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Texas Retirement System - Saving Money in the Texas Retirement System – Texa$aver

what is it? why enroll? how to enroll who to contact for advice

Full and part-time employees of the state of Texas have the opportunity to save money through a branch of the Texas retirement system known as Texa$aver. Using this system, money is deducted directly from the paycheck prior to income taxes being taken out. Agencies have the choice to offer either a 401(k) plan or a 457 plan, both of which have different advantages. This program does not take the place of the state pension, but is instead designed to supplement the retirement income.

Why Enroll?

While Texas state residents will already receive a state pension, Texa$aver is a great way to increase the amount of money available upon retirement. Additionally, it is always wise to have back-up income for retirement. For those who are trying decide whether to enroll now or wait until later, enrolling in a retirement system early is always the best option as money takes time to grow. Investing a small amount now will yield greater returns than investing a larger amount later.

Texa$aver is an excellent option for those wishing to increase their retirement savings. Any contributions or interest earned on Texa$aver retirement accounts will be tax-deferred until the returns are withdrawn, thus minimizing the amount employees need to spend. Additionally, the Texas retirement system can simply deduct the amount from a paycheck, making savings simple and automatic. Many financial experts agree that the best way to save is to have the money deducted before the paycheck is even deposited. Finally, this plan is perfect for those who want to save but do not have a lot of disposable income. Minimum monthly contribution range from 1% of income for the 401(k) plan to $20 for the 457 plan, ensuring that everyone can afford to save something for their future.

How to Enroll

Enrolling in the Texa$aver retirement system is easy. There is no enrollment period and it is possible to enroll in the 401(k) plan, the 457 plan, or both plans, at any time by simply visiting texasaver.com. What plan the employee utilizes depends on their current employment status, as well as their personal choice. Full and part-time Texas state employees may enroll in either the 401(k) plan or the 457 plan, while higher education employees are not allowed to enroll in the 401(k) plan. Further information about the differences between the programs can be found at the website listed above.

Once the decision about which plan or plan to enroll in has been made, it is important to decide how much money to contribute to the plan. Those enrolling in the 401(k) plan will be required to specify a percentage of their income, while those enrolling in the 457 plan can list a simple dollar amount.

The final step in enrolling in the Texa$aver retirement system is to choose investments. Texas employees enrolled in the program can choose to invest in a Target Date Fund that is closest to they year they plan to retire, or build they may their portfolio from the tem available core funds. Employees willing to pay additional fees for more options may choose to set up a brokerage account or enroll in a managed account service.

Who to Contact for Advice

For basic information on where to enroll or what fees are involved, employees can call 1-800-634-5091 or visit texasaver.com. An advisor service is available to offer investment assistance or help choose investment options. Additionally, those who wish to involve a financial expert may pay a monthly fee for a Managed Account Service.

While it may seem like there are many years to retirement, saving early is always the best option. Additionally, while Texas employees may depend on their retirement pension for their living expenses, additional savings through the Texa$aver system can help pay for travel and entertainment during retirement, or simply offer an important savings cushion. No matter the age or income, Texas state employees can sign up for this savings program at any time, thus maximizing their investment returns.

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