Planning Your Future Retirement

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Will you have enough money in retirement? Would you like to estimate what you will receive in retirement benefits from MCERA? Do you need to save more for your future retirement? We’ll help you find out by following the steps outlined below.

Step 1: Get an Estimate of Your MCERA Benefit

When you retire you will receive a monthly retirement benefit payment from MCERA for the rest of your life. Complete at least one of the steps below to estimate what your future MCERA monthly retirement benefit payment amount might be.

Option 1: Use our Retirement Allowance Charts to Obtain Your Retirement Income Replacement Percentage.

Option 2: Use the Benefit Estimate Calculator in Your MemberDirect Account For a Personalized Retirement Benefit Estimate Using Your Salary History.

Option 3: Use the Retirement Benefit Calculation Examples and Multipliers to Manually Calculate an Estimate

Option 4: Submit a Retirement Estimate Appointment Request

Step 2: Understand Your Future Retirement Income

In retirement, you’ll need retirement income to replace the income you received while working. Retirement income falls into 3 categories—Pensions, Social Security, and Savings/Investments. The formula below can be used to estimate your future retirement income.

MCERA Monthly Pension + Social Security + Savings/Investments = 70% to 80% of Salary

The above represents all of your income during retirement, unless you continue to work in retirement. In order to maintain a similar standard of living to what you enjoyed prior to retirement, you will need to have an income that is at least 70%-80% of what you were earning while you were working. It’s not 100% because it is assumed that your expenses will be less when you are no longer working. Examples are buying work clothes or takeout lunches, spending money commuting, or paying into MCERA or Social Security.

Step 3: Get a Social Security Estimate

If you have paid into Social Security for at least 10 full time or equivalent years, you will get to collect a monthly payment from Social Security when you become eligible. You can get an estimate of your monthly payment by using the online Social Security Estimator.

Step 4: Calculate How Much to Save

Once you have estimated the benefit you may receive from MCERA and Social Security, you can estimate how much (if any) you need to save additionally to hit 70-80% income replacement in retirement. You can utilize retirement savings calculators available online. The most useful will allow you to include your MCERA and Social Security estimates. Each calculator may give you somewhat different answers, so try a few of them.

Empower Retirement Calculator

Voya 457(b) Savings Calculator

AARP Income Calculator

Vanguard Calculator

Charles Schwab Calculator

T. Rowe Price Calculator

Kiplinger Calculator

Note: If you worked for other employers with pension plans (Example: CalPERS) and you expect to receive benefits from them when you retire, you should get estimates from them as well (their estimates are not included in your MCERA estimate). They may have online benefit estimators or you may need to contact them to request an estimate. Add these estimates to your MCERA benefit estimate when you’re using the retirement savings calculators.

Step 5: Determine Where to Save Your Money

Remember: You are responsible for your own investment risk. MCERA is providing this information to educate you on some retirement savings options, but you are ultimately responsible for any risk you take with your money.

Keeping your money in financial institutions that pay interest can increase your savings, but may not provide the long term growth needed to fund your retirement. Separating your retirement savings from your other personal/emergency savings can help ensure retirement savings are saved for retirement.

Step 6: Make It Easy With Payroll Deductions

Once you have estimated how much more you need to save for retirement, and you are ready to start saving, set up an automatic payroll deduction to a 457(b) account. Your plan representative will open the account and set up an automatic payroll deduction for you. Money will automatically be taken out of your paycheck and transferred to your deferred compensation account. You will notice a difference in your paycheck, but after a few paychecks you will adjust your spending and be on your way to a healthy retirement savings.

For investments beyond deferred compensation accounts, investment managers will help you set up automatic transfers from your checking or savings account to other investment accounts. Set the transfer to automatically happen on payday so you won't be tempted to spend it.

Step 7: Start a 457(b) Deferred Compensation Account

A 457(b) account is a tax-advantaged account offered to public employees by their employers to save for retirement. The term “deferred compensation” is commonly used when talking about 457(b) and other types of retirement savings accounts. This is because when you have money taken out of your paycheck to put in one of these accounts, you are deferring the compensation you would have received today while you work until you retire.

457(b) accounts are contributed to on a pretax basis and remain tax deferred until distribution. ROTH accounts are contributed to on a post-tax basis and are tax free upon distribution.

How do you start a 457(b) account? Get free financial guidance from your employer's deferred compensation plan representatives.

Note: Empower deferred compensation plans are only available to County and Superior Court employees. The Voya Calpers 457(b) deferred compensation plan is only available to County employees.

Empower - Jose Anaya, 8515 E. Orchard Rd., Greenwood Village, CO 80111

Phone: (707) 292-1448 or (866) 816-4400 - Email: jose.anaya@empower.com

Voya (CalPERS 457b) - David Vallerga, 1030 Nevada St., Redlands, CA 92374

Phone: (888) 713-8244 ext. 6 - Email: David.Vallerga@voya.com

Step 8: Check Your Savings Plan Periodically

Check your savings plan periodically by redoing the steps above. No retirement savings calculator will be able to give you the exact retirement savings amount you need, but they will get you pointed in the right direction. When you recalculate you will have an opportunity to re-adjust your target as needed.