403b Plan And Administration Changes  

      A 403b plan is a tax-deferred retirement saving plan for people who are working for educational institutes and non-profit organizations. Even self-employed ministers in the US can avail of this retirement savings plan.

      Employees contribute money to this plan before tax deduction and the money in the 403b account is allowed grow tax-deferred. The person only has to pay taxes once he withdraws money from the account.

      If you want a 403b retirement savings plan, you can one of the following types of accounts:

  • Through an insurance company you can have an annuity contract. These annuities can either be tax-sheltered annuities (TSAs) or tax-deferred annuities (TDAs)
  • You can have a custodial account which you can have through a retirement account custodian. Here investments are limited to investment companies that are regulated. For example, mutual funds
  • You can also have retirement account where the money you contribute can either be invested in annuities or mutual funds.

      Usually the employer decides which financial institute to use and based on that employees maintain their account. This will also determine the type of investment you make as you will only be able to invest in what the chosen financial institute offers.

       Your plan administrator should keep up-to-date with all the administration changes occurring in the 403b retirement savings plan. It is his or her job to be informed otherwise there can be serious repercussions, and ones who will be affected will be the employees.

       The Bush Administration has made certain administration changes in the 403b plan. You should consult your plan administrator to figure out how these changes affect you and your retirement savings.

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