With the approach of the new year, it’s a great time to evaluate your Deferred Compensation Program contributions. Are you saving enough to meet your retirement goals?
The IRS has increased the amount you can defer into DCP. In 2020, you can contribute up to the following maximum amounts:
- $19,500 annually if you are under age 50
- $26,000 annually if you turn 50 or older in 2020
Even if you don’t contribute to the maximum, it’s a good idea to check your deferral amounts and consider saving a bit more in 2020.
Depending on your employer’s payroll, it can take up to 30 days for your account changes to go into effect. So for the new year, you might want to start your changes now! Change your contributions through your online account at www.drs.wa.gov/login or call the DCP record keeper for assistance at 888-327-5596.
Remember, DCP is a special type of savings program that helps you invest for the secure and stable retirement you want to achieve. Unlike traditional savings accounts, DCP is tax-deferred — it lowers your taxable income while you are working and it delays payments of income taxes on your investments until you withdraw your funds. DCP is a great way to save!
To learn more, visit the DCP website at www.drs.wa.gov/dcp.