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Why should you start a 403(b)?
September 17, 2021
It doesn’t take much time to start a 403(b), and it may be one of the wisest financial moves you make. Here are some frequently asked questions about 403(b)'s.
Q: Why should you start a 403(b)?
A: It can become one of your best retirement savings vehicles.
A 403(b) is a great option for building retirement savings.
You can defer a bit of your salary into the account each month, without impacting your lifestyle. That money has the chance to grow and compound greatly over the years.
A 403(b) lets you build wealth with tax deferral.
This is so crucial. You won’t retire purely on the money you save for retirement; you’ll retire on the earnings from that money. The earnings on a 403(b) account aren’t taxed, so there’s no bite out of your investment return. The earnings will only be taxed when withdrawn from the plan.
You can pay yourself before you pay Uncle Sam.
Putting money in a 403(b) is a form of legal tax avoidance. Instead of giving up as much as 35 or 40 cents on every dollar to federal and state government, you can pay yourself first by simply putting dollars in a 403(b) account as those are pre-tax dollars.
Your employer might match some or all of your contribution.
Some colleges and non-profits do offer a match. The match is usually around 50 cents for every dollar you contribute to the plan.
You could be eligible for a $1,000 (or even $2,000) income tax credit.
If you contribute to a 403(b) and your adjusted gross income (AGI) falls under a certain level, you may be eligible for the Savers Credit, a federal tax break of $1,000. If you are married and file jointly, the credit could go be as large as $2,000.
The content is developed from sources believed to be providing accurate information.
The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
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Suncoast Trust Services is a marketing name used by Suncoast Credit Union. Trust services provided by Members Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. Trust and Investment products are not federally insured, are not obligations of or guaranteed by the credit union or any affiliated entity, involve investment risks, including the possible loss of principal.
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Suncoast Investment Services is a marketing name used by Suncoast Credit Union. Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Suncoast Credit Union and Suncoast Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Suncoast Investment Services, and may also be employees of Suncoast Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Suncoast Credit Union or Suncoast Investment Services. Securities and insurance offered through LPL or its affiliates are:
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