Sure, you’re out of school and on your own. Maybe you’re even making pretty good money. It’s tempting to spend it when you’re young and free. But others have bravely gone before us, and their wisdom whispers a little secret in our ears, “Save as much as you can…now.” Continue reading...
Save Now, and High-five Your Future Self.
Sure, you’re out of school and on your own. Maybe you’re even making pretty good money. It’s tempting to spend it when you’re young and free. But others have bravely gone before us, and their wisdom whispers a little secret in our ears, “Save as much as you can…now.”
You’re in Your Prime
Look at the difference starting to save at age 30 can make compared to age 50. And this is just $50 a month, or $1.65 a day! You can start with even less. But starting is what’s important.
How Much is Enough?
It’s hard to know an exact number, especially early in your career. But you should save as much as you can and remember that KPERS and Social Security won’t be enough when it’s time to retire.
How Do I Save?
Debt Talk. Crush or Be Crushed.
Have you been giving your credit cards a real workout? Has all that swiping given you “tennis elbow” and the threat of crushing debt? Don’t give up! Three simple steps to crush debt:
- Stop using credit cards, at least until you have debt under control.
- Make a payoff plan. Focus first on debt with the highest interest rate.
- Consider a cash budget. Handing over cash is harder than a swipe or a click.
Paying Off Student Loans vs. Saving for Retirement
Student loans looming over your head like a last-minute term paper? Should you pay off the student loans or save for retirement, or both? Start by looking at your student loan interest rates.
|Over 6%||5%-6%||Under 5%|
Consider making more than the minimum payment, cutting the time you’re paying the high rate. Leave a little for retirement savings. Remember, you’re in your savings prime!
Think about splitting it. Let’s say you have $100 left after a minimum loan payment and minimum retirement contribution. Put $50 toward the loan and $50 in savings.
With a low rate, it makes more sense to make a minimum payment and put more in retirement savings to take advantage of your prime savings age.
Credit Checkup Checklist
If you establish and keep good credit now, you could save big money by qualifying for low loan rates down the road.
- Establish credit as early as you can responsibly manage it.
- Pay bills on time. Even tiny unpaid bills can do big damage.
- Keep a low credit card balance, and pay it off every month.
- Spend less than you earn. Budgets really help here.
- Don’t get too many credit cards. One or two is about right.
- Check your credit report and rating once a year.
KPERS and You. The Big Picture.
Your KPERS membership is automatic when you’re hired. And membership starts on your first day. When the time comes, KPERS pays out retirement benefits, but where does that money come from? There are 3 income sources that provide your benefit: employee contributions, employer contributions, and investments.
1. You Put Money In (Employee Contributions)
The amount you put in is set by the Legislature. Your employer takes it out of each paycheck and sends it to KPERS.
Your Contribution Rate ( % of your pretax pay)
KPERS 1, KPERS 2, KPERS 3
2. Your Employer Kicks in, Too (Employer Contributions)
Your rate pretty much stays the same. But employer rates often change year-to-year, based on KPERS’ financial health. Their contributions don’t go to your account. They’re used to fund the System.
3. KPERS Invests the Money
KPERS is guided by the “fiduciary standard," which means we put members’ interest first. We take care of the money coming in, and we grow that money to help provide benefits to members when the time comes. Over the years, income from investments have paid for much of the benefits.
For more about how KPERS works, check out your membership guide.
How We Add it Up
Final Average Salary x Statutory Multiplier x Years of Service = Yearly Benefit ÷ 12 = Monthly Benefit
To calculate KPERS 3 benefits, we use your account balance, retirement credit value and other factors.
Easy Access to Your KPERS Account
That blue button, near the top of the screen. That’s it. It’ll take you to your account. Getting set up is fast.
With Your Online Account You Can:
- View account details.
- View your beneficiaries.
- Download annual statements.
- Estimate your retirement benefit.
Other Benefits While You Work“I get KPERS benefits while I’m still working?” Yes. Go to the active member home page and select your membership group for more about “the other” KPERS benefits.
- Surviving Spouse
- Life Insurance (basic & optional)
For a quick overview watch this KPERS 3 welcome video:
Budgets. Not as Boring as You Think.
A budget is simply putting money earned and money spent into categories. After that, you can easily track and plan your spending. A budget isn’t scary. It makes managing money easier.
Get started by writing down the money coming in and money going out. All of it. Even the small things. Then put them into categories, like “Dining Out.” You’ll start to see how much you spend in each category and where you can cut back.
If you haven’t already, give budgeting a 3-month try. See how much you save!
Fight Impulse Spending With a Cash Budget
People tend to spend more with credit or debit cards than with cash. Cards are more convenient, and you don’t often see immediate effects.
Try a cash budget for things like groceries, dining out, golf, etc. Just label envelopes with your categories. Each week, put a budgeted amount of cash in each envelope. When the cash is gone, you’re done spending until next week.
Although pencil and paper are ok, there are other tools out there to help.
Some choose to use a spreadsheet program, like Microsoft® Excel® to set up and track their spending. It even has budget templates ready to go.
Or you might want a personal finance and budgeting app to put in your toolbox. They often have more features than a spreadsheet, like connecting to your bank accounts.