We know the last thing teachers often have time for is retirement planning. That’s why we’ve created a few study guides to make it easier to learn about how to make a 403(b) work for you.
Browse our reference library here.
Understand your 403(b) options and how best to benefit from them.
A 403(b) plan is a smart way to save for retirement, offering tax-deferral advantages, flexibility and control of your savings and the option to take guaranteed future income when you’re ready.
Created to meet the needs of employees of public schools, non-profits and certain churches, a 403(b) retirement savings plan can work alongside any pension your employer may offer. With a traditional 403(b) plan, your contributions are made on a pre-tax basis and grow tax-deferred while in the plan. You only pay taxes when you take it out of the plan. With a Roth 403(b) plan you pay taxes on the contributions up front, but the money grows tax-free.
Saving in a 403(b) allows you to:
See what other educators are asking and find answers too.
Contributions must be made through payroll. A salary reduction agreement is required and will inform your employer of your decision to participate. You can change the amount of your contributions by completing a new salary reduction agreement.
No. All 403(b) contributions must be made through payroll.
The IRS sets annual deferral limits on how much may be contributed. Special catch-up provisions may apply for participants over age 50 and for longevity of service with the same employer. A retirement specialist can assist you in calculating the Maximum Allowed Contribution.
If the 403(b) plan allows, loans are permitted to individuals. The plan sponsor must approve loans in advance. Loan limits apply and are aggregated with any other loans in 403(b) accounts within the plan and any loans from any other qualified retirement plan of the employer.
You can take distributions from the 403(b) plan at age 59½, if you are fully disabled, or at separation of service. A 10% IRS penalty may apply if withdrawn before age 59½. Regular income tax will be due on distributions—unless a Roth 403(b). To qualify for the federal tax-free and penalty-free withdrawal of earnings, a Roth 403(b) must be in place for at least five years, and the distribution must take place after age 59½ or due to death or disability. Distributions due to financial hardship may be available. Please check with the Plan Administrator for eligible hardship distributions and be able to provide any supporting documentation of the hardship. All distributions must be approved by the plan administrator.
Most school districts engage a third-party administrator (TPA) to establish and manage their 403(b) plan document to ensure compliance with IRS rules and guidelines. A school district’s benefit office can provide you with information regarding their TPA.
You have control of your 403(b). The portability feature allows you to roll over the funds in this account into another retirement plan you may have. Or, you can leave your account in place and any balance has the potential to continue to grow tax-deferred.
Rollovers, exchanges and transfers
Your 403(b) gives you additional advantages in flexibility and control. Rollovers, exchanges and transfers are just three of the ways to you can confidently maintain and manage your retirement savings plan.
A rollover refers to moving money from one plan to another plan and requires a 1099R.
An exchange refers to changing investments within an existing plan.
A transfer refers to money moving from one plan to another plan but does not trigger a 1099R.
It’s never too late to start to save for retirement. But the numbers show that the earlier you begin, the better your outlook will be.
Use our calculators to find gaps and learn how—and how quickly—to address them.
Use this pre-retirement calculator to determine how much you may need to save on a regular basis to help improve your retirement outlook.
Use this calculator to determine if you may be eligible to contribute to both a Traditional and a Roth IRA.
Learn about the retirement savings options your district offers in three quick steps.
1 Find and download your Employee Handbook.
2 Discuss your options with the benefits resource in your district.
3 When you’re ready, contact us for help saving for a secure retirement.
We work to bring peace of mind so you can focus on what matters most.
LifeChanger of the Year is an annual program sponsored by National Life Group that recognizes and rewards K-12 educators and school employees nationwide. Our program celebrates those who are making a significant difference in the lives of students by exemplifying excellence, positive influence and leadership. Nominations for the 2018-19 LifeChanger of the Year program are now open.