Benefits of Contributing to a 403b Plan

7 Benefits That Will Make You Take a Closer Look at 403(b) Plans 01 Contributions are Tax Deductible When you contribute to a 403(b) plan, you not only contribute from your pre-tax income, but you can also deduct your contributions from your federal tax payment. U2 Multiple Investment Options 403(b) plans allow multiple providers to administer the plan, each offering a range of investment options. 03 Taxes are Paid When Money is Withdrawn You will have to pay taxes on your contributions, but not until you withdraw from the plan during retirement. At this time, you will most likely be in a lower tax bracket, meaning you will pay less tax. 04 There May be a Roth Option Many employers allow Roth contributions to a 403(b) plan, meaning you will make contributions from your taxed income. However, when you withdraw from the Roth portion of your plan, you will not have to pay taxes on it. U5 Savings Will Grow Tax-Free You do not have to pay taxes on interest, capital gains or dividends on the money in your 403(b) account. 06 Loans Could Potentially Be Taken Against Your Plan Some 403(b) plans allow holders to take a loan from the plan. Requirements and consequences vary. 07 Contribution Limits are Higher Than for IRAS In 2015, contribution limits are set at $18,000. Participants who are 50 or older and have 15 years of service with the same employer can contribute an additional $6,000. ed ed [000)