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Introduction to the 403(b)

icon introWhat is a 403(b)?

As an employee of a public school, you have a unique opportunity to invest for your retirement through a 403(b) retirement plan, sometimes referred to as a tax-sheltered annuity (TSA).

Offered through the employer, 403(b) plans:

  • Are salary deferral plans that allow you to contribute to your retirement through the convenience of payroll deduction, like 401(k) plans offered in the private sector.
  • Offer you the opportunity to build up retirement savings and direct your savings investment to best meet your goals and personal situation.
  • Accept contributions on a before-tax and/or after-tax (Roth) basis. Please check with your school to see what type of 403(b) contributions are permitted.

The benefit of contributing to a 403(b)

pie chart enrollmentA 403(b) investment allows you to fill any shortfall in your retirement income that may not be satisfied by your Wisconsin Retirement System (WRS) pension plan and Social Security benefit. Retirees are living longer and are more active in retirement. Saving outside of traditional sources is becoming increasingly important.

*The percentage of salary replaced is tied to how many years one works in state service. The 40%–50% figure assumes 25–30 years in the system.

 

Follow this link for important 403(b) disclosures.

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