Retirement

Voluntary Enrollment:

DEFERRED COMPENSATION

Put even more money toward retirement with the 457 deferred compensation plan (deferred comp). It’s designed to be a supplement to your pension and is an additional way to invest long-term directly from your pay. You’re in control of how to use deferred comp to help achieve your goals. Roth 457 Accounts are also available.

TAX-DEFERRED 457 ACCOUNT

Save money now by postponing taxes until you make a withdrawal. With the tax-deferred 457 plan, your money goes into your account before taxes come out of your check. When you make withdrawals from the account in the future, you pay the income taxes then.

EXAMPLE: Let’s say you pay around 25% in income taxes. Because you contribute to your deferred comp plan pre-tax, putting $100 in your account only costs you $75 from your take-home pay.

ROTH 457 ACCOUNT

If you like the idea of having your taxes out of the way in retirement, then a Roth 457 account can be a great choice. When you contribute to a Roth 457, you pay taxes on the portion of your salary that goes into the plan; however, withdrawals of contributions and earnings can be tax free during retirement if certain conditions are met. If you wish, you can even split your contributions between traditional pre-tax contributions and Roth after-tax contributions.

GET STARTED

Both 457 plan types are available to Harris County employees through one of our deferred compensation vendors (Nationwide, Valic or Voya). Contact any of them for guidance and additional information. If you decide to participate, log in to your STARS Employee Self-Service portal and click on Payroll >> Voluntary Deductions. The minimum deduction is $25 per month or $12.50 per bi-weekly paycheck. An account must be set up with one of the vendors before you complete the enrollment in STARS.