Find ways to build your retirement savings with the ‘Saver’s Credit’, University retirement contribution match

July may seem like a strange time to start talking about the upcoming tax season. However, remember the old saying, “It’s never too early to begin saving for retirement.” This could not be more true when it comes to maximizing savings for your future.

Now is a great time to remember to get a jump start and maximize savings toward retirement for the 2022 tax year, by considering beginning or increasing voluntary retirement contributions through the 403(b) and/or 457 voluntary retirement plans.

During the summer months, it may feel as if we are a world away from that time of year, but the truth is, planning and saving from your paycheck now can only help you save more later.

This is where the “Saver’s Credit” may also help some looking for advantages to save towards retirement. To encourage individuals with low and modest incomes to set savings aside for retirement, the IRS offers the “Retirement Savings Contributions Credit,” commonly referred to as the “Saver’s Credit.”

The Saver’s Credit is a tax credit available to taxpayers with an AGI (Adjusted Gross Income) of $34,000 ($68,000 if married filling jointly) or less for 2022 who contribute to certain retirement accounts during the year, including contributions made to an employer-provided plan at work, such as a 403(b) or 457 plan, 401(k) or on your own through an IRA. A few additional requirements apply to be eligible for the credit, you have to be 18 years or older, not a full-time student and you can’t be claimed as a dependent on anyone else’s tax return.

Up to $2,000 ($4,000 if married filing jointly) in voluntary retirement contributions can count toward the credit. Depending on filing status and income level, the credit pays between 10 and 50 percent. This tax credit can be claimed in addition to receiving the benefit of contributing on a pre-tax basis to a qualified retirement account.

An additional way to maximize savings for employees participating in the Purdue Matching Retirement and Savings (PMRS) program, is to ensure they are contributing a minimum of four percent to the 403(b) Voluntary plan to receive the full four percent University matching contribution into the 403(b) Base plan.

Employees participating in the PMRS program contributing less than four percent are essentially leaving money for their retirement on the table. With merit increases taking effect in July, now is a great time to consider starting or increasing 403(b) Voluntary contributions to ensure the full University matching contribution is received.

Saving as early as possible and maximizing your savings opportunities along the way is key to a successful retirement nest egg for your future.

More information about the Saver’s Credit, including the 2022 income limits and credit amounts, can be found on the IRS website. Fidelity representatives can answer general questions and provide assistance with the Saver’s Credit, retirement planning, voluntary retirement contribution setup, and Purdue’s retirement program, in general.

Employees are able to log into their Fidelity NetBenefits account at any time to view and update voluntary retirement contributions here.

Fidelity representatives are available to assist you via phone and virtually. To make a one-on-one in-person, phone, or virtual appointment, call 800-642-7131 or schedule online. For general questions, call 800-343-0860.