Saving for retirement is certainly a financial priority for everyone. For Nevada state employees, it’s comforting to know that your retirement savings are automatic. Once you start working for the state, you’ll begin making contributions to your pension through the Nevada retirement systems. Most employees are covered by the Public Employees’ Retirement System of Nevada (PERS). Below, we outline the different retirement systems and each one’s eligible employees. And if you want personalized help navigating the Nevada retirement system, check out SmartAsset’s free financial advisor matching tool to linked up with an expert in your area.
Types of Retirement Systems in Nevada
All Nevada state employees are covered by a state retirement system to help fund each employee’s retirement. Most employees receive coverage from the general Public Employees’ Retirement System of Nevada (PERS). Legislators who do not have any PERS service receive coverage from the Legislators’ Retirement System (LRS). There is also the Judicial Retirement System, or JRS, that covers supreme court justices and district court judges. Justices of the peace and municipal judges may participate in JRS, as well.
Pennsylvania Retirement Systems
|Plan Title||Eligible Employees|
|Public Employees’ Retirement System (PERS)||– All state employees who are not legislators or judges.|
|Legislators’ Retirement System (LRS)||– All state legislators without prior PERS service.|
|Judicial Retirement System (JRS)||– Supreme court justices|
– District court judges
– Justices of the peace and municipal judges may also participate
Overview of Nevada’s Main Retirement Systems
Public Employees’ Retirement System (PERS) – PERS is for all Nevada state employees who are not legislators or judicial employees. It is a tax-qualified defined benefit plan that was designed not only to make government employment attractive to potential employees, but also to provide a stream of income for those employees in disability or retirement.
Under PERS, you make your contributions either under ERPaid or an Employee/Employer Contribution Plan. ERPaid serves school teachers and employees of large, local government employers. This also applies to those who work for the State of Nevada or if you elected to participate under ERPaid. Typically, employees contribute 28% to ERPaid accounts. Additionally, employees of the State of Nevada and many of the smaller employers have the option to contribute under the Employee/Employer Contribution Plan. These plans typically gain 14.50% in contributions.
Legislators’ Retirement System (LRS) – The Legislature by the Public Employees’ Retirement Board is the entity that requests the administration of the LRS. This retirement system serves Nevada state legislators who do not have prior PERS service. As a legislator, you’ll contribute 15% of your gross compensation to the LRS.
LRS service and contributions begin on the day of a legislator’s election or appointment and ends once that legislator is out of office.
Judicial Retirement System (JRS) – The JRS serves supreme court justices and district court judges. Justices of the peace and municipal judges can also elect into the JRS if the board of county commissioners allows it. If not, judges may participate in PERS instead.
JRS service begins on the day your term of office begins and ends on your last day in office. Under the Old JRS Plan, participants earn the right to receive a retirement allowance after 5 years of service. You can receive an unreduced retirement allowance with 5 years of service at age 60. Under the New JRS Plan, participants still earn the right to receive a retirement allowance after 5 years of service. However, eligibility to receive an unreduced retirement allowance varies. You can qualify with 5 years of service at age 65, 10 years of service at age 60, or at any age with 30 years of service.
Retirement Taxes in Nevada
Once in retirement, your pension plan becomes your main source of income (along with any other retirement accounts, like IRAs, you might have). This means that your pension income is subject to federal taxes.
To change your federal income tax deduction under PERS, you will need to submit the Tax Withholding Certificate or log into your online PERS account.
On the state level, however, Nevada doesn’t have a state income tax. This makes your retirement income, whether from your state pension or other retirement accounts, tax-free. In fact, this lack of retirement income taxation plus pretty low property taxes makes Nevada very tax-friendly toward retirees. It also has no estate tax.
Current Financial Health of the Nevada Retirement System
As of June 2017, Nevada PERS maintained $38.3 billion in assets with an 11.9% total return on investments. That fiscal year saw a net position growth of 10.5%. This retirement system serves around 64,130 recipients.
If you want to better understand how Nevada’s PERS could benefit you, perhaps you want to work with a financial advisor. The right, qualified advisor can take a look at your own finances, your financial goals and your financial opportunities, such as working for Nevada state. Then together, you can create a financial plan to optimize your savings, especially for retirement. SmartAsset offers a financial advisor matching tool to connect you with advisors in your area. That way, you don’t have to waste precious time searching all over for the right advisor and you can get started right away.
Tips for Saving in Retirement
- Without the steady income you’re used to, you’ll want to make sure you save enough money before and during retirement to support yourself. It also helps to make a retirement budget for yourself beforehand. That way, you can have a guide to follow and avoid running out of money too soon. It may also prove useful to also keep an emergency fund in retirement.
Photo credit: ©iStock.com/miroslav_1, ©iStock.com/belenox, ©iStock.com/Stígur Már Karlsson /Heimsmyndir