Reflections on Retirement: Filling the gap with voluntary plans to help you meet your retirement goals
For Lisa Hodges, who retired last summer after many years as UFHR’s assistant director for benefits, retiring before the age of 55 meant shifting some of her resources into a 457 plan, which would allow her to access funds prior to age 55 without a penalty.
“A couple of years ago, I learned the differences among the plans and started taking the investments I was making in my 403(b) plans and investing more heavily in a 457,” she said. “Now that I retired early, I can access that money sooner.”
It’s never too soon to plan for your retirement. In addition to state retirement plans, UF faculty and staff can participate in voluntary savings plans via payroll deduction to help them reach their retirement financial goals through tax-deferred and/or Roth accounts.
The two types of voluntary savings plans offered are 403(b) plans and a 457 deferred compensation plan.
403(b) plans are retirement savings plans similar to a 401(k) and offered to employees at public schools and certain tax-exempt organizations. These plans are intended to supplement retirement income from a state plan or act as stand-alone plans. Tax-deferred plans and after-tax Roth plans are available.
A 457 deferred compensation plan is a retirement savings account that enables employees to defer receiving a portion of their earnings until retirement. Like 403(b)s, this plan is intended to supplement retirement income from a state plan or act as a stand-alone plan.
Linda Orfield, former associate controller for University Payroll and Tax Services, retired earlier this year after what she calls her second career at UF. Before leaving UF, she talked to a colleague about 20 years younger than she who had been contributing some portion of his salary to a deferred compensation plan for years.
“I wish I had done that,” said Orfield. “Whatever you think is too small is not too small in order to start saving for retirement. Make it part of your habit and spending pattern to start saving.”
All UF employees — including faculty, TEAMS, USPS, OPS, housestaff, residents, graduate assistants, post-doc associates and adjunct faculty — may participate in these voluntary retirement plans regardless of full-time equivalency (FTE).