Your VRS pension provides a foundation for retirement. Most experts recommend replacing at least 80% of your income in retirement, which often requires savings beyond a pension and Social Security. Every step you take now helps close the gap.
Here are three strategies you can use today to grow your savings for tomorrow:
1. Hybrid Plan Members: Take Advantage of the Employer Match
One of the fastest ways to grow retirement savings is to claim money your employer already offers.
If you’re in the Hybrid Retirement Plan, you can make voluntary contributions of up to 4% of your salary and receive an employer match of up to 2.5%. Contributing less than 4% means leaving part of that match behind every pay period.
Use SmartStep to schedule automatic contribution increases on a timeline that works for your budget. You choose the increase amount and timing, and SmartStep raises your contribution automatically until you reach 4%. Log in to your DCP Account to get started.
The hybrid plan also has an auto-escalation feature that raises contributions by 0.5% every three years, but reaching the maximum this way can take more than 20 years. SmartStep empowers you to take advantage of employer-matching contributions sooner, and at a pace you choose.
2. Build Supplemental Savings Beyond Your Pension
If you’re a state employee, the Commonwealth of Virginia 457 Deferred Compensation Plan is your primary supplemental savings option through VRS. When you contribute at least $40 per pay period, you’ll receive a $20 per pay period employer match through the Virginia Cash Match Plan. Hybrid plan members must first reach the maximum voluntary contribution amount in the Hybrid 457 Plan to be eligible for this additional match in the Commonwealth of Virginia 457 Plan.
Pre-tax or after-tax (Roth) contributions are deducted from your paycheck, making it easy to save automatically. Log in to your DCP Account to enroll or adjust your contributions.
Some political subdivision and school division employers also offer the 457 plan or a similar option. Check with your human resources office about which supplemental savings options are available to you.
Consider increasing your voluntary contributions after you receive a raise.
3. Build a Safety Net That Protects Your Retirement Savings
A car repair or medical bill can force you to pull from savings you meant to keep growing. A separate emergency fund keeps your retirement savings on track when life gets in the way. Setting aside $25 or $50 per paycheck into a dedicated account — separate from your everyday spending — builds that cushion gradually.
For more assistance, log in through your myVRS account to access myVRS Financial Wellness. You’ll find budgeting tools, quizzes and courses on managing debt and retirement income.
Your Member Benefit Profile, available in myVRS each year, shows how your projected VRS and Social Security income compares to the recommended 80% replacement income target. With that information, you can see the size of the gap your personal savings need to fill.
