Invest Now, Thank Yourself Later

One of the most important decisions you can make is to get started saving for your future.

While you may have a lot of competing financial priorities—paying off debt, saving for a first home, or starting a business or a family—it pays to make room in your budget for saving now rather than later.

Where to Start

If you’ve never enrolled in an employer-sponsored retirement savings plan before, you may want to consider starting with the UC 403(b) Plan and/or the UC 457(b) Plan. As a UC employee, you can contribute to both plans as long as you are not a student working fewer than 20 hours per week. (In 2018 you can contribute up to $18,500 to each plan; and up to $24,500 to each plan if you are age 50 or older. Contribution limits are set by the federal government and can change each year.)

You pay no taxes on your contributions to these plans until you withdraw them. This means that regardless of which plan you decide to contribute to, you put more of your money to work for you. The monies in your 403(b) and/or your 457(b) Plans may increase as a result of your contributions, contributions from UC, and potential investment return. On top of that, any money you defer into your plans on a pretax basis lowers your taxable income in the eyes of the IRS.

403(b) or 457(b)?

The key difference between the two plans is how and when you can access your money. It may boil down to when you expect to leave UC and the flexibility you need in accessing your money. Both plans allow you to take a withdrawal while working for UC (called an “in-service” withdrawal), but the 403(b) allows you to take an in-service withdrawal at age 59½, while that age is raised to 70½ for the 457(b). (Both plans allow you to take in-service withdrawals in the case of a financial hardship or unforeseeable emergencies.)

So if you expect to work for UC for a long time but think you might need access to your money earlier than age 70½, directing at least a portion of your contributions to the 403(b) Plan may make sense.

Not Sure Where to Invest?

The UC Pathway Funds let you make a single fund choice based on the year you expect to begin withdrawing money from the plan. The funds provide asset re-allocation based on the fund’s target date, growing more conservative as they near that target retirement date. The point is, your money is being carefully managed and you don’t have to do anything about it.

Note: The investment risks of each target date Pathway Fund change over time as the Fund’s asset allocation changes. Assets held in the Pathway Funds are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad and may be subject to risks associated with investing in high yield, small cap and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.

How to Enroll

Register with NetBenefits and the system will guide you step-by-step through the short enrollment process. If you prefer to talk with a representative, call 1-866-682-7787.


Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

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