In November, Central Rivers AEA hosted a Zoom “Lunch and Learn” meeting with an IPERS representative who did a great job of reviewing important information for those interested in starting the discussion around retirement. (You can view the PowerPoint here)
We know that IPERS is a “defined benefit” plan and retirement income is determined by a formula based on your years of service and salary earned. Although, IPERS is an excellent plan, it is often unable to meet the level of income that you receive as a full-time employee.
One key action you can take to improve your financial future is by taking additional steps to save for your retirement. A Voluntary Retirement Savings Plan (VRSP) allows you to save additional before-tax and/or after-tax money for retirement. Central Rivers AEA offers a 403b voluntary retirement savings plan through the State of Iowa Retirement Investors Club. The salary reduction form and more information can also be found on in the iVisions portal.
Before tax: By participating in a VRSP with before-tax contributions (i.e. 403b), you lower your federal and state taxable wages, but not Social Security or Medicare taxable wages. The contributions and any earnings become taxable when a qualified withdrawal is made in retirement.
After tax: By participating in a VRSP with after-tax contributions (i.e. Roth), you won’t lower your federal and state taxable wages, but qualified withdrawals will not be taxable in retirement and any earnings are tax-free.
In an effort to be fully financially prepared for retirement, we encourage all of our staff to go beyond IPERS, and contribute to a secondary retirement vehicle (i.e., 403B, IRA).
Please let the HR/Business Office know if we can assist you in any way.
(Disclaimer: The content above is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.)