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Power of Tax Deferral
CalSTRS Member Handbook
CalSTRS Member Handbook
403.b.tsa
IRS Publication 571 TSA

Teacher’s Retirement Plans Tax Sheltered Annuities

Teachers and employees of many tax exempt employers are encouraged, permitted and allowed by the Internal Revenue Code §403 (b) which permits tax deferral of your contributions to save for their retirement.

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Take a look at this chart to see how much more money you will have saved at Retirement, by using the power of Tax Deferral. North American Brochure

Here’s General Info from the IRS website on IRC §403 (b) Tax Sheltered Annuities.

A 403(b) plan (tax-sheltered annuity plan or TSA) is a retirement plan offered by public schools and certain charities. It’s similar to a 401(k) plan maintained by a for-profit entity. Just as with a 401(k) plan, a 403(b) plan lets employees defer some of their salary into individual accounts. The deferred salary is generally not subject to federal or state income tax until it’s distributed. However, a 403(b) plan may also offer designated Roth accounts. Salary contributed to a Roth account is taxed currently, but is tax-free (including earnings) when distributed.

Eligible employers are a:

  • public school, college, or university,
  • church; or
  • charitable entity tax-exempt under Section 501(c)(3) of the Internal Revenue Code

 

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Pros and Cons:

  • Flexibility in contributions
  • Investment options are limited to those chosen by the employer
  • may have high administrative costs
  • optional loans and hardship distributions add flexibility for employees

Additional resources

Call 310.519.1335 or email us [email protected]  to get a plan going for you.

LAUSD Information

Directions for beginning or modifying a TSA

TSA Schedule due dates

TSA – Certification of Eligibility 2007

TSA – Certification of Eligiblity 2008

403b Compare

Learn more at Tax Facts for Life & Health Insurance
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Related pages in Retirement Planning  Section

Can a disabled Teacher qualify for Medicare before age 65?

 

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