See how your contributions can add up

Contribution rates

The default contribution rate

The default savings rate for a Vermont Saves account is 5% of your gross pay, and that amount is deducted from your paycheck after taxes have been taken out.

The default annual increase

The default choice includes a 1% annual increase in savings for your account and takes effect automatically each January, so long as you have been enrolled for at least six months. You can elect not to have your savings rate increase in any given year.

For example, if you start out at 5%, next year your savings rate will increase to 6%. Your savings rate will increase each year thereafter, until you reach 8%.

Change your rate anytime

You can change your savings rate at any time to as little as 1% or up to a maximum of 100%, within IRS limits. Contributions are made post-tax, and your employer can deduct contributions only from the amount available in your paycheck after other payroll deductions required by law have been made.

Contribution limits

Your Vermont Saves account is a Roth IRA, so the total amount you save must be within the federal government’s Roth IRA contribution limits. In 2024, the IRA contribution limits are $7,000 per year (and $8,000 per year if you are age 50 or older), as long as you earn at least $7,000 in wages.

The amount of money you can contribute to a Roth IRA depends on how much you earn and your Modified Adjusted Gross Income (MAGI), which is essentially what you earn at your job, plus any other income from investments and other sources. Your contribution limit also depends on how you file your taxes.

Computing your Modified Adjusted Gross Income (MAGI)

See IRS publication 590-A(2022) Contributions to Individual Retirement Arrangements (IRAs) for more information and an easy-to-follow worksheet for computing your MAGI.

Unsure of how much to save?

We have a number of tools and resources to help you plan, as well as our retirement savings calculator. You can also talk to a financial or tax advisor to help you assess your options.

Investments with an assumed 5% annual rate of return*

*This hypothetical example shows the potential of what an initial investment of $500 and a monthly contribution at a 5% projected annual rate of return could become over a period of time. Note this is just an example; your actual results may be more or less.