May 2013 DC Update
Adding It Up: Consolidating Retirement Accounts
Do you have money in a previous employer’s 401(k) or other retirement plan? While there’s certainly nothing wrong with maintaining multiple retirement accounts, doing so can make it difficult to manage all of your retirement assets. As a participant in the deferred compensation plan, you do have the ability to roll assets into the Plan from various account types (like a 401(k), 403(b), 401(a), Traditional IRA or governmental 457). Rolling assets into the deferred compensation plan has several advantages:
Simplified Account Management
Reducing the number of statements, emails and investment portfolios that you monitor can simplify the retirement savings equation, especially when life and career events require you to adjust your retirement savings strategy periodically.
Lower Fees and Investment Costs
Not all retirement savings plans are created equal. Many participants roll their assets to the deferred compensation plan because participation fees and expense ratios on the investment options within the plan are lower than with previous employer plans. We encourage you to examine what you’re paying to keep assets in other retirement accounts and compare those costs with what you’ll find in the deferred compensation plan.
Easier Access to Funds in Retirement*
By consolidating accounts, you will enjoy a more streamlined withdrawal process once you leave work. This becomes especially true once you reach age 70 ½ and must begin taking Required Minimum Distributions (RMDs). If you choose not to consolidate retirement accounts, you must monitor the annual withdrawal requirements for each account to ensure you’re in compliance.
While the choice is certainly yours, rolling other retirement savings account assets into the deferred compensation plan could simplify your life and save money along the way. Download our Incoming Direct Rollover Form to get the process started, or call 800-392-0925 for more information.
*Because certain account types maintain specific distribution rules, rolled-over amounts may be segregated within the deferred compensation plan.
Percentage-Based Contributions and Auto Increase
Percentage-based contributions are quickly becoming a popular option for plan participants. This alternative to flat-dollar contributions allows you to defer a percentage of each paycheck to the deferred compensation plan. The result is an automated savings strategy that will ensure your contributions grow with your career. To compliment this savings approach, the newly launched auto increase feature gives you the power to increase your contributions by a percentage that you set on an anniversary date you establish. When combined, these automated savings tools help you stick to retirement savings goals throughout your career. Log on to Account Access and navigate to the Contributions page under the Manage My Account tab to adjust your contribution type and participate in the auto increase program.
Financial Plans
It’s true that saving for retirement requires time, money and patience, but it also requires a plan. One of the many benefits of participating in the deferred compensation plan is that we offer both free and fee-only financial planning services.
Our Snapshot Financial Plan is for early to mid-career individuals who want a quick retirement forecast of their savings needs. It requires minimal time to complete and is free of charge. The Goal-Specific Financial Plan provides a detailed analysis of one or two financial goals you select, including retirement planning, asset allocation, education planning, major purchases and insurance planning. This plan is $175, or free for participants with $100,000 or more in total account balances with the Plan. The Comprehensive Financial Plan looks at several aspects of your overall financial situation and creates a detailed outline for you. This plan is $450, or free to participants with $200,000 or more in total account balances with the Plan.To begin the financial planning process, log on to Account Access and choose Financial Planning under the Planning & Tools section. Choose the financial Plan that's right for you and click the Proceed button. Once you complete the form, a CFP® Professional from our record keeper, ICMA-RC, will follow up with you by email with more information. You can also get started by sending an email to financialplanning@icmarc.org or contacting the Plan Information Line at 800-392-0925.
State Employee Recognition Week
In commemoration of State Employee Recognition Week, we’d like to thank you again for your public service to the state of Missouri and support of the deferred compensation plan. We look forward to seeing you Friday, May 31 at State Employee Recognition Day. Be sure to visit our booth for a chance to win, among other prizes, our Goal-Specific Financial Plan (a $175 value).
Stay Connected
You can find the State of Missouri Deferred Compensation Plan on Facebook, Twitter and YouTube. Whichever you prefer, staying connected with the Plan is a great way to receive timely plan news, valuable savings tips and more.