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403(b) & 403(b)(9)
Retirement Savings Plan

The 403(b) and 403(b)(9) retirement plans are tax-advantaged retirement savings plans designed for employees of certain non-profit organizations and public educational institutions.

Tax-Advantaged Contributions

Participants can make pre-tax contributions to their 403(b) and 403(b)(9)  plans, reducing their taxable income in the year of contribution. This provides immediate tax benefits and lowers the participant's overall tax liability.

Variety of Investment Options

403(b) and 403(b)(9) plans typically offer a range of investment options, including mutual funds, annuities, and other investment vehicles. This diversity allows participants to tailor their investment strategy to their risk tolerance and financial goals.

Tax-Deferred Growth

Earnings within the 403(b) and 403(b)(9) plans grow tax-deferred. This means that participants do not pay taxes on the investment gains each year, allowing for potential compound growth.

Rollover Options

Participants may have the option to roll over funds from 403(b)  and 403(b)(9) plans to another eligible retirement account upon separation from service.

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The 403(b) and 403(b)(9) retirement plans 

Designed for employees of specific non-profit organizations and public educational institutions.

403(b) Plan


Eligibility
Employer Type: Available to employees of public schools, certain non-profit organizations, and certain ministers.
 

Contributions
Employee Contributions: Participants can make pre-tax contributions to the plan, reducing their taxable income.

Employer Contributions: Some employers may offer matching contributions or non-elective contributions to enhance employees' retirement savings.

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Contribution Limits
As of 2023, participants can contribute up to $22,500 annually (or $30,000 if age 50 or older) to a 403(b) plan.


Investment Options
Participants can typically choose from a variety of investment options, including annuities and mutual funds.


Withdrawals
Withdrawals from a 403(b) plan are generally taxed as ordinary income. Early withdrawals (before age 59½) may be subject to a 10% penalty unless an exception applies.


Rollovers
Participants may have the option to roll over funds from a 403(b) plan to another eligible retirement account upon separation from service.


Loan Options
Some 403(b) plans may offer loan options, allowing participants to borrow from their account for specific purposes.


403(b)(9) Plan


Eligibility
Employer Type: Typically used by churches and church-related organizations.


Contributions
Employee Contributions: Participants can make pre-tax contributions to the plan.


Contribution Limits
Similar to the traditional 403(b) plan, participants can contribute up to $22,500 annually (or $30,000 if age 50 or older).


Investment Options
Investment options may include annuities, mutual funds, and other investment vehicles.


Withdrawals
Withdrawals from a 403(b)(9) plan are generally taxed as ordinary income. Early withdrawals (before age 59½) may be subject to a 10% penalty unless an exception applies.


Rollovers
Participants may have the option to roll over funds from a 403(b)(9) plan to another eligible retirement account upon separation from service.


Unique Features
The 403(b)(9) plan is specifically designed for church employees and offers certain unique features that may align with the principles of certain religious organizations.


It's crucial to note that specific rules and features of 403(b) and 403(b)(9) plans can vary, and any changes in tax laws may affect the information provided. Employees should review the terms of their specific plan and consult with their employer's benefits department or Book Free Online Consultation for personalized guidance.

 

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Financial Tax Planners today! 

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