Which Investment Plan is Right for You?

When deciding on retirement investments, it can be confusing which one is the best for your family. As a governmental entity, GPISD offers a 403(b), a Roth 403(b), a 457(b), and a Roth 457(b) as investment plans to supplement your retirement income. These accounts are funded by your contributions through payroll deductions. Consider an investment plan for your retirement needs.

 

403(b) 457(b)
  • Contributions are tax deferred, that means you are taxed when you begin withdrawing funds
  • Employees can contribute to any of the investment plans, and may contribute to more than one plan.
  • The funds may be rolled into an IRA.
  • The maximum '2016 and '2017 contribution is $18,000.
  • An additional $6,000 is permitted for those age 50 and over as a savings “catch-up”
  • You may access funds once you turn age 59 ½, regardless if you are working.
  • There is a 10% early withdrawal penalty before age 59 ½ unless you meet a qualifying event (ie disabled, hardship).
  • Contributions are tax deferred, that means you are taxed when you begin withdrawing funds
  • Employees can contribute to any of the investment plans, and may contribute to more than one plan.
  • The funds may not be rolled into an IRA.
  • The maximum '2016 and '2017 contribution is $18,000.
  • An additional $6,000 is permitted, for those age 50 and over as a savings “catch-up”.
  • There is no early penalty withdrawal on distributions regardless of age, only if there is a triggering event such as separation of service or early retirement.
Roth 403(b) Roth 457(b)
  • Contributions are made after your wage is taxed, this means you are not taxed when you begin making qualified withdrawals on the deposits you made.
  • Employees can contribute to any of the investment plans, and may contribute to more than one plan.
  • The maximum annual contribution for '2016 and '2017 is $18,000.
  • An additional $6,000 is permitted for those 50 and over as a savings “catch-up”.
  • You may access funds as long as the account has been held for 5 years, and you have reached age 59 ½, are disabled, or upon your death.
  • There is a 10% early withdrawal penalty for non-qualified withdrawals.
  • Contributions are made after your wage is tax deferred, that means you are not taxed when you begin making qualified withdrawals on your deposits.
  • Employees can contribute to any of the investment plans, and may contribute to more than one plan.
  • The maximum annual contribution for '2016 and '2017 is $18,000.
  • An additional $6,000 is permitted, for those age 50 and over as a savings “catch-up”.
  • You may access funds as long as the account has been held for 5 years, and you separated from employment or retire.
  • You cannot withdraw money while you are working unless you have reached age 70 ½ or you will have a 10% penalty.

 

Age 50 Catch Up

Participants age 50 and older at any time during the calendar year are permitted to contribute an additional $6,000 in '2016 and '2017.

Contributions in the listed investment plans may be started and stopped at any time throughout the year.

 

For more information about the investment plans offered, contact Colleen Martin, Director of Employee Benefits at 832-386-1507.