403(b) & TSA Programs
Now is the time to plan for your future.
Peak Financial Solutions is an independent financial planning firm, which means we are not limited to working with just one of the CCSD investment options. Since we're able to work with different companies, we're able to select the right investment for you.
We been helping teachers and administrators in the Clark County School District and other schools with their retirement plans for over 30 years. Click here to see what makes us different. Call us at (702) 870-7711 to put our experience to work for you.
Q: What is a 403(b) or TSA?
A: IRS code 403(b) is also known as the Tax Sheltered Annuity (TSA). It is a savings program designed for educators. It allows you to:
- Save money for retirement
- Lower your taxes
- create a source of funds for emergencies
Q: What is a 457 plan?
A: In 2001, Congress opened up the 457 program for public education employees. The plan allows you to save money and play less taxes now, just like the 403(b). In addition, if you wish to withdraw money from your 457 plan, there is no 10% early withdrawal penalty.
Q: I will get a pension from the school district, so why do I need to save more?
A: While you will be getting a pension from the school district, the money you receive may not keep up with inflation. This is where your retirement savings will be very important. We find that many retirees don’t need to dip into their savings at first, but after a few years, they need a little more income. That is when they start taking money out of their retirement savings plan. You may also be able to use your retirement savings plan to save up money to buy out a year or two of your pension.
Q: How does a 403(b) or 457 lower my taxes?
A: Contributions to your 403(b) or 457 are made with pre-tax dollars which lowers your effective income. Let’s look at an example to see what happens:
|No Contribution||With $200 contribution|
|Take Home Pay||$1,700||$1,530|
In this example, you put away $200, but the difference in your salary is only $170 because of your reduced taxes. Your funds will grow tax-deferred, allowing your earnings to compound faster. Put the power of tax deferred savings to work for you!
Q: How much can I contribute?
A: The minimum depends on the company, but is often around $50 per paycheck. The maximum you can contribute is $17,500 for 2013 with an extra $5,500 for those 50 and over.
Q: What happens if I leave my job?
A: Your retirement account always belongs to you. If your new employer offers a retirement savings plan, you may be able to keep contributing to your existing plan. Otherwise, you can leave your contributions to grow tax deferred.
Useful Forms & Links
Aspire Financial Services - for accounts with American Funds, Oppenheimer Funds, and Franklin Templeton Funds
TSA Consulting Group - manages the TSA & 457 program for CCSD