A 403(b) is much like a 401k or a 457. The 403(b) gives you an added vehicle to save, and store money that is tax deferred until you ultimately decide to retire.
403(b) works much like a 401k or 457, in that you are able to put money away in a tax-deferred account that you will be able to access when you do in fact retire. The money is taken directly pre-tax from your paycheck and goes through a third party administrator (TPA), from the TPA it goes to the annuity carrier of your choice.
We all know that sometimes the times are tough and life is hard. The 403(b) is one of the few investment vehicles that encompass loan provisions.
403(b)s are very beneficial for your future. More often than not, most people know someone that retired and, then to no avail, had to come back to the workplace only a year or two later, because they couldn’t afford not to. The 403(b) was put into place so that you have the opportunity of saving added dollars, which will contribute to the amount that you will receive after you retire.
Unfortunately, because teachers and school districts make no contributions to the Social Security, they are unable to receive it. Educators and employees within the school system are not eligible to receive Social Security. More importantly, and what is most commonly misunderstood, if you are married, and your husband or wife contributed to the Social Security system and they pass away, you will not be able to receive your spouse’s Social Security benefits.
TSA stands for ‘Tax Sheltered Annuity.’ Simply put, it means that you do not pay taxes on the money going in or the interest gained. However, if you pull the monies out early, or start to take distributions at retirement, you will be required to pay taxes on the monies distributed, not the full account value.
As long as you are an employee of a tax-exempt organization, established under section 501(c)(3) of the Internal Revenue Code, you are able to participate in the 403(b).
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Call American Teachers Retirement Services, LLC. (972-562-0362), to meet with an agent and get your questions answered by a professional.