What is a Tax Deferred Annuity Plan?
- FrankN
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Lexie wrote: I will be very surprised if my children ever see social security. My neighbor is a truck driver and his company just informed all the drivers they are doing away with pension and insurance. Wow! I can't imagine.
Really sad to hear, and I know those are happening to people all over the country.
- Lexie
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- FrankN
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- Goldbug
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I've been in that position and I hated it, because we were both so aware that we were only one medical emergency away from poverty or bankruptcy. We were just over the Medicare limit, but it isn't possible to build up reserves or an emergency fund when every penny is going on basic living costs.FrankN wrote: Which can make saving for retirement next to impossible. My wife's employer recently stopped offering benefits, both health insurance and 401k matching. Luckily we both work so we are okay, but it makes it so much more difficult if your employer is not even contributing anything to your retirement.
- FrankN
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Lexie wrote: So True FrankN. These days a lot of companies are trying to reduce costs by only hiring part time workers. This means they don't have to supply benefits or investment plans. Many folks are on their own when it comes to insurance and retirement.
Which can make saving for retirement next to impossible. My wife's employer recently stopped offering benefits, both health insurance and 401k matching. Luckily we both work so we are okay, but it makes it so much more difficult if your employer is not even contributing anything to your retirement.
- Wanderer
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- Goldbug
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Too true, and it is normally the lower paid workers who see their benefits and their hours slashed, which means that they are the people in the worst positions to pay for insurance or invest for retirement.Lexie wrote: So True FrankN. These days a lot of companies are trying to reduce costs by only hiring part time workers. This means they don't have to supply benefits or investment plans. Many folks are on their own when it comes to insurance and retirement.
- Lexie
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- FrankN
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- Moneyes
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Goldbug wrote: A Tax Deferred Annuity Plan, called a 403b, is one where you pay the money in, and do not pay the tax on it until you withdraw it, usually after you retire.
Hence the term, tax deferred. My job has something like that as well and, you're right, it is a complex thing to be a part of, but it pays well in the end
It lets the funds grow with the benefit of extra seed capital from the money you'd otherwise have paid in tax. It's a really complex topic, and I am not an accountant, so you might find this useful on the differences: http://www.403bwise.com/
Thank you for the link. Going in my bookmarks right next to the Turbo Tax bookmark.
- FrugalFran
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- Breakinger
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- FrugalFran
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Replied by FrugalFran on topic What is a Tax Deferred Annuity Plan?
Breakinger, how does the company contribution work? Are those percentages indicating how they will match your contribution?
- Goldbug
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- Breakinger
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What is a Tax Deferred Annuity Plan? was created by Breakinger
1 year 25%
2 years 50%
3 years 75%
4 years 100%
It says that I can make contributions too, which I want to do, but how much should I invest myself?