Tax Deferred Annuity

Fantastic! We are glad that you are taking a moment to consider the BERS Tax Deferred Annuity Program. How far are you from retirement? Will you be able to retire and have sufficient savings? Remember that in retirement, your income will be significantly less than it is today. You must begin planning now to ensure that in addition to your pension and Social Security payments, you have sufficient savings to maintain your desired standard of living. There are two ways to maintain your standard of living: reduce your expenses, or increase your savings. In retirement, you will still have the following expenses: electricity, gas, telephone, water and sewage, car insurance, food, housekeeping supplies, clothing, transportation, health, entertainment, gifts, home furnishings, pets, personal care products and services, and probably a few others. Rather than cut back on your needs, we encourage you to increase your retirement income today by joining or increasing your contributions to the BERS Tax Deferred Annuity Program (TDA), authorized under section 403(b) of the Internal Revenue Code.

The BERS TDA Program is specifically designed to encourage retirement savings for those in education service. You may choose to make your TDA contributions on a pre-tax basis, on a Roth basis, or a combination of the two. When you make pre-tax contributions, your savings are not taxed now (when you, as an active worker, are likely in a higher tax bracket), but upon withdrawal in retirement (when you will likely be in a lower tax bracket). When you make Roth contributions, these contributions are taxed when they are earned, but with proper planning the earnings may be entirely tax-free.

Regular, consistent contributions, made while you are working, will make certain that you have sufficient monies to meet your retirement needs. If you are unsure about how much you can afford to save, start small with 3% of your gross pay. If you would like to increase your current TDA contributions, you can contribute any percentage of your salary up to 85%. Consider saving more today, to ensure that you retire on a solid foundation! To learn more about the BERS TDA program you can review our TDA Brochure.