Exciting times
are ahead
as you establish
your career.
But do your future finances look as bright?
Find out how Texas Children’s can help you manage your money for today, tomorrow, and beyond.
Exciting times are ahead as you embark on your career.
Texas Children's Retirement Benefits
- Pension Plan (Cash Balance Pension Plan)
- 403(b) Savings Plan
Plus
- Financial Considerations
- Managing Your Money
Exciting times are ahead as you embark on your career.
What do you have?
In this module, you will find helpful information on plans, programs and services available through Texas Children’s to support your financial well-being both now, and in the future. Before you can start building a plan for the future, or begin working toward your financial goals, it’s important to understand the resources you have available now. How much have you saved? What do your investments look like? Are you comfortable with your saving habits? Even if you feel like you’re in good shape now, it’s never too early to start preparing for retirement.
Where are you on your journey?
Right now, you are early in your career and may be trying to live on a strict budget. That’s perfectly fine, but it doesn’t mean you should take planning for your future lightly – the best time to start working toward your financial goals is now. Make sure you’re taking advantage of tools offered by Texas Children’s, and managing your money safely and responsibly for your time horizon.
What are your goals?
While retirement is a long-term goal for most employees, there are also short term goals that may be more relevant to your situation. Even though you’re just starting out, you probably have big plans for the future. Is your goal to start a family or own a home? What about paying off your student loans or buying a car? It’s important to have short-term goals, but it’s just as important to consider how they can affect your long-term goal of a comfortable retirement.
What will you need?
What do your financial needs look like? While they will change over time, unexpected costs can pop up and you may not have a regular paycheck to rely on during retirement. Don’t forget, just like now, you will still be paying for food, housing, utilities, taxes, transportation and insurance. Make sure to include these factors in your income plan, so you can have a secure and comfortable future waiting for you ahead.
What will you leave behind?
Depending on your goals and situation, you may want to leave something behind for your loved ones. There are special planning considerations for leaving behind gifts or bequests - make sure you check with a financial advisor and get the facts before making any decisions.
Exciting times are ahead as you embark on your career.
Your career is picking up speed, and your savings should be, too.
Keep reading to see how to manage your money for a bright future.
Exciting times are ahead as you embark on your career.
Texas Children's
pays 100%
and you are automatically enrolled once you become eligible.*
Take a Quiz *In order to be eligible for Texas Children's contributions to your account, you must be at least age 21 and must have completed at least 1,000 hours in your first twelve months of employment. Enrollment occurs on April 1 and October 1 - as soon as all of these requirements are met, Texas Children's will start investing for your retirement!
Q.
How much did Texas Children's contribute toward employees' pension accounts in 2016?
A.
Exciting times are ahead as you embark on your career.
Your Texas Children's Pension Plan Benefit
(provided entirely by Texas Children's)
It’s important to know what your estimated benefit will be for your retirement budget, so log in here to see the value of your pension account and update your beneficiary information. Or call the Texas Children's Pension Plan Support Team at 1-800-752-8230 from 8 a.m. – 5 p.m. Central Time.
Step 1: Contribution Credits
Around December 1 each year, Texas Children's deposits credits equal to 3%-5% of your base salary (depending on your years of vested service) to your pension account. You are automatically enrolled and will receive a welcome letter once you enter the pension plan. Texas Children's covers all pension costs and investment decisions associated with the account. Click here to see the value of your pension account!
Step 2: Interest Credits
In addition to regular annual deposits, Texas Children's also applies at least 3.8% interest to your account balance every year, allowing your balance to grow over time via compound interest.
Receiving Your Texas Children's Pension Plan Benefit
After you have completed three years of vested service, you are 100% vested and can receive benefits from the Pension Plan upon retirement. Again, you do not contribute to your pension account - Texas Children's funds the entire Pension Plan. The balance in your pension account is yours when you retire or leave Texas Children's if vested.
Exciting times are ahead as you embark on your career.
In addition to the retirement foundation provided by Texas Children's contributions to the Pension Plan, you have the opportunity to save pre-tax dollars for your own retirement through the Texas Children's 403(b) Savings Plan. While you may be stretching every penny of your paycheck to cover your current living expenses, it’s never too early to begin saving! The sooner you start, the more interest you can earn, which means more savings for your future.
Texas Children's Match
Each time you make a contribution to your 403(b) account, Texas Children's makes one too. We match your deposits, up to 50% of the first 6% of your contribution per pay period, to a maximum of $8,100 for 2017. Here's an example of how it works:
| $2,000 | X | 6% | X | 50% | = | $60 |
| Your Paycheck | You Contribute (Pre-tax) | Texas Children's Match | Texas Children's Contributions |
Total Amount Contributed to Your Account = $180 ($120 from you and $60 from Texas Children's)
These numbers are an example. Your individual experience will vary.
