“When I’m ready to retire, I want to live for a while more and not have to reside under the Pierce Elevated somewhere,” said the 53-year-old geographical information systems analyst with the Houston Emergency Center.

Casas started saving in the 457 when he joined the city March 1, 2000.

“Sometimes I wish I’d started saving a little earlier so that I could retire sooner,” he said. “But hindsight is 20/20.”

About 70 percent of city employees contribute to the 457 plan, according to Gary Wilkins, regional director for Great-West Retirement Services, which administers the plan for municipal employees. Four Great-West employee account representatives work full-time serving city employees.

The 457 plan, a defined contribution plan, allows employees to invest a pretax portion of their paycheck in a retirement savings account that has 26 investment options with varying levels of risk and reward. They can invest $15 per paycheck up to the IRS-imposed limit, currently $15,500, Wilkins said.

The Great-West plan gives employees three options for managing their accounts:

• They can manage their investments with free access to fund fact sheets, online calculators and marketing information.
• They can get free online guidance from Advised Asset Group Inc. Or, for a $25 yearly fee, they can get online advice and fund-specific choices from AAG.
• For a yearly fee of no more than .6 percent of their account balance, they can let AAG manage the account.

Tuesday mornings and Thursday afternoons, Great-West reps can be found on the 11th floor of 611 Walker. Other days, they’re at 1818 N. Memorial Way, suite 100. During business hours, they can be reached at 713-426-5588.

Planning for the future
Before saving for retirement, employees should establish a monthly budget to pay their bills and build a savings account to pay any unexpected bills, Wilkins said.

“Then, if you have any left over, invest that in your future,” he said. “Each time you get a pay raise, put a portion of that toward your retirement savings.”

The earlier you start, and the more you put in, the more you’ll get back, he said. If you want to add more to your 457 account, you can roll over your termination pay – unused vacation value and unused qualifying sick pay – when you leave city employment. That amount is also limited by the IRS’ annual contribution limits.

When you’re contemplating retiring, figure out how much money you’ll need each month, advises Davis. Then calculate as near as you can what you’ll earn from the pension, social security and any other retirement plans you’ve invested in, such as a 457 or DROP. (See Web site list.) That will help you determine if you need to work longer.

“The city puts employees in a unique and real good position with its retirement benefits and options,” Mose said. “You have that security net of the pension. Then you have the deferred compensation that will let you do what else you want to do when you’re no longer working nine to five.”

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