MAY 2024   |   IN THIS ISSUE

Introducing the CalPERS 457 Plan on-demand library

Saving for retirement could help reduce your taxes

Converting your pre-tax money to Roth within the CalPERS 457 Plan

Some do’s and don’ts to consider when investing

Are you an employment extender? Here’s what you should know.

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Employment Extenders: A (labor) force to be reckoned with

Introducing the CalPERS 457 Plan on-demand library

Did you know that the CalPERS 457 Plan offers live webinars on a variety of retirement planning and savings topics? Webinars are offered at 12 p.m. every second Wednesday and the first four Fridays of the month. If those dates and times are not convenient for your schedule, though, you now have a new option to help you learn more about saving and planning for retirement.

The CalPERS 457 Plan webinar dashboard, available at calpers457.com, features links to register for one of the live webinars currently offered during the month at noon. If you are unable to attend, you can find slides for the webinar and handout materials that are relevant to the topic. Each session has also been recorded as an on-demand video by one of the dedicated Account Managers for the CalPERS 457 Plan. The videos are available 24/7, allow you to start and stop them at any time, and even return to the slide you left off at when viewing the video again in the future. In less than 30 minutes, these videos can help improve your financial literacy and show you how the CalPERS 457 Plan integrates with concepts such as:

• Bridging the retirement gap
• The foundations of financial wellness
• Staying the course when facing market volatility
• Saving for retirement with Roth after-tax money
• What you need to know as you near and enter retirement

Visit the CalPERS 457 Plan webinar dashboard regularly for updated content and additional videos on a variety of retirement and financial planning topics. If there’s a topic you’d like to learn more about, contact your dedicated Account Manager at 888-713-8244 with your suggestion. We’re always looking for new ways to bring you the information and education you need to help you achieve a secure financial future.

Saving for retirement could help reduce your taxes

Was tax time stressful for you this year? Are you thinking about what you can do differently now to make filing your 2024 returns better? You may not immediately think of the CalPERS 457 Plan when it comes your taxes, but saving for retirement can help minimize your taxable impact while maximizing your future nest egg.

Did you get a refund in 2024? This means you overpaid on your taxes and gave the government an interest-free loan. That’s money that could have been working for you instead. What did you do with your refund this year? Before you spend it on something you may want but don’t need, use it towards something that can help improve your financial future. That could be by building up your emergency savings, paying down debt, or getting you closer to achieving a personal savings goal. To help keep more of that money working for you throughout this year and beyond, consider increasing your contributions to the CalPERS 457 Plan.

Did you owe money this year? One way to help change that next year is by reducing your taxable income. Contributing to the CalPERS 457 Plan on a pre-tax basis can help you do that as well. For every dollar you save on a pre-tax basis, your taxable income is reduced by a dollar. As a result, you’ll have less income to claim next year because, in the eyes of the IRS, you made less money this year. With the ability to save as much as $23,500 or $30,000 this year, depending on your age, maximizing your retirement savings could significantly reduce your reportable income next year.

Take the time now to review your income tax strategy for the rest of 2024 and make changes, as needed, to reduce next year’s taxable income while saving for retirement. Visit calpers457.timetap.com or call 888-713-8244 to schedule an appointment with your dedicated Account Manager to discuss your options before making a change to your retirement savings rate. You can learn a lot from your taxes, so make this the year you take what you’ve learned and pay yourself first by saving for retirement to improve your current situation and give you the potential of a whole lot more later.

¹ You are strongly urged to consult with an accountant and/or tax advisor before making your final decision to contribute to the CalPERS Roth 457 Plan. Once Roth contributions are made, they are irrevocable and cannot be reversed. While CalPERS and Voya Financial^® representatives are able to explain the options to you, they cannot tell you whether Roth contributions are appropriate for you. CalPERS and Voya^® will not provide tax or legal advice. Neither this document, Employee New Enrollment Form nor the Participant Change Authorization Form represents tax or legal advice.

Converting your pre-tax money to Roth within the CalPERS 457 Plan

As the newest feature for all participants who can contribute to the CalPERS 457 Plan, the Roth contribution option gives you more control over when your contributions, account balance, and retirement income will be subject to federal income tax. Another option for all participants in the Plan to explore, even if they can no longer contribute, is converting some or all of the pre-tax balance in the CalPERS 457 Plan to Roth. Let’s review what this could mean for you and what important factors you should consider before making a decision.

	What amounts may I convert through in-plan Roth conversion? You can convert part or all of you pre-tax plan balance, including earnings, to a designated Roth account within the CalPERS 457 Plan. Pre-tax amounts in the Plan can be converted to Roth even if they cannot otherwise be distributed to you. You can make an in-plan Roth conversion of part or all of your: • voluntary pre-tax contributions. • pre-tax rollover contributions. • earnings on your pre-tax voluntary and rollover contributions.
	How is an in-plan Roth conversion taxed? In the year in which an in-plan Roth conversion occurs, your pre-tax contributions converted and any earnings associated with those contributions are reported as taxable income for federal income tax purposes. Taxes will not be withheld when the conversion is processed. That means you may need to increase your withholding or make estimated tax payments in the year (or years) you make an in-plan Roth conversion to avoid an underpayment penalty. You are strongly urged to consult with an accountant and/or tax advisor regarding the federal and, if applicable, state and local income tax implications before making your final decision to request a conversion.
	If I elect an in-plan Roth conversion, can I later unwind it? No. This transaction has income tax implications once processed, is irrevocable and cannot be reversed. Therefore, you may recharacterize pre-tax money to Roth but you may not recharacterize any part of your designated Roth account back to pre-tax.

