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IMPORTANT INFROMATION ABOUT YOUR ELIGIBILITY FOR THE TEXAS TECH 403(b) Tax Deferred Account (TDA) Retirement Plan
New Contribution Levels for 2019
All employees, except students performing services exempt from FICA, are eligible to participate in a voluntary 403(b) tax deferred retirement program, referred to on our campus as a Tax Deferred Account (TDA).
What is a 403(b) plan?
A 403(b) plan is a tax-deferred retirement plan available to employees of educational institutions and certain non-profit organizations. In this plan, you can make pre-tax contributions for retirement savings through a payroll deduction. Distributions generally are only available when you reach age 59 ½ or experience a severance of employment. However, distributions can also be available in the event of financial hardship, death, or disability. Penalties may also apply if withdrawn prior to age 59 ½.
Why contribute to a 403(b)?
Participation in the plan can provide a number of benefits including:
Lower Tax Liability Today – 403(b) contributions are made on a pre-tax basis which can reduce your current income tax bill. For example, a before-tax contribution of $100 per month actually costs only $72 out of your paycheck (assuming you are in the 28% tax bracket).
2019 Contribution Levels – The tax law allows you to save up to $19,000 in 2019 or 100% of your compensation, whichever is less. And if you are age 50 or over you may be able to contribute an additional $6,000. Note to ORP participants: These limits may be reduced for individuals participating in the Optional Retirement Plan (ORP). The annual limit for ORP and TDA combined limit is $62,000 for 2019.
Tax-Deferred Growth – Participant accounts in the 403(b) plan are tax-deferred. This means that the account grows tax-free until time of withdrawal.
Enhanced Retirement – Other sources of retirement income, including state plans like the Teacher Retirement System of Texas (TRS), ORP and Social Security, often do not adequately replace a person’s salary upon retirement. A 403(b) TDA can provide a supplement to an employee’s retirement income.
Enroll now or change your current enrollment –Enrollment is always “OPEN” for the TDA plan. More information regarding the Texas Tech 403(b) plan and the approved vendor list is available from the human resources office or on the Retirement Manager website: www.myretirementmanager.com/?ttu
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Posted:
4/22/2019
Originator:
LaDonna Johnson
Email:
ladonna.johnson@ttu.edu
Department:
Human Resources
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