How to Make a Nonprofit Retirement Plan

It’s tax time! Around this time of year, we not only think about doing our taxes but also about our overall financial health working in the nonprofit sector. This week, we’re sharing financial resources—as well asking experts in budgeting, student loans, and more—how to make a nonprofit retirement plan when your budget is tight.

Retirement is a tough topic in the nonprofit sector (and for most workers across sectors). While many resources focus on how employers can get better at offering competitive benefits, more conversation is needed about how employees can prepare for the future when their salaries are on the lower side.

Below are a few articles and resources for making a nonprofit retirement plan that works for you. As with all personal finance decisions, what you do depends on your unique circumstances (and we here at Idealist Career Advice are not financial experts!). Have something to add? Include it in the comments.

Making a personal nonprofit retirement plan

If you’ve never given thought to how you might retire or where you should start, check out these resources.

• AARP Ready for Retirement Center is an interactive site with articles, financial tools, and more.
• Some retirement experts offer a handy guide for making sure you're saving enough of your paycheck for retirement: Generally, you'll want to have 7.5x your paycheck saved up by the time you're 65. Keep in mind that your salary should be growing over time, allowing the number you may have saved now to compound over time. If you're worried that you've hit your salary cap, try plugging some numbers into Idealist's Nonprofit Salary Explorer to discover what other professionals are making in the sector—and whether you need to change your career path.
• 403b or 401k? What do these numbers mean? When looking over your organization's benefits, make sure you have a firm grasp on the differences between these common nonprofit retirement plans. Not sure if you do? Here's a useful guide to decode those confusing numbers to maximize your retirement planning.

What should you do if you have no money to retire?

If you are getting close to retirement age (or are already there) and are concerned that you don’t have enough to retire, you have some options.

• Nearing 50 and have no savings? There are still some things you can do to ensure you're taken care of when you decide to leave the social-impact sector for good. Here are some actionable tips you can check out that will help you start putting money away and take advantage of today's money market (note: consider bonds over stocks for more attractive gains).
• The Social Security Administration has a tool to help you calculate how much of your Social Security benefits you’ll collect monthly so you can plan accordingly.
• Speaking of Social Security, you may want to consider working while retired to get some extra cash—here's the lowdown on what that may mean for your benefits.
• If you were unemployed for a while, the experts at Retirement Manager offer some advice on how to rebuild your retirement fund.

The student loan vs. retirement debate

As student loans get bigger and as more adults over 50 take out loans to go back to school or finish school, the effect of student loans on retirement is increasingly becoming an issue. Here are a few tips to consider if you’re wrestling with student loans:

• The first step is knowing your repayment options. If you're working in the social-impact sector, the Public Service Loan Forgiveness (PSLF) program can help your reach student debt forgiveness faster.
• Jade Warshaw of Ramsey Solutions recommends that you pay off high-interest debt first, which may or may not include student loan debt. When you do tackle your student loans, make sure to tackle those with the highest interest first.
• Over at Money Under 30, David E. Weliver suggests some tips for making your nonprofit retirement plan work for you; that is, “save a little bit of an emergency fund, pay off student loans great than 7 percent, then focus on retirement and other savings goals while making minimum payments on the other student loans.”

At Money With Katie, Katie Gatti argues that the effects of compounding can be huge, so consider putting your extra dough in some money market accounts in addition to paying off your current debt. If you work at a company with 401(k) matching, you’ve got an even better reason to take advantage of the match and stash some money away.