Contributing to the Max
"I'm contributing 3% toward my retirement plan. I didn't think I could contribute more than that. What exactly does it mean to contribute the maximum and how can I do it?"
We hear this a lot in the OFSB. Read on...
Yes, it's true. In the Defined Contribution Retirement Plan (DCRP) the most you can contribute is 3% of your pay in order to receive the maximum match (10% of your pay) from the University. In this plan - in which all new eligible employees are automatically enrolled - you could also contribute nothing and receive a 5% contribution from Georgetown.
However, you can still choose to save additional money for retirement in the Voluntary Contribution Retirement Plan.
How much can you save? In 2017, the IRS allows participants under the age of 50 to contribute up to $18,000 throughout the year. Participants who are 50 and older are permitted to contribute up to $24,000 throughout the year.
It is important to note that these limits apply to the combined amount you contribute to both the Voluntary Contribution Retirement Plan and the Defined Contribution Retirement Plan (as well as contributions made through other employers). The maximums apply only to employee contributions, so the contributions Georgetown makes to the Defined Contribution Plan (or GURP) do not count for purposes of calculating this limitation.
The following is an overview of the retirement saving vehicles offered to faculty and staff of Georgetown University. Click on the title of a plan to learn more.
This is a retirement plan where contributions are made by both the employee and the employer. The fund's value is based on the amount of contributions made and the return on investment.
Who is eligible for the Defined Contribution Plan?
All faculty, staff and AAPs working at least 20 hours or more per week. Fellows are not eligible to participate in this plan.
A company-sponsored qualified retirement plan for employees. Contributions and earnings in a 403(b) plan are not subject to federal and most state income taxes until the funds are withdrawn. This plan allows you to save money on a pretax basis, decide how much you contribute (up to the maximum allowed by the government), and choose where you will invest your contributions (from a list of funds provided by your plan sponsor).
Who’s eligible for the Voluntary Contribution Plan?
All employees receiving a Georgetown University paycheck are eligible to participate in this plan.
GURP is a defined benefit plan that provides participants a specific monthly benefit at retirement. Monthly benefits are calculated through a formula that considers both participants salary and service. A participant is not required to make contributions or investment decisions.
Who’s Eligible for GURP?
This plan is currently closed to new participants.
The 457(b) Plan offers an opportunity to highly compensated employees to double the tax-deferred contributions that can be set aside annually for retirement.
Who’s eligible for the 457(b) Deferred Compensation Plan? You must have a base salary that is equal to or exceeds $200,000 and be making the maximum deferrals allowed by the IRS to the Defined Contribution Retirement Plan (DCRP) and the Voluntary Contribution Retirement Plan (VCRP).