Starting Oct. 1, the Deferred Compensation Program, or DCP, will offer Roth or pretax contribution options. This choice gives you even more flexibility in saving for retirement. New and existing DCP customers can contribute to either or both options. What is pretax? With the DCP pretax option, your contributions are made before tax. Withdrawals, including investment earnings, are taxed as ordinary income in the year of withdrawal. What is Roth? With the DCP Roth option, your contributions are deferred from your already taxed income. Roth withdrawals including any investment earnings, are not taxed if you wait at least 5 years from the date of your first contribution and you are at least 59 1/2 years old.  How do I add Roth? Existing DCP customers can add Roth by logging into your DCP account and making the change. Or you can contact Voya at 888-327-5596 for assistance. New customers can enroll in DCP by completing this form. Attend a live Q&A You probably have a lot of questions about the new Roth option. You can attend a live Q&A this October to get more information for your specific age group. Wednesday, Oct. 4 – Roth for early career (age 18-35) Wednesday, Oct. 11 – Roth for mid-career (age 36-49) Wednesday, Oct. 18 – Roth for near retirement (age 50+) Wednesday, Oct. 25 – Converting your pretax balance to Roth (all ages) Sign up for a Q&A Savings tips based on your age: Roth for early career (age 18-35) You might be more than a few years from retirement age, but here’s the best part: you have the advantage of time. The longer your money is in a retirement savings plan like DCP, the more money you’ll have in retirement. That means, the money you put in today will earn interest for the next 30 years — and trust us when we say, that’s a lot of interest. Advantages of RothYour taxes might be higher in retirement because you’ll no longer have tax deductions for dependents or mortgage interest. For this reason, you might choose the DCP Roth option. When it comes time to retire, you can take money out of your DCP Roth tax-free.   Advantages of pretaxHowever, you may be enjoying the tax advantages you’re receiving now with DCP pretax. The pretax money in your DCP account can also be used to buy an annuity when you retire. For that reason, you may want to contribute to DCP pretax. You can contribute to both. Many people choose to have money in both pretax and Roth. No matter which option you choose, know that starting now allows you to take advantage of the next 30 years of compound interest. Roth for mid-career (age 36-49) If you’ve been a public employee for a few years now, you’ve probably been contributing to a DCP account and may have quite a balance saved up. Consider if you want to convert money from pretax to Roth. You can now convert any amount of DCP pretax funds to the Roth option. Any money you convert before the end of the year will count towards your 2023 income. You’ll be responsible for paying any taxes due when you file your taxes next year. You can contribute to both. Many people choose to have money in both pretax and Roth. The pretax money in your DCP account can be used to buy an annuity when you retire. Having two options allows you pull from different buckets of money. Let’s say you’re already contributing 5% of your income to DCP pretax. If you add a Roth with DCP you have the option to: Convert some or all the funds to Roth. Note: This money becomes taxable income, and you’ll be responsible for paying any taxes due; or Increase your rate and contribute to both (such as 3% to pretax and 3% to Roth, for a total of 6%); or Keep your contribution rate the same and split the difference (for example 2% and 3%, or 1% and 4%). Roth for those near retirement (age 50+) Many soon-to-be retirees may choose to add a Roth option to plan for late-life expenses. Deferring some of your paycheck now to a Roth option can help boost your retirement savings. Those funds will continue to grow over the next several years and when you’re ready, you can take them out tax-free. However, you must meet the minimum qualifications to withdraw your Roth funds tax-free. You must wait at least 5 years from the date of your first contribution and you cannot withdraw prior to 59 1/2 years old.   You can contribute to both. Many people choose to have money in both pretax and Roth. The pretax money in your DCP account can be used to buy an annuity when you retire. Having two options allows you pull from different buckets of money. Can I convert a DCP pretax balance to Roth? Yes. However, any money you convert before the end of the year will count towards your 2023 income. You’ll be responsible for paying any taxes due when you file your taxes next year. How much can I defer each year? If you are 50 years of age or older, you can contribute an additional $7,500 beyond the annual limit each year (a total of $30,000 in 2023). What are the annual limits? These 2023 limits apply to Roth and pretax contributions. This means whether you contribute to Roth, pretax or both, the combined totals must fall within IRS annual limits for the DCP 457(b) program. Minimum monthly contribution limit: $30 or 1% of your earnings Maximum annual contribution limit: $22,500 If you’re contributing to both pretax and Roth, it would be a combined maximum. As an example, you could contribute $10,000 to Roth, and $12,500 to pretax for a combined total of $22,500. If you are 50 years of age or older, you can contribute an additional $7,500 beyond the annual limit each year ($30,000 in 2023). More resources Attend a live DCP webinar or view a recorded DCP webinar. Use the DCP calculator to see an estimate of how much you’ll have in retirement with your current contribution. Explore the new Roth Pretax Comparison calculator. Listen to the DRS podcast or read the transcripts. Popular episodes: A Roth option for DCP How to choose a financial advisor Student loan forgiveness and PSLF DCP earnings and annuities [reblex id='14232']

