Employees who pay themselves first by prioritizing savings are more likely to achieve higher retirement income. Should they receive salary raises, consider sending a reminder to “save the raise,” or a portion of it, in their defined contribution retirement accounts or another supplemental savings plan.
Here’s How
- Encourage Hybrid Retirement Plan members to max out their voluntary contributions. Making the maximum 4% contribution means they receive 2.5% in employer matching contributions.
- State employees and employees of participating political subdivisions and school divisions can increase their contributions to the Commonwealth of Virginia 457 Plan for added savings.
Any changes must be submitted by 4 p.m. on the last business day of the month to take effect the following month.
For employees without access to a VRS defined contribution plan, share the other supplemental savings options your organization offers.
More to Share
Voya, the VRS DCP record keeper, offers free digital tools to help employees develop, revise and refine their retirement strategies.
As you communicate with employees this summer, spotlight the following free tools Voya offers to help with near-term and long-term planning:
- The Paycheck Calculator shows how saving all or a portion of a raise will affect current take-home pay. (Click “Get Started,” then select the paycheck option.) Contributions are tax-deferred, allowing employees to pay less in taxes now.
- The myOrangeMoney Retirement Calculator helps employees see how the extra money they save today will boost their future monthly income in retirement.
For a more gradual savings approach, employees can use SmartStep to automatically increase defined contribution plan savings over time.
