Maximize Your Match
It is hard to imagine a scenario when turning down free money is a good idea. If you don’t contribute enough to your retirement to earn your plan sponsor/employer match, then you are turning down money you could otherwise use for your retirement. Be sure to take advantage!
Choose a Percentage, Not a Fixed Amount
Matching formulas typically require you to contribute a certain percentage of your pay to earn plan sponsor contributions. If you choose a flat-dollar amount to get the match in the first year, when your salary increases, you may no longer be contributing enough.
Contributing a percentage also helps you save for your financial future because as you earn more, you will automatically save more. It can be difficult to change your spending habits after you’re used to receiving a certain amount of pay. However, you likely won’t miss any pay you don’t see.
Save More When You Can
Simply contributing enough to earn your match is probably not enough to prepare for a financially secure retirement. Plus, saving more might reduce your taxes.
Before-tax retirement contributions aren’t taxed until they are withdrawn from your account, which means they reduce your taxable income in the year they are contributed. Learn more how contributing to retirement can help you save on taxes.
You’re allowed to make annual personal contributions of $22,500 for 2023 ($30,000 if you are 50 or older), according to IRS rules. Employer contributions are not included in your annual contribution limit. Learn more about IRS limits.
Start Saving Now
You can begin contributing to UMPIP or change your contribution percentage at any time by submitting a Contribution Election form.
The longer you wait, the more you’ll have to set aside to prepare for your financial future, and you’ll miss out on potential earnings on your investments.
So start or increase your savings today!
Earn a Full Match for Months Missed this YearEven if you did not begin contributing to UMPIP on January 1, there is still may be time to earn the full match. CRSP participants (and some RPGA participants) can catch up contributions. Here’s how: 1. Submit a Contribution Election form to your conference or salary-paying unit indicating the percentage of compensation you would like to contribute to UMPIP. 2. Make sure you contribute enough to make up for the months you missed. For example, if you are in CRSP and begin contributing in July, you will have missed 6 months of contributions. Therefore, you could:
Spread your extra contributions over as many months as you choose provided you catch up by the end of the year. 3. Don’t know how much you need to contribute to catch up? Review your copy of the Contribution Election form(s) you submitted to your plan sponsor to determine the percentage or flat-dollar amount you have contributed to UMPIP this year. You may also be able to find this information on your most recent pay stub or by talking to your payroll administrator. |
