Page 4 - Columbia University Retirement Brochure - Officers

Saving even a little for your retirement can really add up
Starting or increasing your retirement plan contributions by 1% may help you reach your
long-term goals. Take a look at the following hypothetical example of someone who earns
$60,000 and invests 1% of their salary in their retirement plan.

$25,000

$20,000 After 20 years, investing just 1%
can add up to more than $25,000!

$15,000

$10,000

$5,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

This hypothetical situation assumes an annual salary of $60,000, a contribution rate of 1% and an annual salary increase of 1%. The example also assumes a 6% annual
rate of return on investment. It does not represent expenses or taxes, which would reduce performance. Total returns and the principal value of the accounts will
fluctuate, and yields may vary. This chart cannot predict or project investment performance.

Contributions
If you think you cannot afford to contribute to your $1 could grow to much more
retirement plan, consider this: Increasing your by retirement, but it depends
contributions may help lower your overall taxable on what age you contribute it.
income.
Here’s how much your dollar
Roth 403(b) Contributions could be worth at age 55:
Roth 403(b) contributions are made on an after-tax $5.84
basis from your take-home pay and are immediately $4.80
vested. Contributions to the VRSP can be Roth after- $3.95
tax, pre-tax or a combination of both; the combined $3.24 $2.67 $2.19
amount is subject to the annual IRS contribution $1.80 1.48
limits. As long as the Roth contributions are left in the
account for five years, you do not have to pay taxes
on the earnings. You can roll-over Roth money from 20 25 30 35 40 45 50 55
your former employer’s plan into your Roth account Age when you contribute $1
within the VRSP. The five-year clock for Roth rollovers What you invest What you earn
starts from the year the first contribution was made at
the prior employer. This hypothetical situation assumes an annual 4% return after
inflation. This illustration doesn’t represent any particular
investment.

For more information, go to humanresources.columbia.edu/retirement