Payroll

One of the best ways to save for retirement is contributing pre-tax dollars into a company sponsored 401k. Here are some important 401k facts:

• A 401(k) offers tax advantages. Your money has the potential to grow faster in a 401(k) than in traditional, after tax savings.
• The money you put into your 401(k) comes out of your paycheck before state and federal income taxes are calculated. So, you can invest more in a 401(k) than in an after-tax IRA account and saving becomes easy and convenient!
• A 401(k) plan offers a variety of ways to invest – from conservative investments to aggressive equity (stock) funds. This way, you select the level of estimated risk and potential return of your savings.

• If you participate in an employer’s 401k, your employer may match your own contributions. This means they’ll put in additional money for every dollar you save, up to a certain amount.
• Depending on your plan, you may be able to take hardship distributions from your 401(k) savings to help pay for a new first time home purchase, educational expenses, or financial emergencies. Some plans also allow loans.
• If you leave your current employer you can take the money you contributed to your 401(k) savings plan with you and roll it over into a new account.

Less people are familiar with these types of plans. Under a 403(b) tax-deferred retirement program, you can make pre-tax contributions to a tax-sheltered annuity contract or custodial account through a salary reduction agreement, which means that your contributions are deducted from your salary before federal income taxes are calculated. It’s helpful to know that:

• You decide, within certain legal limits, how much of your income you want to save and invest.
• Your employer will reduce your paycheck by that amount before federal income taxes are taken out.
• Contributions are invested in your choice of any combination of investment options offered.

• Contributions and any earnings that accumulate over the years generally are not taxed until you receive them, which is usually at retirement when you may be in a lower tax bracket.
• Your 403(b) tax-deferred retirement program has no effect on Social Security. Your Social Security contributions and benefits will be based on your total pay, including the amounts paid into your 403(b) tax-deferred retirement program.
• Insuraty offers 403b plans through our preferred providers.

Insuraty offers other financial products. Annuities, long term, tax-deferred insurance contracts typically used to provide a stream of income over a period of time, are one example. There exists a variety of annuity options, ranging from annuities that allow the opportunity to participate in stock market Index growth, premium bonuses, or both. These annuities offer the safety and guarantee of a fixed interest, which is particularly comforting for today’s investors.

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