Nearing Retirement
Retirement is just around the corner.
Are you ready?
Find out how Texas Children's can help.
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Nearing Retirement
Texas Children's Retirement Benefits
- Pension Plan (Cash Balance Pension Plan)
- 403(b) Savings Plan
Plus
- Other Income Sources
- Steps to Help You Prepare
Nearing Retirement
What do you have?
In this module, you will find helpful information on plans, programs and services available through Texas Children's to support you in your retirement. In addition, you may qualify for Social Security. But remember, Social Security will only provide part of your income in retirement - you will need a plan to cover the rest!
What will you need?
What are your income needs in retirement? Your expenses in retirement will likely be lower than your expenses today, but unexpected costs can pop up. For example, are you planning to stay in your current home, or will you downsize? Are college expenses for your child(ren) still a possibility? Women tend to live longer than men, and may need to save more. And don't forget, you will still be paying for food, housing, utilities, taxes, transportation and insurance. Make sure to include these factors in your income plan for retirement.
What is your life expectancy?
How many years do you think you will live in retirement? It might be uncomfortable to think about, but it's very important to consider how long your savings will need to stretch. Here is a handy calculator to help you think through your estimate. Whether you think you will live an additional 15 years or 35 years in retirement, a thoughtful retirement budget can give you peace of mind.
What impact does your health have on retirement?
Make sure you plan for increased health care costs in retirement. Today's healthy retiree can expect to spend an average of $150,000 for healthcare in retirement, a number which continues to increase each year. Long-term care can be especially expensive, and you will likely need it at some point as you age - this tool can help you estimate your long-term care expenses, but the healthier you are heading into retirement, the better. Do what you can now to position yourself for a healthy retirement. As a first step, take advantage of the various employee health and wellness programs offered by Texas Children's.
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.
Nearing Retirement
It All Adds Up
Keep reading to see how your plans work together.
Nearing Retirement
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.
Nearing Retirement
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.
Nearing Retirement
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. If you are age 50 or older, you can make additional pre-tax catch-up contributions of $6,000, in addition to the regular pre-tax contribution limit of $18,000 for 2016!
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 |
| $2,000 | Your Paycheck | |
| X | 6% | You Contribute (Pre-tax) |
| X | 50% | Texas Children's Match |
| $60 | 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% - if you are age 50 or older, you can contribute up to $24,000 pre-tax to your 403(b) account for 2017. Contributing pre-tax dollars lowers your taxable income, so you pay fewer taxes. For more information about IRS catch-up contributions, click here. You can also contact Fidelity at 800-343-0860, or visit fidelity.com/atwork.
Nearing Retirement
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 $24,000 for 2017, including your catch-up contribution of $6,000 if you are age 50 or older. You can contact Fidelity at 800-343-0860, or visit fidelity.com/atwork to make contribution changes.
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 a more conservative investment strategy, to preserve your wealth - rather than risking greater losses in a growth strategy. At the same time, you may live for several decades in retirement, so you may want to keep some investments in growth vehicles as a hedge against inflation. Check here for a quick quiz that can help you decide where to invest your hard earned savings.
Step 5: Retire
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 (10/1 - 9/30) 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 591⁄2. You may want to draw down your 403(b) account balance in regular payments to support your needs in retirement, or use some or the full balance to purchase an annuity that provides a regular payment, as if you continue to receive a pay check, for as long as you live - the choice is yours.
Nearing Retirement
Your Texas Children's Pension Plan and 403(b) Savings Plan are how our organization supports you with income for your retirement. However, we highly recommend you have other resources to make sure you are as prepared as much as possible for retirement.
Nearing Retirement
Put everything together and take the first steps toward your happy retirement.
Step 1: Find out what your needs are.
You may potentially have unexpected costs in retirement, so make sure you think hard and do your research about how much things will potentially cost. Do not forget to take inflation, medical care and emergency expenses into account.
Not sure how much you will need in retirement? Use this handy worksheet to get started.
Step 2: Find out what you have.
Put together the balance of your different savings tools, your personal savings, and any other financial resources you will be relying on in retirement. Does it match up to your needs, or do you need to spend a little more time planning and saving? Use this checklist to make sure you are on track.
Step 3: Make a plan to maximize your resources.
Make sure to convert your high-risk investments to more stable options, and make catch-up contributions to your 403(b) account in order to make the most of your retirement funds. Think about managing expenses - for example, you might want to move to a smaller home in a less expensive area to conserve cash.
Step 4: Relax and retire!
If you have made sure your resources match up to your needs, much of your worry will be behind you. But remember, even after retiring, you should always be on the lookout for ways to improve your financial situation.
If you would like to leave something behind for your loved ones, make sure your estate is in good hands. Have advance directives in place so your loved ones know what to do when you are unable to help them make decisions about your health, wealth and wishes.
Step 5: Withdraw
There is no retirement age requirement for you to begin drawing your benefits. However, you must no longer be employed by Texas Children's to initiate and receive this benefit. 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 (10/1 - 9/30) you complete 1,000 or more hours of service. You are 100% vested upon obtaining your fifth fiscal year or service or are age 65 or older while employed at TCH. You may have to pay a 10% early withdrawal penalty if you withdraw the money before you reach 59.5 You may want to draw down your 403(b) account balance in regular payments to support your needs in retirement, or use some or the full balance to purchase an annuity that provides a regular payment, as if you continued to receive a pay check, for as long as you live - the choice is yours.
Nearing Retirement
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 discussed here.
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 in order 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?
You will be eligible to receive your Pension Plan benefits when you reach age 65, the normal retirement age for Texas Children's. If you have 10 years or more of vested service with Texas Children's, you may be eligible for early retirement at age 55, and thus eligible to receive this benefit. You must no longer be employed by Texas Children's to initiate and receive your pension benefit.
You may begin receive 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 your financial standing in good shape for retirement. 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.
Nearing Retirement