The DRS home page, header and footer have been updated. Informed by team member and customer feedback, the new home page is focused on the tools and resources customers most use and request. In addition to the home page revision, we’ve updated the header, which is now “sticky” throughout the site. It will stay on top as you scroll the page. The footer will include more options for folks who might not have found what they were looking for on the page.    All stories, pages and resources will keep their URLs, so your bookmarks will work. Using pre-production graphics that may differ slightly from what’s on the page at launch, let’s take a look at what’s been updated, piece by piece. Header The first significant change to the header is its stickiness. Like “freezing panes” in Excel, users will always have access to multiple forms of navigation now – including search and the site index – as they scroll through the page. Our alert bar will now appear at the top of the page when activated. An updated login button allows direct access to OAA, investment accounts and ERA. We’ve added translation help for folks in the top 10 languages spoken in Washington. Customers will find instructions about getting help in their language from the Contact Center as well as a short description of the retirement process. Home page body The feature area near the top of the page has been redesigned but will work like it does now. We’ve added a section for customers to go straight to their plan guide. We’ve also added sections for a FAQ and most-searched content. These task-oriented links are a breeze to update as seasons change and customer needs evolve. They’re also designed to deflect as many calls as possible. There’s a new section designed to drive customers to key calculators, such as the benefit estimator.DCP is one of our top tools that can affect a customer’s retirement, so it has a stronger presence with its video introduction on the home page. We’ve added a member news subscription form directly on the home page. Otherwise, news and events look different but function like they do on the current system. The same is true for the investment login section. Footer The new footer is also designed to deflect calls by offering another path to customers’ most-used links. Questions or feedback? Reach out to Communications at drs.communications@drs.wa.gov. [reblex id='14232']

The overall inflation rate currently sits at 3.7%, but that may not be the figure you’re actually seeing in your household. Your personal or family inflation rate depends largely on where you live and how you spend your money. Understanding that rate can be the key to making smart decisions and making your money last. Every month, the Bureau of Labor Statistics (BLS) tracks the price of 80,000 household expenses and uses that info to calculate the Consumer Price Index (CPI). Everything from house payments to cupcakes gets included. These items get divided into 8 categories: Food and Beverage Housing Transportation Apparel Medical care Recreation Education & Communication Other goods & services Each of these categories are ranked by relative importance to most households. Your personal inflation rate will depend on your levels on spending in each category. For example, if you are a renter and are driving a lot, your inflation rate will likely be higher than someone who has a fixed-rate mortgage and is able to work from home. Where you live will also play a part, especially when it comes to housing costs. The average mortgage or rent payment takes up about 28% of household monthly income. If you live someplace where housing is cheaper, that percentage will go down. If your inflation rate is high, there are some things you can do to lower it. Start by focusing on your biggest expenses: energy, housing, fuel and food. Look for ways to use less energy around your home. Lowering your thermostat a few degrees and turning the heat down when you’re away can help you save. You can lower your monthly fuel costs by exploring grocery store loyalty programs and consolidating your errands to avoid multiple trips. Gas prices vary widely, so try using an app to search out the lowest prices in your area. To save on food, buy in-season and locally where you can, and try meal planning based on weekly specials. Buying some items in bulk can also offer some savings. Sticking to your list is a sure-fire way to keep your bill down as well. Knowing how inflation affects your bottom line helps you identify moves that keep more of your money in the bank. [reblex id='14232']

October is just a few weeks away, which means the Roth option for DCP retirement savings will be available in less than a month. If you are interested in finding out more about the upcoming option, as well as other Deferred Compensation Program features, we have online webinars available. See the live schedule We also have a recorded version of the Roth webinar. See the DCP intro page for more about DCP Roth. Or contact the DRS record keeper, Voya Financial, at 888-327-5596 for assistance. [reblex id='14232']