The 403(b) plan allows you to save extra money for retirement.
All university employees (full-time, part-time, hourly, or temporary) are eligible to participate in a 403(b) plan.
Contributions to the Plan can be deducted on a pretax basis from your paycheck or on an after-tax basis [Roth 403(b)
]. Northern Arizona University does not match your contributions.
The contributions are deducted from your pay before income taxes are taken out. This means that you may actually lower the amount of current income taxes withheld each period. It could mean more money in your take-home pay versus money in a taxable account. Any earnings on your contributions are tax deferred until you withdraw them from your account.After-tax [Roth 403(b)] contributions
You can make after-tax payroll contributions and withdraw those contributions tax free (subject to the terms of the Plan). Your earnings may also be withdrawn tax free if you have a qualified distribution.* Generally, a Roth contribution may be beneficial if you expect your tax rate in retirement will be higher than it had been during the years you contributed. In the event of either retirement or termination, your earnings can be withdrawn tax free as long as it has been five tax years since your first Roth 403(b) contribution and you are at least 59½ years old.
You may want to consider consulting your tax expert to determine if the pretax or Roth after-tax option is right for you.
You can contribute a minimum of $5 per pay period, up to the annual IRS dollar limit of $17,500 on a pretax and/or after-tax basis. If you are age 50 or older you can make catch-up contribution of an additional $5,500 each calendar year for and annual maximum of $23,000.
You can invest your 403(b) contributions with the following investment managers.
Each investment manager offers a wide menu of fund with different investment strategies.
Enrolling in the 403 (b) plan
You may start, stop or change your contribution amount at anytime through Fidelity netbenefits. Learn how to enroll in the 403(b) plan or change your 403(b) enrollment.
- While you are an active employee, you are not allowed to access your account funds except for the reason of 'Hardship' as defined by the IRS.
- Once you leave the university or retire you can request a distribution of your account from the investment manager.
- Distributions taken before age 59 1/2 that are not rolled over to another qualified retirement plan or IRS may subject to tax penalty in addition to income taxes.
- Contact your investment manager to request a distribution.