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What Is a 403(b) Plan and Why Is it Important?

Have you been told you may be eligible for a 403(b) plan? If you had never heard of it before and want more information, you have come to the right place. 

Basics of the 403(b) Plan

The 403(b) plan, also known as the tax-sheltered annuity plan, is a retirement plan that can be put in place only by specific employees of tax-exempt organizations and public schools, as well as certain ministers. Just some of the many types of tax-exempt employees who are eligible include teachers, librarians, nurses, doctors, and administrators of schools.

It can be in the form of either mutual funds or annuities. Features within this plan are comparable to what you would find with a 401(k) plan.

Employees can set up a custodial account if they want to invest in mutual funds. They also can get an annuity contract that they buy from an insurance company. There also is the retirement income account that may be established for church workers.

Benefits to Having a 403(b) Retirement Plan

One of the greatest things about the 403(b) retirement plan is that funds can be vested over a shorter period than is the case with 401(k) plans. Some of them allow for you to vest funds immediately. 

Another benefit is that any returns and earnings on the amounts in your 403_b) are tax-deferred until you withdraw them. This means that it will not factor into what you owe in taxes. When it comes to a Roth 403(b), the returns and earnings only are tax-deferred if withdrawals are considered to be qualified distributions. Employees who are 50 years of age or older typically are able to make catch-up contributions to their plans.

Depending on the employer, employees may have eligibility to receive matching contributions. An example scenario is that an employer may match funds at 50 percent of the employee’s contribution up to a certain percentage of his or her salary. For an employee who makes $75,000 annually and makes a 6 percent contribution throughout that year, the employer’s contribution would be $2,250 over that year.

All in all, the 403(b) retirement plan is an excellent way to boost your retirement goals. If you want more information about the 403(b) plan and if it is right for you, reach out to AFI Insurance today. Serving the greater Denver, CO area, AFI has been instrumental in helping many individuals make sense of navigating the insurance world.

 

 

What Types of Specialty Insurnace Exist?

Insurance is a varied thing, there are coverages for just about anything you could ever imagine. That being said, knowing what types of specialty policy exist and what you might be able to get covered can help you to make sure you have the right policy. For those in the Denver, CO area, the agents with AFI Insurance can help you to find the perfect specialty policy.

Some of the most common specialty policies have to do with items that you own. You can take out policies for firearms, for jewelry, for collections, and more. These policies are going to cover the price of replacement of these items should they become lost, damaged, or stolen. These policies are often taken out against the value of the item and are going to be based on the appraised value of the item. If you have a collection or have items that are more expensive that what might be covered on a typical home policy, you may need to look into a specialty policy.

There are other types of specialty policies. Another type is umbrella insurance, this covers just about anything on top of policies that you already have in place. Still another policy you might not think about it event insurance. This is going to be insurance to help cover the cost if something goes wrong at the event, if something is damaged, or if the event is canceled for any particular reason. It is important that if you have any sort of specialty insurance you might be thinking of taking out, that you take the time to talk with an agent about what policies are available.

For those in the Denver, CO area, the agents with AFI Insurance can help you to find the right policy for your needs.  

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