Why invest in a deferred compensation plan?
For most Americans, pension and Social Security benefits will not provide enough retirement income. The 457 deferred compensation plan makes investing easy and can help you create a more financially secure future for you and your family.
What is a 457 plan?
A 457 deferred compensation plan is a retirement plan that allows public employees, like you, to set aside money for retirement from every paycheck. Employees may defer compensation into the plan on a before-tax basis or after-tax (ROTH) basis.
Deferred compensation plan benefits include:
- Bridging the gap between your pension and Social Security benefits
- A variety of investment options provide opportunities to grow your savings
- Supplemental income in retirement
- Financial counseling
- Participation is optional and you can change your contributions at any time
What is an IRA?
An individual retirement account (IRA) allows you to save money for retirement in a tax advantaged way. You take before-tax or after-tax dollars and deposit them into an IRA account. You can then invest that money in stocks, bonds, exchange-traded funds or other assets. Contributions to Roth IRAs are not tax-deductible, but withdrawals from Roth IRAs are tax-free and there are no taxes on investment gains. Contributions to traditional IRAs are often tax-deductible. However, withdrawals from traditional IRAs in retirement are taxable as ordinary income.
VRS Hybrid Plan Members
Hybrid Plan members are encouraged to maximize your employee voluntary contribution limit to 4.0% to receive up to the maximum 2.5% employer match.