Saving for Your Future

Saving for Your Future is something each staff and faculty member needs to consider. At NC State, we have multiple ways to assist you in saving more for your future.

At retirement, most staff and faculty will have the following in income:

  • Retirement income
  • Social Security
  • Other assets, savings and investments

An Example:

For an employee that works at NC State for 20 years and participates in one of the mandatory retirement plans (Teachers’ and State Employees’ Retirement Program-TSERS or the Optional Retirement Program-ORP) and makes on average $50,000, here is what can be expected at retirement at age 67:

Income from TSERS or ORP Approximately $18,000 per year in benefits
Social Security Income $20,940 per year in benefits
TOTAL $38,940 per year

That means you are $11,060 short of what you were making in salary when you retire.  This is where the 403b, 457 and 401k plans can help to fill the gap.  A short term sacrifice now will result in a long term goal of a more financially secure retirement.

Some Ways to Save More

We have three voluntary retirement plans here at NC State University.

You may participate in these voluntary plans on a pre-tax or after-tax basis through payroll deduction.  Here are the contribution limits for 2016:

For the 403b and 401k (combined for the annual limit)

  • Up to age 49 – $18,500 per year
  • Age 50 or older – $24,500 per year

For the 457

  • Up to age 49 – $18,500 per year
  • Age 50 or older – $24,500 per year

You can contribute your regular 6% to your mandatory retirement plan AND contribute up the maximum amounts in all the plans listed above.

Pre-Tax or After-Tax (Roth)

One of the great things about these plans are that you have payroll deductions on a pre-tax or after-tax basis.  Unlike an IRA or Roth IRA, you have much higher contribution limits through payroll deduction.  If you get tax refunds back each year, you may want to consider contributing on an after-tax basis.  You pay the taxes on your contributions now, and the money grows tax free.  If you pay taxes every year after you do your taxes, you may want to consider pre-tax deductions.  These lower taxable income and you pay less taxes now.  In retirement, when you take out the money, you then pay taxes on it or through minimum distributions at age 70 1/2 if you are no longer worker for NC State.

For More Information

Click on the web links above for more information.  We encourage you to meet with the vendor representatives.  They all work on salary and no commissions are paid.  Thus, they are not going to push you into investments that do not make sense for you.  The vendor representatives can meet with you on campus at no cost or obligation to you.  Or, you can easily set up your own deductions and select your investment funds or simply pick a life-cycle fund which matches the year closest to your anticipated retirement date.