Retirement Planning

You have many options when saving for retirement, including plans offered through your employer and individual plans that you can establish on your own.

Tax-Sheltered Accounts (TSA)/ 403(b) Plans

If you are an employee of a school district or other non-profit organization, a Tax Sheltered Account (TSA) — more commonly known as a 403(b) plan — is your primary retirement planning vehicle. A 403(b) plan allows you to save pre-tax earnings for your retirement, which effectively lowers your income tax burden, and to invest those savings on a tax-deferred basis, which effectively enhances the compounding effect to your savings over time.

Roth 403(b) Plans

Effective January 1, 2006, employees of public school districts, community colleges and other non-profit organizations have an additional way to fund their retirement: the Roth 403(b). Roth 403(b)s work just like a Traditional 403(b) with one important difference: Roth 403(b) contributions are made using after-tax dollars. Although Roth 403(b) contributions won't reduce your current income tax liability, they will provide a tax-free income source at retirement (monies must be withdrawn after age 59½ and the account must have been in existence for at least five years).

Individual Retirement Accounts (IRAs)

Saving for retirement, using plans not offered in your workplace, is best accomplished through an Individual Retirement Account (IRA):

• Traditional IRAs offer qualified investors the ability to deduct contributions (up to the current annual limits) from their federal income tax returns and to invest their savings on a tax-deferred basis.
  
  
• Roth IRAs are funded with after-tax dollars (not tax-deductible) and offer tax-deferred growth and tax-free withdrawals of qualified earnings upon retirement.

A Lincoln Investment financial representative can help you understand the many retirement planning options available so that you can take full advantage of these opportunities.