Tax Sheltered Annuity Plans: 403 (B )Plans

It is a great feeling to know that you have invested in a retirement program in which you can sit back and relax as you grow older. After working for many years, your desire is not to continue struggling to survive or have someone else take care of you. There are tax sheltered annuity plans, authorized by the IRS 403 (B) code, which are designed for retirement income accounts investing in annuities.

There are substantial benefits of having a tax sheltered annuity. These benefits include not paying on allowable contributions in the year they are made. The contributions of your retirement annuity plans are either excluded or deducted from your income. Another benefit is earning and gains are not taxed until they are withdrawn. And finally, you may be able to take a credit for elective referrals contributed to your account. Only an employer can set up tax sheltered annuity plans.

A portion of your income for retirement can be invested on a pre-tax basis. Among the options of the tax sheltered plans, are mutual funds, in addition to fixed and variable annuities. Enrollment in tax sheltered annuities is very easy. The first thing that you must do is select an investment company that will fit your needs. Second, you will need to contact the company and get an enrollment packet. The last step involved will be to submit a salary reduction agreement to your staffs' benefits office. The salary reduction agreement authorizes the employer to withhold part of your salary from your paycheck. The company you select cannot except your contributions until you open up an account.

Employers who purchase tax sheltered annuity plans enable employees to contribute tax-free dollars to a retirement plan. Annuities are really worth considering because your retirement can be greatly supplemented. In addition to supplementing your retirement, you can also use annuity plans as a back up in case of an un-expected family hardship.

Remember, when money is withdrawn from tax sheltered annuities, it is reported as income for tax purposes. The tax impact is usually not that bad if you withdraw around the age of 65. This is the age when income is usually less. It is a wonderful feeling to know that you have more than just a social security or pension check to look forward to. Source: Annuitiesinc dot com, Louis Zhang