• Supplemental Retirement Accounts

     

    There are several different ways to save money for retirement - with all of them, the sooner you start, the better your return.  It is very advantageous to start investing in your 20’s - when it comes to saving for retirement, the more time you have, the more you will accrue. When you invest, you earn compound interest (interest on your interest) so you’ll earn substantially more on your investments over longer periods of time than you would over shorter time frames.

     

    Here is an example to highlight the advantages of investing early: If you invest $2,000 a year (which is just $166 a month) from age 19 to 27 and don’t save anything again beyond that point, and assume your investments yield an average 10% rate of return over the course of your lifetime, you’ll end up with $1 million by the time you’re 65.

    (https://www.cnbc.com/select/why-you-should-start-saving-in-your-20s/)

     

    By law, SCASD employees are automatically enrolled in the Public School Employees' Retirement System (PSERS).  Both the employee and the District contribute to this account.

     

    Many employees elect to open an additional individual retirement saving account and make contributions via direct deposit.  SCASD offers a variety of 403(b) plans in which you can invest.  The 403(b) plan was designed for nonprofit and public school sectors and has similarities to other retirement accounts such as a 401(k) and IRA. A 403(b) plan offers a way for participants to take a systematic and regular amount from their pay each month to save for their long-term retirement goals.

     

    A 403(b) plan:

    • Offers the ability to set aside tax-deferred savings for retirement.  The amount you put into the 403(b) will be deducted from your income, and you can defer paying tax on it. If you put in $30 during a pay period in which you earned $1,000, your taxable income will only be $970.  Once you start withdrawing funds from your 403(b) they will be considered income and taxed as such.
    • Typically includes different options for investments.
    • Takes contributions directly from your paycheck.
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Last Modified on July 27, 2023