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PlanMember Services
Planning Your Future...Today
PlanMember Services 403(b) Savings Program
Your Future For a Secure Retirement
To download the brochure as a PDF, click here.
What is a TSA? (Tax Sheltered Account)
A TSA is a savings program under section 403b of the IRS Code.
It allows you to accumulate and invest funds free of income
tax. You pay no taxes until you withdraw the funds.
Who is eligible for a TSA?
Any employee working at a public school, college, or university.
Employees of certain nonprofit organizations may also be eligible
to participate.
How do I contribute to a TSA?
Contributions are made through automatic payroll deductions.
What are the benefits of a TSA?
A TSA allows you to save and invest pre-tax earnings so you can work
towards building a larger nest egg for you retirement. You save money
and accumulate more earnings by deferring federal and state income taxes.
In the example below, your net pay would actually INCREASE by one dollar
while at the same time increasing your deposit by $115 per month.
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Tax Rate
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Annual Contributions
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Annual Tax Savings
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15%
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$3000
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$450
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28%
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$3000
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$840
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36%
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$3000
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$1080
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Regular Savings
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Gross Pay
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Tax Withholdings
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Sub Total
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Savings
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Net Pay
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$3000
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$840
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$2160
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$300
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$1860
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With TSA Savings
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Gross Pay
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Pre Tax Savings
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Adjusted Gross
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Tax Withholdings
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Net Pay
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$3000
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$415
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$2585
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$724
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$1861
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These are hypothetical illustrations and are not indicative
of any particular investment.
When can I make withdrawals
from my TSA?
Generally at age 59 1/2. Other exceptions may apply. IRS imposes
penalties if you withdraw funds earlier.
Can I have access to my
TSA account?
Yes, most TSAs allow you to borrow funds by using the TSA as
collateral. You will not be penalized or taxed provided the
loan is paid in full and on time.
When are taxes paid on
a TSA?
You will only pay ordinary income taxes when the funds are
withdrawn.
What happens to the TSA
if I die?
Your named beneficiary will receive the benefits. TSA proceeds
are not subject to probate.
How much can I contribute
to my TSA?
You can shelter 20% of your allowable compensation (gross -STRS),
up to a maximum of $14,000 per year. If you have worked at your employer for over 15 years you
may contribute and additional $3,000.00 Also there now is a special
provision for over 50 years of age to contibute an additional $4,000.00
per year.
How does a TSA compare
to an IRA?
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TSA
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IRA
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Pretax Contributions
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Yes
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No
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Maximum Annual Contribution
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$14,000
(+$3000 catch-up)
(+4000 over 50)
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$4,000
(+$500 over 50)
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| Loan Provision |
Yes
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No
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| Tax Deferred Growth |
Yes
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Yes
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Automatic Payroll Deduction
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Yes
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No
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