·         Financial planners estimate that you’ll need between 70-90% of your pre-retirement income to live comfortably in retirement.  Retirement income is typically made up of your social security benefit, group retirement (Wyoming Retirement System or TIAA-CREF Retirement System) and personal savings.  Savings include tax sheltered annuities, deferred compensation, IRAs, mutual funds, CDs or other types of retirement savings plans. 

·         University employees who wish to save for retirement may tax shelter a portion of their earnings in a Tax Sheltered Annuity 403(b) Plan (also called Supplemental Retirement Annuities or Tax Deferred Annuities), and/or in a Deferred Compensation 457(b) Plan.

·         Both Tax Sheltered Annuities and Deferred Compensation are excellent supplemental retirement plans because they are tax deferred (you postpone paying income tax on the invested money and its earnings until you withdraw the funds).  This allows you to systematically save for retirement through payroll deduction and to take advantage of tax deferral and the power of compounding. The younger you start, the better.  But, employees close to retirement may still benefit from tax sheltering.

·         You may participate in a Tax Sheltered Annuity 403(b) Plan with any vendor licensed in the State of Wyoming.  The Deferred Compensation 457(b) Plans are through the State of Wyoming’s Public Employee Deferred Compensation Plan, VALIC, TIAA-CREF and Security Benefit Life. 

·         The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) allows for significantly higher tax deferred limits for both types of plans. Coordination of benefits between the two plans is no longer required and employees may participate in both plans simultaneously without the penalty of a lower limit.  Limits on the maximum investment amount for both plans will depend on individual criteria in relation to the new law.

·         The new law allows: catch-up investments in both plans for those employees who are 50 or older; enhanced catch-up for the 457(b) Plan prior to retirement; a catch-up in the 403(b) Plan for employees with 15 years of service in specific situations where limits had not been reached previously; and tax credits for employees whose adjusted gross income falls below defined limits.

·         To enroll in a 403(b) Plans or the 457(b) Plans, please contact the Payroll Office at (307) 766-6144.  You may start either a 403(b) or a 457(b) with as little as $20 per month. You need to know which company you want to enroll with and have the appropriate application form. The salary reduction begins the month after you complete the enrollment forms. Melissa Mason, Payroll Manager, will run a status sheet for you to see how the new law affects what can be tax deferred for 2002.  The state will provide a $20 match to all University employees interested in participating in a 403(b) or 457(b) plan.

·         If you already are participating and need to make changes in your current amount, please contact Melissa Mason at (307) 766-6144.