Benefits: Tips on saving for retirement
One of the benefits available to you through the Nevada System of Higher Education is the ability to voluntarily save for retirement on a before-tax basis through a Tax Sheltered Annuity 403(b) and/or a 457 Deferred Compensation Program.
A contribution to the Tax Sheltered Annuity 403(b) or the 457 Deferred Compensation program is an excellent way to supplement your retirement savings. Contributions are deducted from your salary automatically; thus your current taxable income is lowered by the amount of your deferral.
As an employee of the Nevada System of Higher Education you can participate in one, or both, of these programs, thus giving you the opportunity to tax defer $31,000 annually, or $41,000 if you are over 50.
Comparison of Plans*
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*This comparison is provided for reference only. You should refer to the Plan Document prior to enrolling for either program.
** In-service withdrawals are subject to a 10% premature distribution penalty unless an exemption applies
*** A 10% premature distribution penalty does not apply to withdrawals, other than withdrawals from a non-457 rollover account.
Changes in contribution limits for 2007
The Internal Revenue Service announced recently the following contribution limits for this year:
403(b) & 457 Plans:
| Limits | 2006 | 2007 | Pre-tax Elective Deferral | $15,000 | $15,500 |
| Age 50 & Over Catch-up | $5,000 | $5,000 (no change) |
The amount you can defer in 2007 may be higher if you fall into either of the following categories:
- You have worked the equivalent of 15 or more full-time years with the Nevada System of Higher Education. If this applies you may be eligible to defer an additional $3,000 over and above your 2007 limit.
- You are retiring in 2007.
If either of these describes your situation, and you wish to defer additional monies over your regular limit, you should contact your plan sponsor who will prepare a worksheet that demonstrates your maximum allowable contribution for the year.
Getting started
If you are not currently participating in a voluntary retirement plan and wish to start participating in either the Tax Sheltered Annuity 403(b) or the 457 Deferred Compensation Program please contact the Benefits Office for the applicable voluntary retirement packet. The packet includes the plan document and sponsor information; you should review it thoroughly prior to signing up for either program.
Making changes
If you wish to change the amount you are currently contributing to the Tax Sheltered Annuity 403(b) or the 457 Deferred Compensation Program to take advantage of the increase in contribution limits, you must complete a change form and return it to the Benefits Office.
To download a form from the Human Resources website, click on Forms, Benefits, and select the appropriate form. Alternatively, the following links will take you directly to the form.
To make a change to your 403(b) contribution click here.
To make a change to your 457 contribution, click on one of these links:
If you have any questions regarding either program please contact the Benefit Office at (775) 784-6845.
Debbie Olson, the director of Business Center North Human Resources, can be reached at debrao@unr.edu.
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