TRS PENSION
The TRS retirement plan is a governmental, tax-exempt plan that ranks as the sixth-largest public pension plan in the U.S. The sheer size and history of success attract many excellent opportunities that ultimately benefit you. Your TRS pension will provide monthly payments for life throughout your retirement years.*
403(B)
A 403(b) plan (tax-sheltered annuity plan or TSA) is a retirement plan offered by public schools and certain charities. It is similar to a 401(k) plan maintained by a for-profit entity. Just as with a 401(k) plan, a 403(b) plan allows employees to defer a portion of their salary into individual accounts. The deferred salary is generally not subject to federal or state income tax until its distribution. Eligible employers are a:
public school, college, or university;
church; or
charitable entity tax-exempt under Section 501(c)(3) of the Internal Revenue Code.
The limit on elective deferrals--the most an employee can contribute to a 403(b) account out of salary--is $22,500 in 2023. Employees who are age 50 or older, at the end of the calendar year, can also make catch-up contributions of $7,500 in 2023, beyond the basic limit on elective deferrals.**
IRA
IRAs allow you to make tax-deferred contributions to provide financial security when you retire.
Contributions you make to a traditional IRA may be fully or partially deductible, depending on your circumstances.
Generally, amounts in your traditional IRA (including earnings and gains) are not taxed until their distribution.
Contribution Limits:
$6,500 ($7,500, if you are age 50 or older), or
your taxable compensation for the year, if your compensation was less than this dollar limit**
ROTH IRA
A Roth IRA is an IRA that, except as explained below, is subject to the rules that apply to a traditional IRA.
You cannot deduct contributions to a Roth IRA.
If you satisfy the requirements, qualified distributions are tax-free.
You can make contributions to your Roth IRA after you reach age 70 ½.
You can leave amounts in your Roth IRA as long as you live.
The account or annuity must be designated as a Roth IRA when it is set up.
Contribution Limits:
$6,500 ($7,500, if you are age 50 or older)
The same combined contribution limit applies to all of your Roth and Traditional IRAs.**
NON-QUALIFIED ACCOUNTS
Non-qualified annuities are purchased with after-tax money. When a non-qualified annuity is withdrawn, either fully or partially, the first dollars out are considered the interest, or growth, in the annuity. This interest is taxed as ordinary income when withdrawn. After the interest has been completely distributed, the remaining portion representing the original contribution in the annuity is received tax-free.
If payments are taken in the form of an annuity payout (a distribution taken out over a predetermined period of time), a portion of each payment is considered a return of the original contribution and is excluded from gross income, and a portion is considered interest and taxed as ordinary income. The percentages that are interest and return of contribution are based on the type of payout and the age the recipient elects to receive distributions. Distributions taken before age 59 ½ are subject to a 10-percent early withdrawal penalty tax, but only on earnings.**
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