403 (b): Creative Financial Group & Kades-Margolis Corporation

If you are interested in 403 (b) plans, please contact your Financial Advisor directly to receive additional information and start your retirement contribution for the upcoming year!

• Creative Financial Group: 610-952-2412
• Kades-Margolis Corporation: 800-433-1828 X 155

What is a 403(b) Tax Sheltered Account?
403(b) Tax-Sheltered Account (TSA) is a section of the IRS Code that permits the establishment of 403(b) TSAs for school employees to supplement their retirement income. A 403(b) TSA allows you to voluntarily set aside money from each paycheck to be put into a tax-deferred account. It’s called an “elective deferral”; you notify the payroll office that you wish (“elective”) to have funds taken out of your pay (“deferral”) and contributed to your 403(b) TSA. 

When can I get my money from my 403(b) TSA?
In addition to loans and hardship distributions, a 403(b) plan may allow employees to withdraw money from the plan when they reach age 59 ½ or are separated from service in the year they turn 55 or older. In most cases, any withdrawals made from a 403(b) account are taxable in full as ordinary income. Most withdrawals are subject to 10% additional tax if they are made before age 59½.

Why should you participate in a 403(b) TSA program?
First, It reduces your current income taxes. It is the first tax shelter that nearly every tax professional recommends.
Second, It provides for tax-deferred growth. Instead of paying income taxes on your bank interest earnings, all your contributions and the earnings on those contributions are tax-deferred until you take out the money. That will usually be after retirement, when you will most likely be in a lower tax bracket.
Third: It supplements other retirement benefits, like personal savings, Social Security, and the PA Public School Employees Retirement System (PSERS). Given the budget shortfall of Social Security and Medicare, who knows if any of us will get all the Social Security we are entitled to? And even though PSERS is one of the best retirement systems, you still will have to live on the amount of that check from PSERS for the rest of your life.