Since a 403(b) can be an important component of your retirement income, in addition to Social Security and other investments or savings, experts recommend taking full advantage of this employer-sponsored retirement plan. Whether you're nearing retirement age or just starting to contribute to your plan, there are key strategies to consider to make the most of your 403(b) benefits.
Q: A 78-year-old employee of our university just retired. He wanted to roll over his entire 403(b) plan balance to an IRA, but our plan's rules prevent rollovers until age 80. What are his options?
For starters, it's essential to look for low-cost funds within your 403(b) plan. High fees can eat into your retirement savings over time, so opting for low-cost options can help maximize your investment returns. Additionally, if available in your plan, consider investing in a target-date fund that automatically adjusts your asset allocation as you near retirement.
I recently had a podcast question from a doctor who has four separate 403(b)s with a match. Here's how he can maximize his retirement savings by consolidating his accounts and taking advantage of the employer match. By streamlining his investments, he can simplify his retirement planning and potentially increase his overall returns.
Summary plan descriptions, or SPDs, for the Johns Hopkins University 403(b) plans are now available on the benefits website. These documents provide important information about your plan, including eligibility requirements, contribution limits, investment options, and distribution rules. Reviewing your plan's SPD can help you make informed decisions about your retirement savings.
403(b)s and RMDs. While your 403(b) contributions grow tax-free while you are working, the government requires you to start taking required minimum distributions (RMDs) once you reach age 72. It's important to understand the RMD rules for 403(b) plans to avoid penalties and ensure you're maximizing your retirement income.
2024 403(b) contribution limits. The maximum amount an employee can contribute to a 403(b) retirement plan for 2024 is $23,000, up $500 from the previous year. By maximizing your contributions, you can take full advantage of the tax benefits and potential growth opportunities offered by your 403(b) plan.
Updated: House Approves Legislation to Allow CITs in 403(b) Plans. The House passed H.R. 2799, Expanding Access to Collective Investment Trusts (CITs) in 403(b) plans, which would provide plan sponsors with more investment options and potentially lower costs for participants. Stay informed about legislative changes that could impact your retirement savings.
The Illinois Senate may vote soon on a bill that would require school districts in the Land of Lincoln that offer their employees a 403(b) plan to provide additional disclosures about fees and investment options. Transparency is key when it comes to retirement planning, so make sure you understand the fees associated with your 403(b) investments.
