About 403(b) Plans

WHAT IS A TSA AND HOW CAN IT HELP ME SAVE AND INVEST FOR RETIREMENT?

A TSA or 403(b) program is a tax-deferred retirement arrangement that allows employees of eligible employers to set aside a portion of their pay on a pre-tax basis.  In other words, as you set part of your salary aside in a TSA you are not required to pay current federal income taxes on that amount until you withdraw it.  Also, there are no income taxes on the earnings in a TSA until the earnings are withdrawn, usually at retirement.*

Since TSA were originally intended as a source of retirement income, there are restrictions on withdrawing TSA funds and any earnings before you reach 59 1/2.  When withdrawals prior to 59 1/2 are allowed.  When withdrawals prior to age 59 1/2 are allowed, they may be subject to a 10 percent penalty.  Some exceptions apply.  Ordinary federal income taxes generally apply to withdrawals.  Many plans do, however, include provisions so that you can borrow against your TSA monies.

* States also may allow exclusion of these contributions for state income tax purposes; consult your tax advisor for the rules for your applicable state.

A TSA CAN OFFER MANY IMPORTANT FEATURES:

PRETAX SAVINGS AND THE POWER OF TAX DEFERRAL

By making contributions to a TSA, you can reduce your current income taxes.  How? Contributions to your TSA are deducted before you pay taxes on your salary.  Reducing your current income taxes allows you to save more for retirement.

Also, tax deferral can help your money grown.  Your contributions earn interest and your interest earns interest-- all of which are income-tax free.  I all adds up to the compounding strenght of tax deferral.

A WIDE ARRAY OF FUNDING CHOICES

No two individuals are the same, so MetLife offers you a wide variety of funding alternatives for your TSA.  Whether you're interested in the guarantee of a fixed interest account or in professionally managed stock or bond portfolios, MetLife offers you funds managed by some of the leading financial investment firms in the business.  Whether you're interested in the guarantee of a fixed interest account or in professionally managed stock or bond portfolios, MetLife has a wide selectionof professionally managed funding choices.

IT'S SIMPLE AND CONVENIENT

Automatic salary reduction can make saving simple and convenient.  Once you decide how much to contribute (subject to IRS limitation), money is automatically deducted from your salary and deposited directly into your TSA.

Want to know how a TSA contributions can affect your paycheck? Ask me, Lisa Fulco, for a personalized Paycheck Comparison.

LOAN FEATURES

You may be able to take out a loan from your TSA without paying any tax or penalty.  In many cases, you may borrow up to one-half of your nonforfeitable account balance, as long as your new loan doesn't exceed $50,000 (reduced by your highest outstanding loan balance within 12 months of taking the new loan).  Loans, must of course, be repaid within the limitations specified by federal tax law.  Principal and interest payments must be made on a substantially level basis at least quarterly, and the term of the loan generally cannot exceed five years.

AN INCOME STREAM TO SUIT YOUR RETIREMENT LIFESTYLE

Once you retire, there are many payout options.  They include taking a lump sum, receiving regular periodic payments based on the amount you have saved or receiving regular payments based on your life expectancy.  Whatever you choose, remember that your withdrawals will be subject to ordinary income tax.

HOW MUCH AM I ALLOWED TO CONTRIBUTE TO A TSA?

The maximum amount you may contribute to a TSA is determined by a number of factors, such as how much you make, how long you've worked for your current employer, your contributions to and/or participation in other qualified retirement plans and any amount contribution in prior years.

THE MAXIMUM AMOUNT YOU MAY CONTRIBUTE TO A 403(B) PLAN IS:

MAXIMUM ELECTIVE DEFERRAL LIMITS

                         YEAR 2007           $15,500

                         YEAR 2008            $15,500  (NO CHANGE)

                        AFTER 2008, CONTRIBUTION AMOUNTS WILL BE INDEXED FOR INFLATION IN                    $500 INCREMENTS.

Pursuant to IRS Circular 230, MetLife is providing you with the following notification:
The information contained in this website is not intended to (and cannot) be used by anyone to avoid IRS penalties. This website supports the promotion and marketing of financial services and products. You should seek advice based on your particular circumstances from an independent tax advisor.

MetLife, its agents and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisers regarding your particular set of facts and circumstances.