Fidelity and TIAA, offer ways to plan during this week. This includes live webinars, courses for financial literacy, and other resources. Through America Saves Week, you have access to planning tools for managing financial emergencies, which can be very useful during these uncertain times. 

Fidelity Resources

Check out online workshops from Fidelity that cover topics including “Ditch your Debt,” “Manage Unexpected Events and Expenses,” and “Invest Confidently for Your Future,” among many other topics throughout the week. All the programs can be attended live by registering here and important information can be viewed on-demand as workshops here. Interested in learning the specifics about Fidelity’s rainy day investment and savings plans? Visit their Netbenefits site. Other tools and calculators provided by Fidelity to their MSU members can be found here. 

TIAA Resources

If you feel dissatisfied about your current financial situation, TIAA wants to remind you that you are not alone. Read the 2021 TIAA Personal Finance Index and learn that it’s not just you. Some ways you can start to build financial resiliency with TIAA include contributing to your retirement savings, paying down debt, and growing an emergency fund. According to a survey conducted by TIAA, having more in retirement savings is a top contributor to financial resiliency. Visit the EBS portal to learn more about your contribution options. You can also read about financial vulnerability and how to avoid it in this published study, created to help millennials address their finances.

Schedule a Virtual Consultation with Fidelity or TIAA

Both Fidelity and TIAA offer virtual appointments with financial consultants! Be sure to set up an appointment to get your questions answered for no additional cost. Set up your Fidelity consulting appointment here or set up your TIAA consulting appointment here.

For general questions about retirement, contact the HR Solutions Center at SolutionsCenter@hr.msu.edu or (517) 353-4434 or visit the HR website. For questions about your specific financial plans, contact your vendor. 

jar of money with retirement savings written on the front

Retirement Planning: 2021 IRS Retirement Plan Contribution Limits

Published on by Megan MacGregorLeave a comment

Whether you’ve just started working at MSU or have been here for 30+ years, it is important that you continue to monitor and adjust how much you’re saving if you want to have a comfortable retirement.

The IRS places limits on how much employees can contribute to a retirement plan each year. The IRS recently announced the retirement plan limits for 2021:

  • The annual employee contribution amount continues to be $19,500 for 403(b) and 457(b) plans.
  • The age 50 catch-up contribution amount continues to be $6,500 for 403(b) and 457(b) plans.

If you want to save as much as you can for your retirement, there is a tool in the EBS Portal called the Max Savings Contributions Calculator available to assist you. This tool automatically displays the remaining amount of retirement contributions you have available before reaching one of the limits, and the equivalent percentage of your pay to help you spread that out for the year.

To access this tool:

  1. Login to the EBS Portal with your MSU NetID and password.
  2. Click the My Benefits tab at the top.
  3. Click the Benefit/Retirement tile.
  4. Select Enroll/Change my Retirement/Health Savings Account Options in the drop-down menu and then click Next in the bottom right.
  5. Navigate in the bar graph to the Savings Plans screen by clicking Next in the bottom right.
  6. The Max Savings Contributions Calculator screen will display. This display will automatically show the remaining amount of retirement contributions you have available (if any) before reaching the IRS limit.
  7. You can adjust the percentage of your contributions to any retirement plans you participate in by clicking on the pencil icon, and then choose Select to make the change.
  8. If you want to enroll in a new plan, begin by clicking on the paper icon next to the plan and vendor of your choosing, and then enter the percentage of your new contribution and choose Select to enroll.
  9. Make sure to click on Save in the bottom right to complete and save any changes/enrollments.

If you are an academic year faculty or academic staff employee, or a Voluntary 403(b) Base participant age 50 and over, contact the HR Solutions Center at 517-353-4434 or SolutionsCenter@hr.msu.edu for further assistance in calculating your maximum contribution percentage.

Learn More About MSU’s Retirement Plans 

The HR website contains a wealth of information about the different types of retirement plans offered, retirement investment vendors, and planning tools available.

Retirement Planning: 2020 IRS Retirement Plan Contribution Limits

Published on by Megan MacGregor2 Comments

Could you be saving more for your retirement? Whether you’ve just started working at MSU or have been here for 30+ years, it is important that you continue to monitor and adjust how much you’re saving if you want to have a comfortable retirement.

The IRS places limits on how much employees can contribute to a retirement plan each year. The IRS recently announced the retirement plan limits for 2020:

  • The annual employee contribution amount increased to $19,500 from $19,000 for 403(b) and 457(b) plans.
  • The age 50 catch-up contribution amount increased to $6,500 from $6,000 for 403(b) and 457(b) plans.

If you want to save as much as you can for your retirement, there is a tool in the EBS Portal called the Max Savings Contributions Calculator available to assist you. This tool automatically displays the remaining amount of retirement contributions you have available before reaching one of the limits, and the equivalent percentage of your pay to help you spread that out for the year.

To access this tool:

1. Login to the EBS Portal with your MSU NetID and password.

2. Click the My Benefits tab at the top.

3. Click the Benefit/Retirement tile.

4. Select Enroll/Change my Retirement/Health Savings Account Options in the drop-down menu and then click Next in the bottom right.

5. Navigate in the bar graph to the Savings Plans screen by clicking Next in the bottom right.

6. The Max Savings Contributions Calculator screen will display. This display will automatically show the remaining amount of retirement contributions you have available (if any) before reaching the IRS limit.

7. You can adjust the percentage of your contributions to any retirement plans you participate in by clicking on the pencil icon, and then choose Select to make the change.

8. If you want to enroll in a new plan, begin by clicking on the paper icon next to the plan and vendor of your choosing, and then enter the percentage of your new contribution and choose Select to enroll.

9. Make sure to click on Save in the bottom right to complete and save any changes/enrollments.

If you are an academic year faculty or academic staff employee, or a Voluntary 403(b) Base participant age 50 and over, contact the HR Solutions Center at 517-353-4434 or SolutionsCenter@hr.msu.edu for further assistance in calculating your maximum contribution percentage.

Learn More About MSU’s Retirement Plans 

The HR website contains a wealth of information about the different types of retirement plans offered, retirement investment vendors, and planning tools available.