2021 | Carilion 457(b) Enrollment & Benefits Update

07 Dec 2021 | Carilion 457(b) Enrollment & Benefits Update

Annual enrollment for the Carilion Clinic 457(b) plan is now open from December 1^st to December 15^th.  Unlike previous years, enrollment is 100% online through the Principal website.  This plan provides a valuable benefit with the ability to contribute $20,500 in addition to the 403(b).  For high-income earners in the top tax bracket, this could provide close to $9,000 in current tax savings.  Based on our experience with enrollment, here are a few tips:

• Once the deferral rate is entered during online enrollment, you can’t go back and change it.  If you want to max out the 457 contribution and spread it evenly across pay periods, you need to defer at least $789 per pay period (based on 26 pay periods). 
• You can set your investment allocations during this enrollment period. Talk to your advisor about the optimal asset mix that helps you answer the ultimate question: “Will I have enough money to retire when I want to?”
• Pay attention to beneficiary designations. While you’re in the Principal portal, double check the beneficiaries to ensure your assets properly flow to your heirs in the event something happens to you. If you have a trust, consult with your estate attorney or financial advisor about how to properly title the beneficiary assignment. 

Other Updates on Carilion Benefits

• 403(b) Roth Option: Carilion recently announced the ability to make Roth contributions (up to $20,500 or $27,000 if 50 or older) to the 403(b) plan.  This option applies to all participants, regardless of how much you make.  Unlike traditional pre-tax contributions, Roth contributions are made after-tax.  While you receive no current tax deduction, you benefit from tax free withdrawals in retirement.  The decision of traditional vs. Roth depends on many factors, including tax rates, savings rates, goals, and more.  Your financial advisor should be able to provide you advice on what option is best for you. 
• Pension: The Carilion pension is an additional benefit offered to many employees with no required contribution.  The important thing to remember with this plan is that it only counts compensation up to the IRS defined limit of $305,000 (2022).  Thus, if you are paid $550,000/year, this pension is unlikely to cover what you need to maintain the same lifestyle in retirement.  

The Bottom Line
Enroll in the 457(b) plan by December 15^th.  Speak with an advisor or Carilion HR about the Roth option in the 403(b) to determine what is best for you.  We’re happy to help, but please understand that we’re in no way affiliated with, sponsored by, or endorsed by Carilion.  Lastly, a comprehensive financial plan that encompasses the Carilion retirements plans, IRA’s, investment accounts, and more is crucial to answering that vital question: Will I have enough to retire when I want to?

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