Stanford Benefits
How to Decide Your Retirement Savings Contribution Amount
Stanford Contributory Retirement Plan (SCRP)
To make the most of your retirement savings opportunity, here is some information on the annual maximum contribution and how to reach it.
Know the Contribution Limits
Each calendar year, federal tax laws limit employee before-tax contributions to retirement plans. There are two limits depending on your age. For 2015, employees under age 50 may contribute up to $18,000; up to $24,000 if you will be age 50 or over by December 31, 2015. These limits apply to all before-tax contributions you make during the 2015 calendar year whether in the Contributory Retirement Account (CRA) and/or Tax-Deferred Account (TDA).
Get Help Deciding
Need help deciding on how much to contribute? To get free investment advice, you can:
- Use the Before-Tax Calculator on the Stanford Benefits Web site
- Use the financial planning tools on the Fidelity and TIAA-CREF Web sites, or
- Schedule an individual counseling session with a financial representative by calling:
Fidelity: (800) 642-7131
Vanguard: (800) 662-0106 ext. 14500
TIAA-CREF: (866) 843-5640
How to Receive a Stanford Match
When you contribute to the CRA, Stanford will match your contributions according to this chart.
| When you contribute | Stanford’s Matching Contribution |
|---|---|
| 1% | 1.5% |
| 2% | 3% |
| 3% | 4% |
| 4% | 5% |
* This chart does not apply to employees designated as postdoctoral fellow or researcher, temporary or casual
Transition from TDA to CRA Without Losing Any Match
If you become eligible to contribute to the CRA mid-year, remember to enroll and begin making Matchable Contributions to CRA. That way you can start receiving the university’s Matching contribution as soon as possible. To receive the maximum Match, you must contribute 4% of before-tax and/or after-tax earnings to your CRA account. You can continue to contribute Non-Matchable before-tax contributions to Tax-Deferred Account (TDA). Remember, contributions that go into TDA are not eligible for the Match.
If you defer too much of your before-tax contributions to TDA and reach the before-tax contribution limits before deferring at least 4% to CRA, you can contribute on an after-tax basis so you can receive the maximum matching contribution available from Stanford.
Maximize Your Before‐Tax Contributions
Before we show you how to reach your before-tax maximum, keep in mind these basic rules for 2015 that apply to both the TDA and CRA accounts in the SCRP.
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Eligible earnings include your base salary, paid leave, and any summer supplemental pay you receive after becoming eligible for the plan, up to $265,000
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If you are under age 50, you can make $18,000 in before-tax contributions to the CRA or TDA
- If you are age 50 by December 31, 2015, you can make an additional $6,000 in before-tax contributions to the CRA and TDA. (You may contribute a maximum of $24,000 to CRA and TDA combined.)
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If you reach your maximum contribution during the year, you can continue to save with after- tax contributions. If you do, remember you may want to discontinue your after-tax contributions before January of the following year when your before-tax contributions automatically re-start.
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When determining your before-tax contribution limits apply to all before-tax contributions you make during the calendar year, be sure to take into consideration before-tax contributions made to a prior employer’s plan within the same calendar year
Example – Employee A
Employee A wants to maximize before-tax contributions and avoid making after-tax contributions. Here’s how it’s done:
| 2015 eligible earnings | $72,000 |
| Age at December 31, 2015 | 50 |
| 2013 maximum before-tax contribution | $24,000 ($18,000 + $6,000 for age 50 by 12/31) |
| Deduction percentage | $24,000 is approximately 33% of eligible earnings |
Employee A elects to contribute 33% each pay period throughout the year in order to contribute the maximum allowed.
When Employee A’s contributions reach the $24,000 limit, they will automatically stop.
Maximize your Before‐ and After‐Tax Contributions
The total contribution limit for 2015 is $53,000 if you’re under age 50 or $59,000 if you’re 50 by December 31, 2015. This limit includes all TDA and CRA contributions of the SCRP (employee before-tax, employee after-tax, university Match and Basic).
Example – Employee B
Employee B is a second wage earner in the family and under 50. The family can live comfortably on one salary, so they decide to save as much as possible of Employee B’s salary for retirement.
Employee B will have $70,000 in eligible earnings in 2015 and wishes to maximize contributions.
Employee B is eligible to receive the maximum university Match and Basic contribution which is 10% of his salary, or $7,000. Employee B also knows the Plan allows up to $18,000 in employee contributions on a before-tax basis. Since the total contribution limit is $53,000 Employee B is also allowed to contribute an additional $28,000 on an after-tax basis. As a result, in January Employee B elects to contribute 26% to the CRA of the SCRP on a before-tax basis and 40% on an after-tax basis. Since percentages must be designated in whole amounts, the percentage rates are rounded up because payroll limitations will automatically stop contributions at the maximum amount.
To Enroll or Ask Questions
To enroll for TDA and CRA contributions visit the Stanford Retirement Manager. You can also enroll by phone at (888)793-8733.
After you determine how much you wish to contribute on a before-tax basis for the year, remember that you can adjust the amount any time. You can keep track of your year-to-date before-tax contributions by looking at your pay statement.
For details on the plans, your investment options and how to enroll, refer to the in the Resource Library.