Don’t stop at contributing 6% - you can deposit up to $18,000 pre-tax to your 403(b) account for 2017. Contributing pre-tax dollars lowers your taxable income, so you not only pay less in taxes, but save even more for retirement. You can also contact Fidelity at 800-343-0860, or visit fidelity.com/atwork.
Exciting times are ahead as you embark on your career.
Step 1: Enroll
To participate, you must actively enroll through Fidelity and choose your contribution amount. It is never too late to start or to increase your contribution! Click here to enroll in the 403(b) plan anytime or call Fidelity at 800-343-0860.
Step 2: Contribute
Each pay period, your contribution will be deposited into your 403(b) account. You pay no taxes on contributions until you withdraw them. Remember, you can deposit a total of $18,000 pre-tax for 2017, so don’t stop contributing just because you’ve reached 6%!
Step 3: Texas Children's Match
If you are not contributing at least 6% of your pay, you are leaving free money on the table in the form of the Texas Children's match - that is money that can be working for you in retirement!
Step 4: Invest
You choose how to invest the funds deposited into your 403(b) account from a menu of options offered by Fidelity. At this stage of your career, you may want to pursue an aggressive investment strategy with a mix of funds aimed toward high growth potential. While it’s always smart to be cautious with your money, the more risk you take on, the higher your earning potential. And remember, you still have time to make up any losses you may experience before your retirement.
Step 5: Getting to Your Money
You must no longer be employed by Texas Children’s to initiate and receive this benefit. However, there is no retirement age requirement for you to begin drawing your benefits.
You are always 100% vested in your own contributions to your 403(b) account. You vest 20% in Texas Children’s matching contributions each fiscal year (October 1 – September 30) in which you complete 1,000 or more hours of service. You are 100% vested upon obtaining your fifth fiscal year of service, or are age 65 or older while employed at Texas Children’s.
You may have to pay a 10% early withdrawal penalty if you withdraw the money before you reach age 591⁄2. Once you retire, you may access your account and use the funds at no penalty.
One more way to get your money is a loan – though this method should only be used in case of an emergency. You can take money out of your Savings Plan account with the promise of paying it back. However, while the loan is outstanding, the amount you took out won’t be earning interest, and you likely won’t be contributing to the account beyond repayment, so you’re also missing out on free money from Texas Children’s. Make sure you’ve exhausted all other avenues before you consider taking money from yourself in retirement.
Exciting times are ahead as you embark on your career.
While considering your financial position at your relatively young age, it’s important to think about any new financial responsibilities you may have. Click below to learn about new challenges you may face in the years to come.
Any one of these, and many other issues, can be a financial burden, and can reduce the amount you have available for retirement. Make sure to consider these responsibilities and weigh your priorities when evaluating your financial situation.
Building Credit
Having good personal credit is an important factor in your long-term financial success. It can determine whether or not you can get a credit card with good benefits, a lease or loan for a home, car or business as well as a good interest rate for any debt you carry. A business may even run a credit check on you as part of the background screening when you apply and interview for a new job.
Your credit score is a ranking given to you based on how well you’ve managed your debt in the past. This means student loans, credit card debt and any other times you’ve owed a bank or business money. Paying your credit cards off in full each month and making regular on-time payments of your loans is the best way to demonstrate that you’re good at managing your money, and the best way to raise your credit score. Don’t forget – it’s easier to drop your credit score than to raise it, so try to avoid as many missed payments and maxed out cards as you can. When you start with a plan, you can build excellent credit in no time!
Saving for Your Goals
At this stage of your career, you probably have financial and life goals you would like to accomplish long before retirement becomes a pressing issue. While it is important to keep your long-term goals in mind, there is nothing wrong with aiming to accomplish more personal goals in the near future. However, without decades of savings behind you, goals requiring large capital investment such as a luxurious vacation, your dream wedding or even a small online business can feel daunting financially.
The secret is to pay yourself first – any time you find yourself with extra money, from a raise or a cash windfall, put some away in a savings account right away. If you can, make sure that a portion of your income is deposited directly into a dedicated account (e.g. your 403(b) Savings Plan) before it goes into your checking. That way, you won’t get used to having “extra” money, and you can slowly watch your savings grow! Plus with the Texas Children’s match, you get “free money” as a bonus! Just set a goal, and treat the money you set toward it as untouchable.
Student Loans
If you graduated from a university in the last ten years, it’s likely that you’re still working to pay off your student loans. Paying these off as early as possible is a good idea – in the long run, early repayment can save you a significant amount of money in interest.
If you’re planning on starting a family in the coming years, it may also be smart to think about a specific college fund to pay for your child’s future expenses. However, you should not completely neglect your retirement in order to manage education costs. It is important to find a balance between those savings, your own retirement savings, and loan repayment. Start off small; just pay what you can into your 403(b) Savings Plan, while still managing your more pressing expenses.
