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Financial planners suggest that most of us will need
75% to 85% of pre-retirement income to maintain our lifestyle during
retirement. Social Security won’t provide this level of replacement
income – so, while we are still working, we must create other sources
of retirement income to supplement Social Security.
Since the employer matching benefit in the AHRP is
limited to employee contributions up to 4% of annual wages, many
participants choose to limit their savings to 4% of their wages. While
this savings rate will ensure the full employer matching benefit is
received, it may be inadequate to attain the savings needed to provide
sufficient income during retirement. Your savings rate may need to be
significantly higher.
Those who begin saving a little later in their career
are especially vulnerable to inadequate retirement savings. Not only
will these individuals save for a shorter period of time, but the
beneficial effect of compounded earnings will have fewer years to
contribute to the total balance.
A retirement planning calculator is a very useful tool
to help determine whether you are saving adequately for retirement. By
asking a series of questions, these software programs take into
account the many individual variables that will help determine the
appropriate savings rate to meet your retirement goal.
You may find a variety of retirement planning
calculators by searching the Internet. There are also calculators
located on the AHRP Web site www.AHRP.com. On the left of the AHRP
Home Page, click the button titled “Planning Guide”. On the left of
the following page click the button titled “Retirement Calculator”.
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The IRS deferral limits to 403(b) plans such as the AHRP are as
follows for 2011:
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Those under age 50 by year end - $16,500
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Those age 50 and above by year end - $22,500
2010 Employer Contributions
Following the end of each calendar year, a calculation
is made to determine the employer basic and matching contributions for
the year just ended.
If you were eligible to receive employer basic and matching benefits
for 2010, your AHRP Account Statement for the quarter ending March 31,
2011 will include these contributions.
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