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  • user warning: Table './mysmp_drupal/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = 'Designed to meet the needs of employees of nonprofit organizations, <b class=\"normalize\">403b</b> annuity plans are tax-deferred retirement arrangements that are typically funded by elective salary deferrals. Qualifying nonprofit institutions include public schools and universities, museums, churches, research institutes, hospitals, and libraries, among others; <b class=\"normalize\">403b annuities</b> are only available as sponsored retirement plans through these organizations. <br /><br /><h2>403b History</h2><br />In 1958, the IRS established the 403(b) section of code that allowed the creation of the annuities that bear its name. Annuities in 403b were designed and intended to provide a convenient, tax-deferred way for employees of nonprofit organizations to save and invest for retirement. Because both contributions and earnings are tax-deferred until retirement and distribution, <b class=\"normalize\">annuities in 403b</b> status offer exceptional value for the money invested.<br /><br /><h2>Types of 403b plans</h2><br />Three basic types of <b class=\"normalize\">403b annuity</b> plans are available; custodial, annuity, and retirement income accounts. Custodial accounts are generally invested in mutual fund investments and produce earnings based on the performance of the securities included in the mutual fund or funds included in the plan; they are known as 403(b)(7) accounts. Insurance companies traditionally administer equity indexed, variable and fixed rate 403b annuities. <a title=\"equity indexed annuities\" href=\"/personal-finance/equity-indexed-annuity.html\">Equity indexed annuities</a> are tied to the performance of a specific financial index and produce profits and losses proportionate to those experienced by the particular index. <a title=\"variable rate annuities\" href=\"/personal-finance/variable-annuities.html\">Variable rate annuities </a>offer investors added potential for profit, since they are usually invested in securities, but also incur a higher risk when compared with fixed-rate annuities that guarantee a minimum return on investment. Finally, retirement income accounts are available to ministers and other employees of an organized religion; these 403(b)(9) accounts must be sponsored by the religious denomination.<br /><br /><h2>Advantages of 403b annuities</h2><br />Because the annuities in 403b are funded by pretax earnings, they provide significant tax benefits to employees during what are traditionally the highest income periods of most people&rsquo;s lives. Both contributions and earnings are tax-deferred until the annuity is distributed, usually at retirement. This can lower the total lifetime tax burden for participants; since income during retirement is usually lower than income earned during the working years, contributions to a 403b annuity typically incur a lower tax rate overall. Additionally, a tax credit may be available to participants who make elective contributions; the Retirement Savings Contributions Credit is designed to provide even more tax relief for voluntary contributions to qualifying retirement plans.<br /><h2><br />Limits on contributions</h2><br />The IRS imposes a limit on the amount a participant can contribute tax-deferred to a 403b annuity. The limit typically changes each year; for 2009, that limit was $16,500 for most individuals. Participants over 50 can contribute an additional amount without incurring tax. Regardless of the account holder&rsquo;s age, the total amount contributed by employers and employees in a given year is subject to an IRS-set annual limit, which in 2009 was $49,000. <br /><br />For qualifying participants, 403b annuities provide a solid source of retirement income that can supplement Social Security and other pension plans. Contributing to a 403b annuity provides significant tax advantages as well as the chance to earn additional income for use during retirement.<br /><hr /><strong><u>Annuity Basics</u></strong><br />&lt;&lt; <a title=\"annuities\" href=\"/personal-finance/annuities.html\">Annuity</a><br />&lt;&lt; <a title=\"annuity ladder\" href=\"/personal-finance/annuity-ladder.html\">Annuity Ladder</a><br />&lt;&lt;<strong> </strong><a href=\"/personal-finance/surrender-value.html\" title=\"surrender value\">Surrender Value</a><strong><br /></strong><strong><u><br />Types of Annuities</u></strong><br />&lt;&lt; <a href=\"/personal-finance/variable-annuities.html\" title=\"variable annuities\">Variable Annuities</a><br />&lt;&lt; <a href=\"/personal-finance/life-annuity.html\" title=\"life annuity\">Life Annuity</a><br />&lt;&lt; <a href=\"/personal-finance/equity-indexed-annuity.html\" title=\"equity indexed annuity\">Equity Indexed Annuity</a> <br />&lt;&lt; <a href=\"/personal-finance/hybrid-annuity.html\" title=\"hybrid annuity\">Hybrid Annuity</a><br /><a title=\"private annuity\" href=\"/personal-finance/private-annuity.html\">Private Annuity</a> &gt;&gt;<br /><a title=\"prescribed annuity\" href=\"/personal-finance/prescribed-annuity.html\">Prescribed Annuity</a> &gt;&gt;<br /><a href=\"../../../../../../personal-finance/substandard-health-annuity.html\" title=\"substandard health annuity\">Substandard Health Annuity</a> &gt;&gt;<br /><a href=\"/personal-finance/flexible-premium-deferred-annuity.html\" title=\"flexible premium deferred annuity\">Flexible Premium Deferred Annuity</a> &gt;&gt;<br type=\"_moz\" />', created = 1563557007, expire = 1563643407, headers = '', serialized = 0 WHERE cid = '1:01686d542cf1df9fc03bcc3f8ba6ec21' in /var/www/html/mysmp/includes/cache.inc on line 109.
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403b Plans