Home Ownership
Though most people just starting their careers live in rented property, you may want to begin saving in order to purchase your own home. When considering home ownership, think about how it can affect your long-term financial wellness. You may be responsible for extra expenses, like homeowners’ association fees, property insurance and taxes, maintenance costs and extra furnishings. Owning a home is rarely a true investment, so make sure you are in a stable financial position before accepting heavy debts in the form of a mortgage.
Elder Care
As you and your career grow, you may have relatives who are becoming elderly. If they have not prepared effectively for their own retirement, the financial responsibility of their well-being may fall to you instead. This means supplementing their income to help them pay for rent, food, and medical expenses, or even accepting them into your own home when they are no longer able to care for themselves. Consider talking to a financial planner about these expenses and how to best manage them.
Your elderly family members can also set up advance directives, so you know what to do when they are no longer able to make decisions about their health, wealth and wishes.
Exciting times are ahead as you embark on your career.
If you’re taking advantage of the tools offered by Texas Children’s, you should have a solid foundation to build your retirement finances. However, as important as it is to build your savings, it’s even more important to manage your money effectively.
Step 1: Give your future self a raise.
Enroll in the Texas Children's 403(b) Savings Plan if you haven't already done so, and if you have, consider increasing your contribution. Also, every time you get an increase, think about immediately contributing a little more to your retirement savings before you become accustomed to living on your new salary.
Step 2: Think of your savings as untouchable.
Even though you may have the opportunity to take a loan or an early withdrawal from your account, you should exhaust all other options first – taking money out of your 403(b) account can have a serious impact on your future. Not only will you miss the funds you take out now, you’re also missing out on compounding interest - $10,000 today can grow to as much as $60,000 thirty years from now!
Step 3: Take advantage of Texas Children’s retirement benefits.
Make sure you’re taking advantage of all Texas Children’s retirement benefits. Invest at least 6% in your 403(b) Savings Plan account. If you don’t, you’re leaving behind a stack of free money!
Step 4: Keep tabs on your pension account.
Even though you can’t make contributions, you should regularly check on your potential pension benefit and use that knowledge to help build your retirement budget. If you aren’t sure how much you’ll need in retirement, these tools can tell you how much you’ll spend, and how long you’ll be spending in retirement.
Step 5: Balance your financial priorities.
Other priorities and opportunities may make retirement seem lower on the list – but don’t let that fool you. While retirement is many years away, it pays to be prepared. Consider making small sacrifices today for a big payout tomorrow. If credit card debt or college tuition for kids is looming on the horizon, keep the habit of contributing to your plan, even if it’s just a little bit at a time. Stopping your contributions altogether can have serious consequences when it comes time to retire.
Exciting times are ahead as you embark on your career.
This module contains a lot of information, and having questions at this stage of life is normal. Below are some of the most frequently asked questions employees ask about the programs.
Am I eligible for these plans?
You are eligible for the Pension Plan if you are age 21 or older, and you have completed 1,000 hours or more of work within the first 12-month period following your date of hire, or in any subsequent plan year (October 1 - September 30).
You are eligible to begin participating in the 403(b) Savings Plan on your first day of employment, or any time thereafter.
How is the pension plan calculated?
Around December 1 each year, Texas Children's deposits credits equal to 3%-5% of your base salary to your pension account. Texas Children's covers all pension costs and investment decisions associated with the account.
How can I find out my pension plan balance?
There are several ways to find the balance of your Pension Plan account on www.ibenefitcenter.com. You may request your balance easily online – if you aren’t sure where to look, you may live chat on the site with a plan representative to discuss any questions you may have. Or call the Texas Children’s Hospital Pension Plan Support Team at 1-800-752-8230 from 8 a.m. to 5 p.m. Central Time.
How often does the pension plan update?
Texas Children's deposits credits into your account once per year around December 1. There will be an announcement on Connect when your updated balance is ready to be viewed.
When do I receive my benefit?
To be 100% vested, you must reach 3 fiscal years of service. In order to receive your pension plan distribution, you must meet one of the following conditions:
- Retirement at age 65 or older
- Early retirement at age 55 with at least 10 years of vesting service
- If your balance is equal to or less than $15,000 when you leave Texas Children’s
You may begin receiving benefits from the 403(b) Savings Plan after your service with Texas Children's ends - please note, you may have to pay a penalty if you make withdrawals from your account before you reach retirement age.
Still need some help?
If you are still not sure about something, there are plenty of resources available to help you get into good financial standing. Check with your financial advisor or contact Fidelity at 800‑343‑0860 or visit fidelity.com/atwork. You can also visit reputable websites such as the Financial Planning Association or the National Association of Personal Finance Advisors for more personal help.
Exciting times are ahead as you embark on your career.
