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Kandi WintersBureau Chief
Bureau of Deferred Compensation
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What is Deferred Compensation?
457(b) pre‐tax retirement plan available to all State employees
Automatic payroll deductions (before taxes!)
Don’t pay taxes until you retire
Supplement F.R.S. and S.S.
Complete line‐up of investment options
You decide how and where to invest your money
Consolidate other retirement accounts
Penalty free withdrawals at any age, after termination
The Advantage ofPre-tax Investing
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Plan Ahead.
Experts suggest you will need 75%‐100% of your current salary to live on once you leave employment.
You should be saving at least 15% of your pay each year (including any employer contributions) to meet this goal.
Make a plan to save some from each paycheck
The important thing is to just start!
Example for Delaying
Two Investors, John and Linda, each invest through their employer’s Deferred Compensation plan. Linda starts saving at age 35. John who is the same age, does not start until he is 45. Both save $200 monthly and receive a 7% annual rate of return. The graph shows how much each of them will have accumulated when they reach age 65, as well as how much Linda and John will have at age 65 by saving $25 a month and $600 a month.
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• Other plans are becoming less reliable
• Save more for retirement and keep Uncle Sam out of your pockets (tax benefits)
• Low cost ‐ No administrative fees or commission
• Start, stop, increase, or decrease anytime
• Be as hands‐on or hands‐off as you like
• Every little bit counts
Reasons to Join
Deferred Compensation
Sources of Retirement Income• FRS Pension or Investment
• Social Security Income
•Deferred Compensation:
457(b), 403(b), 401(k), Traditional IRA
• Supplemental post‐tax saving:
Roth IRA, bank savings, CDs
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Investment Providers
• Nationwide
• Empower (Great – West)
• VALIC
• Voya (ING)
• T. Rowe Price
• Charles Schwab (Self Directed Brokerage Account)Enrollment Available through Nationwide
Minimum contribution is only $20/monthly or $10/biweekly ordefer as a percentage of your pay.
Deferral Limits for 2017
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Catch‐up Contributions
50+ Catch‐Up
Participants age 50 and over may contribute $24,000 annually to help save even more as they near retirement.
Standard Catch‐Up
The three years prior to normal retirement age* a Participant can contribute $36,000 annually.
* Participant must qualify for unreduced benefits from the FRS.
Participants cannot use both features during the same year.
• Contribute accrued and sick leave payouts• Roll in DROP accumulation within 60 days• Defer current taxes• Continued financial growth• Taxed distributions as needed
DROP and Accrued Leave
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Consolidate with the Deferred Compensation Plan
Rollover outside pre‐tax retirement plans [403(b), 457(b), 401(k), Traditional IRA] into the Deferred Compensation Plan
– Keep money within a single retirement program
– Minimal fee structure
• NO commission/sales, maintenance or administrative fees
– Multiple investment options• Quarterly Performance Report
– Competitive return rates
– Easily transfer between Investment Providers and/or investments without fee or penalty
Distribution OptionsLeave money in the Deferred Compensation Plan–Money will remain invested– Same benefits as during employment– No required distribution until you reach age 70 ½
• Periodic • Partial• Full• Roll‐out
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Online Enrollment and Contribution Increase
www.myfloridadeferredcomp.com
Bureau of Deferred CompensationDepartment of Financial Services
200 East Gaines StreetTallahassee, Florida 32399
Phone: 850‐413‐3162Fax: 850‐488‐7186
Email: [email protected]
Web: www.MyFloridaDeferredComp.com
