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403(B)
What is a 403(b) plan?
403(b) plans, often referred to as
tax-sheltered annuities (TSAs), tax-deferred accounts (TDAs),
or tax-sheltered custodial accounts (TSCAs), are 401(k)-like
salary deferral plans that allow employees of eligible
tax-exempt organizations to contribute up to $10,500 annually
for retirement through convenient pretax payroll deductions. Eligible
tax-exempt organizations include public schools, colleges,
universities, and 501(c)(3) tax-exempt organizations (nonprofits).
Any money that you contribute to a 403(b)(7) always
belongs to you. First established by the IRS in 1958 and named
after the section of the code that created them, 403(b)
plans were later expanded to allow mutual funds as investment options
[403(b)(7) Tax-Sheltered Custodial Accounts]. 403(b)(7)
plans are designed to empower the employees of eligible
tax-exempt organizations to save for their own retirement through
an effective pretax program. They offer participants
the opportunity
to accumulate retirement savings and direct their savings
investment in the fashion that best suits their situation
and goals. Salary deferral contributions are always fully
vested.
You can actively save for your retirement, even
if your employer cannot. 403(b)(7) plans also allow participants
to make annual contributions according to their own needs and abilities.
Even in years in which their employer's financial abilities
might limit contributions to traditional pension plans,
participants can continue to make maximum contributions.
The ability to bridge gaps in employer funding of retirement
plans, and to switch jobs without sacrificing retirement
benefits, make 403(b)(7) plans in important retirement
savings tool for employees of schools and non-profit
organizations.
Contact us to find out more about the
403(b)(7). Our registered representatives are here to help
you identify
and achieve
your financial goals.
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