DTE employees are the fuel that keeps Michigan running. So when you’re sprinting toward retirement without certainty on how much you need to save, who’s helping you catch up?
Planning for retirement is a complex process, but DTE Energy lightens the load with employee benefits that could help you move closer to your retirement goals. Whether you started saving later or had circumstances that interrupted your plans to save, there are still strategies you can employ to catch up for retirement.
1. Maximize the Match
If you are not taking full advantage of 401(k) matching, you are leaving free money on the table. DTE Energy will contribute to your retirement as long as you are contributing. Most DTE employees typically receive a 6% match if they contribute at least 8% of their income to their 401(k) plan. This is an excellent DTE employee benefit that could help you speed up your savings process as long as you’re contributing the required amount.
To make the most of this benefit, aim to contribute enough to your retirement account to receive the full employer match—it’s like receiving an instant return on your investment and can significantly boost your savings, leading to a more comfortable retirement.
2. Utilize Catch-up Contributions
Once you reach a certain age, the IRS allows you to make “catch-up” contributions to your retirement plan. This gives you the opportunity to make up for lost time and add more to your retirement nest egg. DTE employees aged 50 and over are eligible to make annual catch-up contributions to their 401(k) accounts.
In 2023, you’re allowed to save an additional $7,500 per year on top of your regular contribution limit. If you were to max out your 401(k) contribution limit of $22,500 and add a catch-up contribution of $7,500, you’d have a total of $30,000 saved in one year!
Note: The IRS has delayed the implementation of a new rule regarding catch-up contributions until 2026. The rule states that individuals who earned over $145K in Social Security wages in the previous year must make any catch-up contributions in their workplace retirement plans (like a 401(k), 403(b), and 457(b)) as an after-tax Roth contributions, and will not have the option to make them as pre-tax contributions.
3. Invest in Retirement Accounts Outside of Your 401(k)
Once you’ve maxed out your 401(k), it’s time to explore other options that allow you to save more and potentially give you more tax advantages. By diversifying your retirement savings, you’ll expand your benefit options and reduce risk, while enhancing your financial position.
Some options to consider adding to your portfolio include IRAs, Health Savings Accounts (HSAs), taxable brokerage accounts, and annuities. IRAs, such as traditional and Roth accounts, offer tax advantages and diverse investment options. HSAs provide triple tax benefits and the flexibility to save for medical expenses while potentially serving as a tax-efficient supplement to your retirement income. Taxable brokerage accounts offer liquidity and a wide range of investment choices, allowing you to tailor your portfolio to your financial goals. Annuities afford you guaranteed payouts, allowing for a steady stream of income during retirement.
4. Partner With a Financial Advisor to Create a Plan
Have you thought about the kind of life you want to live in retirement? Would you want to stay in your current home or downsize? Do you plan on taking up hobbies or traveling?
The lifestyle you want might take some planning and saving, but it’s likely attainable. To make a solid plan for your retirement, you’ll need to have a specific amount in mind and compare that to what you currently have plus what you are saving. If the budget for your retirement lifestyle isn’t firmly aligned with your savings amounts, it’s time to call in a trusted financial advisor.
By working with a professional who’s familiar with these situations, you’ll co-create a strategy that could put you on the path to a comfortable retirement through optimized savings plans, investments, and retirement planning.
As your trusted financial advisor, Center for Wealth Management can take retirement planning off your plate. We take time to hear your concerns, goals, and questions to develop a customized retirement plan that can help put you on the path to a comfortable retirement. If you’re ready to gain some clarity around your retirement plan, call (248) 220-4321 or email firstname.lastname@example.org. You can also schedule a meeting by visiting www.calendly.com/cwmrob/initial.
Robert Moore is senior partner, financial planner, investment advisor, and co-owner of Center for Wealth Management, an independent, fee-based wealth management company based in Troy, MI. With over 20 years of experience, Rob provides customized advice and solutions that are in the clients’ best interest. He strives to always go above and beyond his clients’ expectations, helping them retire with more security than they had before, and invest their time and energy in what’s most important to them. Rob specializes in working with DTE Energy employees, helping them maximize their benefits so they can reduce taxes, prepare for retirement, and protect their families through a comprehensive planning process. Rob graduated from Michigan State University and holds the CERTIFIED FINANCIAL PLANNER™ and Chartered Financial Consultant® (ChFC®) certifications.
Rob is known as a diehard family man who enjoys spending time with his beautiful wife, Jill, his daughter, Brookelyn, and his son, Brayden. When he’s not working, you can find him playing basketball once a week, squeezing in a round of golf, and watching college football and basketball with friends and family. He is passionate about enriching the lives of others through his church involvement and service at a community addiction program. Learn more about Rob by connecting with him on LinkedIn.