If you’re like most state employees, you probably did a little happy dance when you heard the 5.5% cost of living increase that was passed by the General Assembly and signed by the governor. A good way to make the most of your raise is to tackle a financial goal, like saving for retirement. For example, if you have been contributing $25 every semi-monthly paycheck for the past 5 years to your MO Deferred Comp account and decided to increase your contribution to $50 for the next 25 years, your balance at retirement – assuming a 6% rate of return – could be approximately $82,539. If you changed your contribution to $50 AND increased your paycheck contributions by $10 every year using the automatic increase tool, your balance could be closer to $205,247 after 25 years. This chart also shows what you could potentially have at retirement if you increased your contribution to $100 and $150 per semi-monthly paycheck or left it at just $25 a pay period. Increasing your contributions to your deferred comp account, even if it’s by $50 or a couple percent, is a great way to boost your retirement savings balance without feeling the pinch in your wallet. If you would like to see how saving your raise could affect your deferred comp balance, visit modeferredcomp.org and use our Grow Your Retirement Savings Calculator or set up an appointment with your local financial education professional.
