At Gardner & Associates, PLLC. we are always trying to find the product that best suits the clients need. In some cases, the 403b chassis could very well be that product.

A 403(b) plan is a U.S. tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only Internal Revenue Code 501(c)(3) organizations), cooperative hospital service organizations, and self-employed ministers in the United States.It has tax treatment similar to a 401(k) plan, especially after the Economic Growth and Tax Relief Reconciliation Act of 2001.

Employee salary deferrals into a 403(b) plan are made before income tax is paid and allowed to grow tax-deferred until the money is taxed as income when withdrawn from the plan.

403(b) plans are also referred to as a tax-sheltered annuity although since 1974 they no longer are restricted to an annuity form and participants can also invest in mutual funds.

Participants may contribute up to $18,000 for year 2016. In 2015 the limit was also $18,000. In 2014 and 2013 the limit was $17,500. It was $17,000 in 2012.

For those with employer matches or other employer contributions, the limit is $53,000 or 100% of compensation (whichever is less). The participant is still limited to the employee elective deferral limit ($18,000 for 2016). An employer can add up to another $35,000.


Age 50 Catch Up

Participants age 50 and older at any time during the calendar year are permitted to contribute an additional $6,000 in 2016. The age 50 catch up in 2015 was also $6,000. From 2009 to 2014 it was $5,500.

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