I have spent my career helping professionals understand and optimize their financial benefits, and I consistently find that retirement plans remain one of the most underutilized tools for building wealth. The ability to adjust your contribution rate is a powerful feature that many employees either forget exists or hesitate to use. If you are a Boston University employee looking to change your retirement plan contributions, you are taking a proactive step toward financial health. The process is administrative, but the decision requires strategic thought. I will guide you through both the mechanical steps of making the change within BU’s specific systems and the financial considerations that should inform your decision. This is about aligning your savings with your current reality and future aspirations.
Understanding the BU Retirement Landscape
Before you make any changes, you must understand which plan you are changing. Boston University typically offers two primary retirement vehicles for its employees, and the process might differ slightly between them.
The BU Retirement Plan is a 403(b) plan, which is a tax-advantaged retirement account similar to a 401(k) but offered by non-profit organizations, including universities and hospitals. This plan likely involves an employer match, which is essentially free money added to your savings based on your own contributions.
The BU Supplemental Retirement Account is a separate 403(b) plan to which you can make voluntary contributions, often without an employer match. It allows you to save beyond the limits of the primary retirement plan.
Your first step is to determine which account you wish to adjust. For most people, ensuring they are maximizing the employer match in the primary BU Retirement Plan is the critical first step. You can confirm your current contribution rates and plan details by reviewing your latest pay stub or by logging into the dedicated retirement plan provider’s website (such as TIAA or Fidelity).
The Mechanical Process: Navigating the BU Systems
The actual process of changing your contribution percentage is handled through the BU Employee Self-Service portal. This is the digital hub for all your employment information, from payroll to benefits. The specific pathway may be labeled slightly differently, but the general steps are consistent.
- Access the BU Works Portal: Navigate to the Boston University HR website and log in to the BU Works Portal using your Kerberos credentials.
- Locate the Payroll and Compensation Section: Once logged in, find the section related to your pay. This is often under a tab or menu item called “Pay,” “Compensation,” or “My Information.”
- Select Retirement Contributions: Within this section, you should find a link for “Retirement Elections,” “Manage my 403(b),” or something similar. This will direct you to the interface for changing your contribution rates.
- Make Your Election Change: You will be presented with your current election for the BU Retirement Plan and the Supplemental Retirement Plan. You can change your contribution type (Pre-Tax or Roth) and the percentage of your salary you wish to contribute. The system will typically guide you, showing you the IRS annual limits and any plan-specific rules.
- Review and Confirm: Before finalizing, review your new elections carefully. The system will usually display an effective date for the change, which will often be the start of the next available pay period. Confirm your changes.
- Documentation: Print the confirmation screen or save the confirmation email for your records. This is your proof of election.
It is crucial to understand that these changes are not instantaneous. They are processed on a payroll cycle. A change made today will likely not affect your current paycheck but will be applied to the next one.
The Strategic Decision: Why Change Your Contribution?
Changing a number in a system is simple. Deciding what that new number should be is the important part. I advise clients to consider these scenarios.
When to Increase Your Contribution:
- To Capture the Full Employer Match: This is the most urgent financial action you can take. If BU matches 100% of your contributions up to 5% of your salary, and you are only contributing 3%, you are declining a 100% return on your investment. Increase your contribution to at least 5% immediately.
- After a Salary Increase: When you receive a raise, a powerful strategy is to increase your retirement contribution by at least half of the raise percentage. If you get a 4% raise, increase your contribution by 2%. You still enjoy more take-home pay while significantly boosting your future savings without feeling the pinch.
- During Annual Open Enrollment: While not always necessary, this period serves as a perfect annual reminder to review your finances and assess if you can save more.
When to Decrease Your Contribution:
- A Genuine Financial Hardship: If you are facing high-interest debt (like credit card debt) or a severe cash flow crisis that your emergency fund cannot cover, temporarily reducing your contributions can free up necessary cash. The math is clear: paying off a 20% interest debt offers a guaranteed, risk-free return that likely outweighs potential market gains.
- A Major Life Change: A significant increase in expenses, such as a new mortgage payment or childcare costs, or a loss of a spouse’s income, may necessitate a temporary adjustment to your budget.
A key point: if you are decreasing contributions, try to remain at a level that still captures any employer match. Losing that match should be an absolute last resort.
Calculating the Impact: A Real-World Example
Let’s make this tangible with math. Assume a BU employee with a $70,000 annual salary. BU offers a 100% match on the first 5% of salary contributed to the Retirement Plan.
Current situation: Employee contributes 3%.
- Annual employee contribution: 70,000 \times 0.03 = 2,100
- Annual BU match: 70,000 \times 0.03 = 2,100
- Total annual contribution: $4,200
Decision: The employee decides to increase their contribution to 7% to save more.
- New annual employee contribution: 70,000 \times 0.07 = 4,900
- Annual BU match (still only on first 5%): 70,000 \times 0.05 = 3,500
- New total annual contribution: $8,400
By increasing their contribution by 4%, the employee more than doubles their total annual retirement savings, from $4,200 to $8,400. The cost is a reduction in their take-home pay of 4,900 - 2,100 = 2,800 for the year, or about $107 per bi-weekly paycheck. This is a dramatic increase in savings for a relatively modest reduction in monthly cash flow.
Pre-Tax vs. Roth: Another Layer of Choice
Within the BU plan, you likely have a choice between making Pre-Tax (Traditional) and Roth contributions. This is not a change in amount, but in tax treatment, and it is a critical decision.
- Pre-Tax Contributions: This money goes into your account before taxes are taken out of your paycheck. It lowers your current taxable income. You will pay ordinary income tax on this money and its earnings when you withdraw it in retirement.
- Roth Contributions: This money is contributed after taxes are taken out of your paycheck. You do not get a tax break today, but the money grows tax-free, and you can withdraw it tax-free in retirement.
The choice boils down to a bet on your future tax bracket. If you believe your tax rate will be higher in retirement than it is today, Roth contributions are likely advantageous. If you believe your tax rate will be lower in retirement, Pre-Tax contributions are likely better. For most young employees early in their careers, Roth contributions can be an excellent choice.
Your Next Steps
Your action plan is clear. First, log into the BU Works Portal and review your current contribution rates. Second, determine if you are receiving the full employer match. If you are not, increase your contribution to the required percentage immediately. Third, consider your financial situation. Can you allocate a portion of your next raise to your retirement? Finally, make the change online. It is a five-minute task with a potentially million-dollar impact on your future financial security. This is the very definition of working smarter, not harder.
