Celebrate what you’ve saved in your 403(b)!
No one said balancing work in the classroom and retirement planning was easy – but you’re getting it done!
With another busy, productive year in the classroom behind you, we hope you can find a moment to relax and take some time to take care of yourself. You’ve done great work saving for your retirement to date – and that’s something to be proud of. Now’s a good time to take a moment to be sure you’re on track and saving efficiently.
The heart of retirement planning
Adding up all your sources of income in retirement and subtracting all your estimated expenses is the foundation of retirement financial planning. These sources may vary but usually include Social Security, a pension (if offered by your school system) and your 403(b) and other personal savings, like a money market or annuity. Expenses may include rent or mortgage, utilities, groceries, gas, entertainment, etc.
You made a wise choice to fund your 403(b)
As a teacher, your 403(b) may be one of the best things you can do to save for retirement. In addition to growing tax deferred, your contributions reduce your current taxable income and, in some cases, even set up via payroll deduction. It’s also important to keep up with 403(b) annual contribution limits and adjust your savings as you can. In 2023 the employee contribution limit has been increased from $20,500 to $22,500.
If you are over 50 you can also save an additional $7,500 in “catch up” contributions in 2023. Savers with low to moderate incomes can also take part of their retirement plan contributions as a tax deduction. For example, if you invest $7,500 in catch-up contributions for the next 10 and earn 8%, you could add over $115,000 to your retirement savings!1
With the intensity of the school year behind you—reflect on the positive impact you have on your students and pledge to do something for yourself this summer—we’ll help you bring a fulfilling retirement into focus.
1 Figure derived from SavingsCalculator.org.
The hypothetical example in this article is intended for illustrative purposes only and is not indicative of actual market, index, investment, or financial product performance. Individual results will vary.
Please be advised that this article is not intended as investment, legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstance from an independent tax advisor.
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