Designed to meet the needs of employees of nonprofit organizations, 403b annuity plans are tax-deferred retirement arrangements that are typically funded by elective salary deferrals. Qualifying nonprofit institutions include public schools and universities, museums, churches, research institutes, hospitals, and libraries, among others; 403b annuities are only available as sponsored retirement plans through these organizations.

403b History


In 1958, the IRS established the 403(b) section of code that allowed the creation of the annuities that bear its name. Annuities in 403b were designed and intended to provide a convenient, tax-deferred way for employees of nonprofit organizations to save and invest for retirement. Because both contributions and earnings are tax-deferred until retirement and distribution, annuities in 403b status offer exceptional value for the money invested.

Types of 403b plans


Three basic types of 403b annuity plans are available; custodial, annuity, and retirement income accounts. Custodial accounts are generally invested in mutual fund investments and produce earnings based on the performance of the securities included in the mutual fund or funds included in the plan; they are known as 403(b)(7) accounts. Insurance companies traditionally administer equity indexed, variable and fixed rate 403b annuities. Equity indexed annuities are tied to the performance of a specific financial index and produce profits and losses proportionate to those experienced by the particular index. Variable rate annuities offer investors added potential for profit, since they are usually invested in securities, but also incur a higher risk when compared with fixed-rate annuities that guarantee a minimum return on investment. Finally, retirement income accounts are available to ministers and other employees of an organized religion; these 403(b)(9) accounts must be sponsored by the religious denomination.

Advantages of 403b annuities


Because the annuities in 403b are funded by pretax earnings, they provide significant tax benefits to employees during what are traditionally the highest income periods of most people’s lives. Both contributions and earnings are tax-deferred until the annuity is distributed, usually at retirement. This can lower the total lifetime tax burden for participants; since income during retirement is usually lower than income earned during the working years, contributions to a 403b annuity typically incur a lower tax rate overall. Additionally, a tax credit may be available to participants who make elective contributions; the Retirement Savings Contributions Credit is designed to provide even more tax relief for voluntary contributions to qualifying retirement plans.


Limits on contributions


The IRS imposes a limit on the amount a participant can contribute tax-deferred to a 403b annuity. The limit typically changes each year; for 2009, that limit was $16,500 for most individuals. Participants over 50 can contribute an additional amount without incurring tax. Regardless of the account holder’s age, the total amount contributed by employers and employees in a given year is subject to an IRS-set annual limit, which in 2009 was $49,000.

For qualifying participants, 403b annuities provide a solid source of retirement income that can supplement Social Security and other pension plans. Contributing to a 403b annuity provides significant tax advantages as well as the chance to earn additional income for use during retirement.

Annuity Basics
<< Annuity
<< Annuity Ladder
<< Surrender Value

Types of Annuities

<< Variable Annuities
<< Life Annuity
<< Equity Indexed Annuity
<< Hybrid Annuity
Private Annuity >>
Prescribed Annuity >>
Substandard Health Annuity >>
Flexible Premium Deferred Annuity >>
Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

Tradingsim.com
Day Trading Simulator

Tradingsim.com provides the ability to simulate day trading 24 hours a day from anywhere in the world. TradingSim provides tick by tick data for...

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