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403(b) Plans

Benefits and overview

403(b) plans are retirement plans that are available to non-profit organizations and educational institutions. Many organizations may take advantage of these retirement plans because there are no limitations as to the size of the organization.

The many benefits provided by 403(b) plans are:

• Earnings while inside of the account grow on a tax deferred basis and are not taxed until withdrawn.
• Investments may be either annuities or mutual funds.
• The plans are employee funded with pre-tax contributions. The maximum allowable employee contribution is $13,000.00.
• These plans provide a special catch up election depending on years of service, that increases the elective deferral limit.
• Loans and hardship withdrawals are available.
• Employer contributions are optional and discretionary.
• Withdrawals prior to age 59 1/2 are subject to ordinary income taxation and in most cases a 10% penalty.

If you would like to further investigate the possibilities of adopting a 403(b) plan for your organization or are dissatisfied with an existing plan please contact us.