Retirement should be a reward for your hard work, and planning is key to achieving a comfortable future. Experts recommend replacing 70% to 80% of your working income for a comfortable retirement, which requires diligent saving.
457 Plan
The City offers a 457(b) deferred compensation Plan for non-temporary employees working 20+ hours per week. You can have part of your salary withheld and invested for future payment, which is not taxed until distribution. An after-tax Roth option is also available, where taxes are paid upfront.
457 Roth Option
The 457 Roth option lets you contribute after-tax dollars, meaning you pay taxes now. The benefit is that your withdrawals during retirement are tax-free, provided certain conditions are met.
401(k) Plan
The City also offers a 401(k) plan for non-temporary employees working 20+ hours per week which allows you to save for retirement with pre-tax contributions, which can grow tax-deferred until withdrawal. Taxes are paid upon withdrawal, usually at retirement.
Contribution Limits
- 457 Plan & Roth: Contribute a combined amount up to $23,000 of your compensation. Employees aged 50+ can add an extra $7,500 per year.
- 401(k) Plan: Contribute up to $23,000 of your compensation. Employees aged 50+ can add an extra $7,500 per year.
The maximum contribution limits are set annually by the IRS. By utilizing these plans, you can build a solid foundation for your retirement, ensuring financial stability in your later years.
City Matching
The City will match your pretax contributions in either the 457 OR the 401(k). The employer match is paid up to a percentage of your base wages per pay period. Please note this is for pretax contributions only, there is not a match for the after-tax Roth.
My Retirement Minute
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