Retirement Investors’ Club (RIC) News

Retirement Investors’ Club (RIC) News

June 2018 

The RIC is the State of Iowa’s voluntary retirement savings program designed to supplement your Social Security and pension plan benefits. Participants in the RIC have two accounts: a 457 account, which receives automatic payroll deductions; and a 401a account, which receives employer-match contributions up to $75 a month for a total of $900 per year.

Contributions into your 457 account can be handled in two different ways. Roth contributions are taxed at the time they are deducted from your paycheck. This allows you to pay taxes on plan contributions upfront and not be taxed on future earnings. Non-Roth contributions are tax-deferred, meaning you aren’t taxed at the time you make your contributions, but you will pay taxes when you withdraw funds from the account. 

Learn more about our employer-sponsored RIC benefits on the DAS/RIC website.

Automatic Roth Investing 
If your goal is to have some tax-free income in retirement, consider participating in the RIC Roth 457 plan. Roth contributions to the RIC 457 plan are automatically taxed at the time they are deducted from your paycheck, making them tax-free when you withdraw funds after retirement. Even if you contribute to a personal Roth IRA, you can make 457 Roth contributions in the same year. Investments available in the RIC are low to no cost and free of sales loads and surrender penalties. If you want to make Roth contributions to the RIC:

  • Current RIC savers - Complete the RIC Account Form to request the Roth amount you wish to save to your 457 account. Both non-Roth and Roth contributions can be made to your same 457 account; there is no need to open another account.
  • New to RIC - Enroll in RIC and indicate Roth for your 457 payroll deduction election.

For more Roth 457 information, see the Roth Summary or go to https://www.irs.gov/retirement-plans/roth-acct-in-your-retirement-plan. Consult a tax professional to determine if post-tax Roth contributions are appropriate for your needs. 

News From RIC Providers

MassMutual has a variety of useful retirement planning tools to help you determine your retirement readiness. Now is a great time to access the MassMutual website for all your retirement planning needs at www.massmutual.com/iowaric. If you are a current plan participant, select “Login” to access account information. If you haven’t set up your online account, you can create an account by selecting “Create an Account” on the MassMutual homepage.

Valic is hosting two new webcasts for employees to learn about calculating retirement income benefits and managing finances to save for the future. Join Bryan Montemurro, CFP®, VALIC District Vice President, for one or both of the free webcasts shown below.

  • June 20 2:30 - 3:30 p.m. - Social Security and Your Retirement   Register
  • July 25 2:30 - 3:30 p.m. - FutureFit University     Register 

Take the next step - Voya invites current participants to start the journey to a secure future by taking advantage of the Financial Wellness Experience. This experience will help you think about your priorities and learn how to take meaningful actions regarding:

  • Living for today while preparing for tomorrow
  • Understanding your full financial picture and making better choices
  • Achieving a state of confidence
  • Having the freedom to indulge a little

Not a Voya participant? No worries, you can find financial education tools and topics at Voya Financial Wellness.