Investment Opportunities
In addition to your primary (required) retirement benefits, you may need to save additional money to have the standard of living you want in retirement. The voluntary SPS Retirement Savings Program offers a convenient, tax-advantaged way to save for retirement.
The program includes a Tax-Deferred 403 (b) Plan and 457 Deferred Compensation Plan.
While not as famous as the 401k, the 403(b) plan is a type of retirement savings account used by most employees of public schools. The benefits of a 403(b) plan are often similar to those of a 401(k) plan. Account holders can take loans against their 403(b) when they are in emergency need of cash. These 403(b) loans must be paid back, just like their 401k counterparts, or there will be significant tax consequences.
403(b) Required Minimum Distributions
Required Minimum Distributions (RMDs) currently begin at age 73 (or 75 if born in 1960 or later).
Required minimum distributions (RMDs) are the minimum amounts you must withdraw from your retirement accounts each year. You generally must start taking withdrawals from your traditional IRA, SEP IRA, SIMPLE IRA, and retirement plan accounts when you reach age 73.
Participants in a workplace retirement plan (for example, 401(k) or profit-sharing plan) can delay taking their RMDs until the year they retire, unless they're a 5% owner of the business sponsoring the plan.
- You can withdraw more than the minimum required amount.
- Your withdrawals are included in taxable income except for any part that was already taxed (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).
Withdrawals from Roth IRAs and Designated Roth accounts (401(k) or 403(b)) are not required until after the death of the account owner. However, beneficiaries of Roth IRAs and Designated Roth accounts are subject to RMD rules.
403(b) Withdrawals
When you reach the age of 59 ½ years old, you can begin taking regular 403(b) withdrawals without penalties - you will simply pay regular income taxes on the money you take out of the account. If you are younger than that age, however, you will be subject to a special 10% tax penalty on top of the income tax unless you meet one of a handful of special situations.