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For some non-profit, tax-exempt organizations, a 403(b) plan is the retirement plan of choice. Typically, the employer either purchases annuity contracts for eligible employees, or establishes custodial accounts to be invested in mutual funds or other investments. In the case of annuity contracts, a 403(b) plan is sometimes referred to as a tax-deferred annuity or a tax-sheltered annuity plan (TSA). Depending on the specific type of 403(b) plan, contributions may be made by you, your employer, or both you and your employer.
A 403(b) plan is not a qualified retirement plan, but it mimics such a plan in that it enjoys similar tax benefits. The most significant benefit is that participating employees are generally not taxed on their plan benefits (including both contributions and investment earnings) until they begin to receive distributions from the plan. Although an employer tax deduction may be possible, this is usually of little or no value, since your employer is exempt from income tax anyway.
As your financial advisor and most trusted council, we can help you better understand all the options that are available to you. From salary reduction strategies to contribution limits to specific tax advantages, our priority is to minimize your risk and maximize your plan's potential so you can achieve your financial objectives.
To speak directly with our expert, contact our office at 800-927-7190 or 973-927-6300 for immediate attention
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