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YOUR 403(B) TAX SHELTERED ACCOUNT
PROGRAM
Prepared for the Employees of
Riverview Intermediate Unit #6
What is a 403(b) Tax Sheltered Account (TSA)?
 TSA’s are voluntary long-term retirement
savings plans that allow all school employees
to set aside money on a tax deferred basis for
retirement.
 Section 403(b) of the IRS Code establishes
and permits Tax Sheltered Accounts for all
school employees.
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Why you should take advantage
of a 403(b) TSA program
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
Reduce current
income taxes

Provides taxdeferred
growth*

Supplements
other
retirement
income 
*Income taxes paid at time of withdrawal
How does a 403(b)
Tax Sheltered Account (TSA) work?
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2012 Taxable Income
$100/pay in Bank
$100/pay in TSA
$50,000
$50,000
(Married filing jointly)
TSA: $100/pay x 26
Adjusted Gross Income
Income Tax
-$2,600
$50,000
$47,400
$12,500
$11,850
-$650
Contributions of $2,600 per year could accumulate to $37,214 after 10 years,
with an income tax savings of $6,500
*Assuming a 25% Federal Tax bracket and a 7% fixed annual interest rate
How much can I elect to contribute to my 403(b)?
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Employee Deferral Limits in 2012
2012
Normal Limit (or 100% of pay, if less)
Aged 50+ “Catch up”
Maximum Employee Contribution
$17,000
$ 5,500
$22,500
When can I get my money out of my TSA?
•No IRS penalty if age 55 and separated from service
•In-Service withdrawals permitted at age 59 ½
Your 403(b) Plan permits:
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 Universal Availability (every employee can participate)
 Exchanges (between approved vendors)
 Transfers (from or to another school employer)
 Loans (if offered by the vendor)
 Hardship Distributions (if offered by the vendor)
 Roth 403(b) Contributions
And, our IU offers employees the ability to contribute to a
457(b) Deferred Compensation Plan
Roth 403(b)
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 What?
 Section of IRS Code that allows participants to make
after-tax contributions, receive tax deferred growth,
and make after-tax withdrawals after retirement
 Benefits
 Allows you to have tax-free assets after retirement
 Allows a combination of tax-free and taxable
contributions during retirement
 Could be useful for employees with more time to save
457(b) Plan – Deferred Compensation
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 What?
 Section of IRS Code that allows participants to defer
income until retirement, and shelter that income from
current Federal Income Taxes
 Benefits
 Can be combined with a 403(b) to allow twice the
amount of pre-tax savings per participant
 Ability to access the money prior to age 59 ½ if
separated from service
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Combined Contribution Limits for 403(b) and
457 Plans for 2012
Account Type
Basic Contribution
Limit
(Under age 50)
Age 50 or Older Catch
Up
Total Annual
Contribution Limit
(Age 50 or above)
403(b)(7) or Roth
403(b)(7) Tax
Sheltered Program
$17,000
$5,500
$22,500
457(b) Program
$17,000
$5,500
$22,500
Combined 403(b)(7),
Roth 403(b)(7) &
457(b) Total
$34,000
$11,000
$45,000
The Time is Now
The Benefit of 403(b) Contributions
TSA Contributions with $30 per pay, per year Increase
•
Years
$50
$100
$250
$500
5
$15,150
$22,300
$43,749
$79,498
10
$57,848
$75,026
$126,559
$212,447
20
$274,711
$325,679
$478,586
$702,546
30
$799,957
$911,436
$1,227,747
$1,668,311
Above Chart Assumes:
• Contributions over 24 pays per year, 7% interest, and maximum $20,000 annual contribution
• Assumes eligibility for age 50 Catch-up contributions
• Illustrations are hypothetical and are not intended to serve as projections or prediction of performance for any
specific investment
Riverview Intermediate Unit #6
List of Approved Investment Providers
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






Ameriprise Financial
Horace Mann Life Insurance Company
Kades-Margolis Corporation
MetLife Investors Insurance Company
P&A Administrative Services, Inc.
Security Benefit
Symetra Life Insurance Company
Complete contact information for all of the representatives of the above approved investment providers is
included in the Summary Plan Description, which can be found at www.employeradmin.com
Getting Started:
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 Go to www.employeradmin.com for more information about your
403(b) Plan
 Contact one of the investment provider representatives listed in the
Summary Plan Description to open a TSA and/or 457 account
 Remove and complete the Salary Reduction Agreement in the
Summary Plan Document or download a copy from the EAS
website: www.employeradmin.com
 Turn the Salary Reduction Agreement into the payroll office
Your 403(b) Tax Sheltered Account Program
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Questions?
The information in this presentation is for informational purposes only and should not be construed or relied upon as tax advice
or legal advice. It was not intended to be used, and cannot be used, for the purpose of avoiding penalties under the Internal
Revenue Code or promoting, marketing or recommending to another party any transaction or matter presented.
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prospectus. An investment in a mutual fund or variable annuity involves risk, including loss of principal, and is not a deposit or obligation of, or
guaranteed by any bank. The investment return and principal value of an investment in a mutual fund or variable annuity will fluctuate so that you may
have a gain or loss at redemption. Securities and Registered Investment Advisory Services Offered Through
GWN Securities, Inc. 11440 Jog Road
Palm Beach Gardens, FL 33418 (561) 472-2700
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For more information and to carefully consider the securities offered, including investment objectives, risks, charges, expenses and fees, please
request a prospectus from you GWN Registered Representative.
Please read it carefully before you invest or send money.