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Supplement Your Retirement

three aspects of retirement savings

What Will You Need to Retire?

The ASRS Defined Benefit Plan provides for a guaranteed lifelong monthly benefit to retirees.

There are, however, no provisions in the plan for automatic benefit increases, such as a Cost of Living Adjustment, after retirement. If regular or automatic benefit increases were part of the ASRS orginal design, members and employers would have had to contribute signficantly more in higher contribution rates.

By statute, the purpose of the ASRS is to “Provide a base retirement benefit that is less than 100 percent of a member’s post-retirement income requirements” (A.R.S. § 38-712). Separate post-retirement income from Social Security, individual retirement plans such as a 401(k) or the supplemental plans offered through the ASRS, and personal savings are vital for members to build a more complete and diverse retirement portfolio.

Think of your retirement plan as a three-legged stool. How sturdy is yours?

Your ASRS Benefit

The average ASRS benefit payment for a retiree who contributed to the ASRS for 20 or more years is approximately $1,720 a month, or about $20,650 per year.

Based on recent ASRS demographics, the average retiree’s benefit provides about 40 percent of what they were earning before retirement. Again, there is no provision in statute to provide for an annual cost of living adjustments to your base benefit.

Social Security

Most all ASRS members also participate in the federal Social Security plan. The average Social Security benefit is approximately $1,600 per month or about $19,200 per year. Social Security does have provisions for providing cost of living increases, predicated upon Congressional approval.

Personal Savings

A supplemental retirement savings plan is an excellent opportunity for members to save during their working careers for their post-retirement years. The ASRS offers several supplemental saving plans for employers to participate in and offer to their employees.

Additionally, anyone may set up a tax-deferred savings plan through a bank or qualified financial institution.

The ASRS encourages members to consult a trusted tax advisor or financial planner for information.

ASRS Supplemental Savings Plans

General Information

Opening a secondary but separate retirement account from your ASRS benefit is an effective way to help provide for a more secure retirement. Even if you can only contribute a small amount now, opening such a plan early in your career will help set a more solid foundation for a well-diversified retirement portfolio.

The ASRS offers several separate, voluntary plans to participating employers, who may then offer the option to their employees. Members may wish to explore these separate defined contribution plans with their employer.

All are managed by Nationwide Retirement Solutions, an independent financial services company. In each of these plans, participants have access to a high-quality, low-fee investment options that allow for individual management of accounts along with professional customer service.

The ASRS oversees the following programs:

ASRS Supplemental Salary Deferral Plan (SSDP)

The ASRS SSDP is qualified under Section 403(b) and 457 of the Internal Revenue Code. The SSDP allows eligible members to contribute tax-deferred money into an account that can be drawn upon retirement. The SSDP is especially popular among the education community. ASRS members are eligible to participate in this regardess of whether their employer has adopted the plan.

 Nationwide SSDP Plan Highlights

For additional information, contact your employer or Nationwide:  (602) 266-2733, (888) 224-1001.

azssdp.com 

ASRS Supplemental Retirement Savings Plan (SRSP)

The ASRS SRSP is qualified under Section 401(a) of the Internal Revenue Code. The SRSP allows eligible members to contribute tax-deferred money into an account that can be drawn upon retirement.  

Due to the distinctive features and benefits of the SRSP, the Internal Revenue Service requires restrictions that are unique to other tax-deferred plans. These restrictions include an irrevocable election to participate, and an irrevocable election to contribute a percentage of pay, flat dollar amount, or a scheduled contribution over time.

Nationwide SRSP Enrollment Guide Nationwide SRSP Enrollment Guide

For additional information, contact your employer or Nationwide:  (602) 266-2733, (888) 224-1001.

azsrsp.com

State Deferred Compensation Plan

State of Arizona and state university employees are eligible to participate in this separate retirement savings plan that  includes a traditional 457(b) Deferred Compensation Plan, and a 457(b) Roth DC Plan.

Plans are administered by Nationwide Retirement Solutions. For more information, contact Nationwide:  (602) 266-2733, (800) 796-9753.

State of Arizona Deferred Compensation Plan

Wondering what the difference is between your defined benefit ASRS pension and the defined contribution supplemental savings plans? Both have unique benefits and, along with Social Security, should be part of your retirement savings plan! Learn more here...

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