October 2014 DC Update
National Save for Retirement Week
Adding It Up: National Save for Retirement Week
I'd been racking my brain for days about how the deferred compensation plan would celebrate National Save for Retirement Week, but the ideas simply weren't coming. And suddenly, it hit me: We should promote the amazing advantages of percentage-based contributions.
So this October, in celebration of the congressionally endorsed National Save for Retirement Week, we're launching the "I Rep-Percent Savings" campaign.
So what are percentage-based savings all about? Changing from a flat-dollar to percentage-of-pay contribution is an easy account adjustment that sets your savings up for future success. How you might ask? Consider an employee who makes $1,250 each semimonthly paycheck. For the past few years, he has been contributing a flat $62.50 with each paycheck, or $125 per month. This employee decides to switch to a 5% contribution instead. Even though he switched his contribution type, 5% of pay still equates to a $62.50 contribution with each paycheck. The difference is that as salary increases, so too will contributions to the plan, which can help keep this saver on track throughout his career without breaking the bank. Another great feature of percentage-based contributions is that savers have the ability to contribute in one-tenth of one percent (0.1%) increments, with 1% being the minimum contribution. This makes it easier to contribute an amount that works best for you. Once you take advantage of percentage-based contributions, you can also utilize the voluntary automatic increase feature. With this tool, you can schedule a contribution percentage increase - again in one-tenth of one percent increments - on an anniversary date you choose. It's yet another tool that takes the stress out of managing your savings strategy.
To adjust your contributions, log on to Account Access at modeferredcomp.org, click the Contributions button in the left menu, click the blue Change Contribution Amount button and change your contribution amount from "dollars" to "percent". For the auto increase feature, navigate once again to the Change Contributions page, scroll down to the Automatic Increase section, and choose the auto increase percentage amount and month the increase will occur each year. You can cancel or adjust your auto increase schedule at any time.
Visit the National Save for Retirement Week page to learn more about the week's activities. And don't miss out on the Retirement and Savings Survey hitting your email inbox on or around October 21. Last completed in 2012, this survey will help the deferred compensation plan gain a better understanding of participant behavior so we can continue to provide unique and valuable education materials.
Educational Seminars and Open Enrollment
As most state of Missouri employees know, October is considered open enrollment period for many popular employee benefits. While the deferred compensation plan certainly experiences increased seminar activity during this time frame, it’s important to remember that there is no open enrollment period for contributions to the deferred compensation plan. In other words, you can begin saving with the Plan at ANY TIME throughout the year. If you’ve participated before, simply log on to your account at modeferredcomp.org, click on the Contributions button in the left menu and establish your new contribution percentage. If you’ve never participated before, visit modeferredcomp.org and click on the red Enrollment button and follow the prompts. Whatever your situation, remember that your new contributions will not be automatically deducted from your paycheck until the first pay period in the month following your election. In other words, if you submit a new contribution amount in October, your first contribution to the Plan will occur in November.
As for the previously mentioned seminars, here are a few open events coming to your neck of the woods in the coming days and weeks:
Lees SummitOctober 10, 2014 at 11:30 amTarget Date Funds: Smart, Simple Saving SolutionLocation: Missouri Dept. of Transportation (MoDOT)
Cape Girardeau
October 15, 2014 at 10:30 am
457 Plan Roth Contributions: New Opportunities
Location: Department of Conservation
Chillicothe
October 15, 2014 at 11:30 am
Target Date Funds: Smart, Simple Saving Solution
Location: State of Missouri Office Building
St. Joseph
October 16, 2014 at 11:30 am
Target Date Funds: Smart, Simple Saving Solution
Location: State of Missouri Office Building
Cameron
October 23, 2014 at 11:30 am
Target Date Funds: Smart, Simple Saving Solution
Location: Missouri Veterans Home
Now That’s a Great Question
Each update we like to highlight popular participant questions in a segment we call “Now That’s a Great Question”. This month’s great question is: What happens to my money if I pass away?
No one likes to think about end-of-life scenarios, but designating a beneficiary could save your loved ones time, energy and money. Generally speaking, your assets will be distributed according to the beneficiaries you’ve established for your account. If you fail to establish beneficiaries, then a probate court could ultimately decide how your assets are distributed. That is why it’s extremely important you log on to Account Access or call the Plan Information Line at 800-392-0925 to designate or review and adjust your beneficiaries. As a reminder, married participants designating someone other than their spouse as a beneficiary must have their spouse fill out the Spousal Consent section of the Designation of Beneficiary form. And finally, if you hold money in both the 401 and 457 account sources, you must establish beneficiaries for both.
To designate or review beneficiaries online, log on at modeferredcomp.org, click on the My Profile button in the left menu, and choose Beneficiaries from the submenu. Click on the Add Beneficiaries button to designate beneficiaries for the first time, or click on Update Beneficiaries to adjust your current designations. Follow the prompts to complete the designation. You will receive a confirmation notice highlighting your updated beneficiaries.
Stay Connected with the Plan on Facebook, Twitter, LinkedIn and YouTube
If you haven't done so already, please be sure to join your coworkers who have found the Plan online at Facebook, Twitter, LinkedIn or YouTube. Connecting with the Plan on social media is the best way to receive the latest Plan news, important savings tips and much more. Until next month, this has been Casey Fick from the State of Missouri Deferred Compensation Plan, your smart, simple savings solution.