What is a 403(b) tax-deferred variable annuity?
A 403(b) tax-deferred variable annuity (TDA) is a voluntary retirement program available to employees of public schools and 501(c)(3) tax-exempt organizations under Section 403(b) of the Internal Revenue Code. It provides an opportunity to use pretax dollars for retirement planning. Through a 403(b) plan and its current federal income tax advantages, you can set aside part of your pay through salary reductions and invest those pretax dollars in one or more investment options. As its name suggests, you don’t pay federal income tax on the salary you defer or any investment earnings until you receive the funds. This lowers current income taxes and helps any investment earnings grow faster. When you do begin receiving funds, usually at retirement, you may be in a lower tax bracket, which could further lower your tax payments. Note: Opportunity Plus also offers a Roth 403(b) option, which allows for after-tax contributions to the plan. Your employer must elect to make the Roth 403(b) availa