Based on your personal situation, there may be a number of reasons why an in-plan Roth conversion does or does not make sense for you. In addition to you meeting with a tax professional, your dedicated Account Manager can discuss the CalPERS 457 Plan Roth contribution option to help make sure you can make an informed decision. Schedule an appointment to review and discuss Roth as part of your retirement saving strategy by going to calpers457.timetap.com or calling 888-713-8244.

You are strongly urged to consult with an accountant and/or tax advisor before completing the CalPERS 457 Plan Roth In-Plan Conversion Form. An in-plan Roth conversion involves complex income tax issues and, once it is processed, it is irrevocable and cannot be reversed. While CalPERS and Voya Financial^® representatives are able to explain the options to you, they cannot tell you whether an in-plan Roth conversion is appropriate for you. CalPERS and Voya^® will not provide tax or legal advice. Neither this document nor the Roth In-Plan Roth Conversion Form represents tax or legal advice.

Some do’s and don’ts to consider when investing

When market performance doesn’t meet your expectations, it’s normal to feel stressed. Before you get too concerned, remember changes in the market are normal. Here are a few key things to consider to help you feel confident and remain committed to your long-term goals.

	Accept that market volatility is normal. The markets are designed to move, which history has shown again and again. A few things that can impact changes in the market are supply and demand, lower than expected earnings, raising interest rates and a “bear market.” No matter what impact that is having on your accounts, it’s only a matter of time before it passes.
	Try to time the market. Experts say that predicting the market is like predicting the weather — you never know what exactly will happen. Without knowing the exact moment to buy or sell, it would be easy to miss the market. That miss could be costly.
	Review your investments at least once a year. In the CalPERS 457 Plan, the CalPERS Target Retirement Date Funds are the “help-me-do-it” investment option that are professionally managed for you to remain diversified but still evolve over time. Let’s say you’re invested in the CalPERS Target Retirement 2040 Fund and your plans to retire are starting to look like it may be 2045 instead. You may want to consider realigning your investments with your new planned retirement year. If you’re invested among the core funds in the Plan, the “do-it-myself” option, your personal situation will dictate how much change you need to make to your asset allocation since it’s yours to actively manage. No matter how you’re invested, though, make sure you review your account regularly.
	Stop saving for retirement! When you contribute a consistent amount each pay period regardless of what the market is doing, you buy more shares over the long run than if you occasionally invested large sums at all once. This takes some of the emotion out of investing since you don’t have to worry about what your investments are doing at any given time and whether you should invest more or less. Let the law of averages work to your advantage.

To learn more about investing in the CalPERS 457 Plan, visit calpers457.com and go to the What kind of investor are you? tab. There, you can learn more about each of the investments in the Plan and how they’ve performed over the last month and quarter. Then log into your account and go to Investments & Research to see how your account is invested and performing on the road to retirement. Make a plan this quarter to invest some of your time to review your CalPERS 457 Plan account and contact your dedicated Account Manager at 888-713-8244 with any questions about your investment allocation or performance.

Are you an employment extender? Here’s what you should know.

Ask yourself this question: Are you working or planning to work past a traditional retirement age? If you answered “yes,” then you are an employment extender. You have you own motivations, financial considerations, and personal concerns that keep you working and delaying retirement. To understand more about what that may mean for you, consider which one of these types of employment extenders you are.

Easterseals and Voya Financial^®, the contracted recordkeeper for the CalPERS 457 Plan, joined forces in 2022 to explore the mindset and needs of employment extenders. Read their research paper to learn more about how many employment extenders are working longer because they want to, what employment extenders list as their main goals in retirement, how the economy is changing calculations for retirement, retirement considerations for employment extenders that are not top of mind but maybe should be, and more.

When you’re ready to make a plan for your retirement, we want to help. Schedule an appointment with your dedicated Account Manager to review and discuss your retirement saving strategy by going to calpers457.timetap.com or calling 888-713-8244.

Research commissioned by Voya Cares in collaboration with Easterseals and conducted by Edge Research in August 2022.

This information is provided by Voya Cares for your education only. Neither Voya nor its representatives offer tax or legal advice. Please consult your tax or legal advisor before making a tax-related investment/insurance decision.

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Information from registered Plan Service Representatives is for educational purposes only and is not legal, tax or investment advice. Local Plan Service Representatives are registered representatives of Voya Financial Advisors, Inc., member SIPC. Plan administration services provided by Voya Institutional Plan Services, LLC.