Savvy school district savers
You’ve most likely heard us say the Deferred Compensation Program (DCP) is a terrific way to save for retirement. And that in addition to your pension, DCP can help you reach your retirement goals. We’re not bragging, but here are a couple of school district (SD) employees who demonstrate what they did or are doing to increase their chances for having a successful retirement.
Kim – Battle Ground SD
“My mom joined DCP when she worked for the state. She’s the one who told me I needed to start,” says Kim, a recently retired employee with the Battle Ground SD. While there, she was the Lead Student Services Coordinator, covering the student data system for 18 schools from pre-k through high school.
Kim started working in 1981 for an educational service district and began socking away $50 a month. As she began earning more, she started saving more.
“I’m not a penny pincher by any means,” she says. “In the last couple years, I had a mindset of what I wanted.” She set a goal for those retirement wants, which included living the same lifestyle she had while she was earning a paycheck.
Kim has a low to medium risk tolerance for making investments. “I work hard for my money, and I hate to see it go. I didn’t take chances. Each raise, I upped it (the monthly amount) a little more. I’d ask myself and my kids: ‘is it a need or a want? You don’t need a new pair of pants all the time.’ We still lived a really good life.”
What is risk tolerance? All investments carry some risk. Generally, younger folks can handle more risk (more growth potential), while people nearing retirement often choose safer options. How much risk you take is really up to you.
Salary increases can add up
Kim sees raises as savings opportunities. “A salary increase doesn’t mean you need to spend it – save it! I taught my kids to save. And also, you should see a financial planner. Go talk to somebody.” Her now 91-year old retired mother who once worked for the state played a key part in encouraging her to save with DCP. “It’s a nice program. I wish my daughter and son had DCP; they have a 401k.”
Her advice? “You have to be strict with yourself. Every penny counts. They say, ‘you can’t take it with you,’” she says. Then she adds with a laugh, “But you can have it when you’re not working anymore.”
Kim retired in June and she’s already feeling the joy. “Retirement is wonderful! Start saving when you’re young and let your money start working for you.”
Troy – Stanwood-Camano SD
Troy began his career in 1997 with the Lake Stevens SD but has spent most of his time with the Stanwood-Camano SD as a technician specialist.
“Working in the tech industry is very satisfying,” he says. “I get to go to the schools and upgrade, repair and plan technology to support the teachers.”
Troy got his DCP savings nudge from an old boss. “My former financial director at the district office recommended it to me.”
When he started saving, he began with $250 per month. Over time, he basically doubled the amount each year and is now maxing out. Troy says his approach to investing is low to somewhat risky. “I added another source (in addition to DCP) to my portfolio.”
One in 20 DCP customers reach the annual maximum limit each year. If you’re curious, here are some average amounts saved by age group.
You can create your own savings goals by joining DCP if your employer participates in the program. And who knows? You might see the kind of success Kim and Troy are enjoying.
DCP resources
The DRS website can help guide you along your path to retirement. If you’re new, here are some DCP resources to get you started:
Enrollment eligibility – make sure you’re eligible for Washington’s DCP by talking to your employer or reviewing this list of eligible employers
What is DCP? – a short introductory video
How to save for retirement with DCP – a Fund Your Future with DRS podcast
DCP investment FAQ – a list of questions customers ask most often, and the answers
DCP calculator – this calculator lets you estimate using percentages
Ready to enroll?
You can enroll online – new DCP customers can also enroll by completing and mailing this paper form.
If you are already enrolled in DCP, do not use this form. To change contributions, add Roth or opt out of automatic enrollment, make the change through your online DCP account or contact 888-327-5596.
Inspired to increase your DCP contributions?
To change your contribution amount, log in to your account. From the DCP account page, select Change Monthly Contribution, Transactions. Your changes can take up to 30 days to go into effect (depending on your employer’s payroll cycle). If you separate from employment and later return to work for an employer who participates in DCP, you can reenroll anytime. If any payments from your account have started, they will stop. Estimate contributions with the DCP calculator.
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Unclaimed funds are money or assets that are owed to you that you didn’t collect or that didn’t get refunded to you.
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