Features of the Massachusetts Save Money and Retire Tomorrow, or SMART, retirement plan include opportunities to save and invest pretaxed salary through an IRS 457 deferred compensation plan, according to its website. In addition to saving money, the plan offers investment options to increase income, which becomes available at retirement.Continue Reading
As an IRS section 457 plan, state government employees are eligible to supplement pension and Social Security benefits with salary deferrals, explains SMART. The minimum contribution is $10 per pay period or 1 percent of gross income, up to $18,000. As of January 2015, an employee 50 years or older may contribute up to $24,000. The maximum contribution is 100 percent of compensation.
Another feature of the plan is that employees can increase, decrease, or stop and restart salary deductions at any time through the online portal, notes SMART. Withdrawal is allowed at 70 1/2 years of age or at the time employment ends. The IRS allows withdrawals for unforeseeable emergencies, as defined by the agency. At death, beneficiaries receive SMART plan benefits.
The Massachusetts state treasurer's office oversees the plan. However, there are various ways to invest savings, as stated by SMART. The SMARTPath retirement fund includes choices such as Pimco total return fund, Fidelity growth company fund and Vanguard dividend growth fund. Employees can receive advice from Reality Investing Advisory Services or build their own portfolios with a TD Ameritrade self-directed brokerage account.Learn more about Financial Planning