Even though we provide our newest members with an invitation to attend one of our Benefit Basics workshop, we realize that we spend a greater amount of time preparing our “well-established members” for retirement. We have pre-retirement seminars that cover many aspects of retirement such as the defined benefit plan, medical and dental insurance, and the state’s deferred compensation plan. Our feedback suggested that we should provide more information to our newer members so that they can prepare for becoming our “well-established members.”
We frequently use the illustration of a three-legged stool for retirement well-being. Those three legs are the defined benefit plan, social security, and personal savings (ie: deferred compensation, IRAs, etc).
While we cannot provide personal financial advice, we can offer some general guidance. Primarily, vested members of MPERS will receive a defined benefit retirement check upon retirement. That retirement benefit is adjusted once a year with a cost of living (COLA) increase. However, the COLA could be a 0% increase in a period of very low-inflation (what we are experiencing in 2016). This is a powerful tool for your financial well-being in your senior years. We have also created several videos that lay out the basics of our retirement plan. Please visit https://www.mpers.org/e-learning-videos/ and click on the Part 1 video link and it will take you to the video.
Additionally, we hope our members are participating in the Missouri Deferred Compensation Plan. Newer members were automatically enrolled when first hired into the plan. We encourage you to save for your retirement using tools provided by the plan. Please visit their website at www.modeferredcomp.org. We strongly encourage our members to log into their account at Mo Deferred Comp and then use the RetiremenTrack program because it will estimate your MPERS retirement benefit and can therefore provide a financial picture that includes the MPERS retirement benefit, estimated distributions of their deferred comp savings, and distributions of any other personal savings. Even if you don’t want to log in, you can still use the RetiremenTrack program.
There are additional savings programs available such as traditional individual retirement accounts (IRAs) and Roth IRAs. There are advantages and disadvantages to each of those accounts so please consult with a tax advisor to ensure you maximize your savings.