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12 Smart Reasons to Save for Retirement with a Legend §403(b)

The Power of Time – By making regular contributions to your employer's §403(b)/TSA plan, you have the potential to develop a sizeable nest egg over the long term.
Tax Advantages -
Pre-tax Savings – Traditional §403(b)/TSA
By deferring compensation into a traditional §403(b) account, you realize immediate tax savings on your contributions. Before any income taxes are taken out, your paycheck is reduced by the amount you decide to invest. Therefore your total taxable income is less.
Tax-deferred Growth Potential – Traditional §403(b)/TSA
Taxes on any investment earnings in a traditional §403(b) account are deferred as well. This way, you don’t pay taxes on anything that your deferred compensation earns until it is distributed. While withdrawals are taxed as ordinary income, the impact may be minimized as many investors find themselves in a lower tax bracket at retirement.1
Tax-free Growth Potential – Roth §403(b)
While Roth §403(b) contributions are made with after-tax dollars, both contributions and earnings may grow tax-free.
Tax-free Retirement Income – Roth §403(b)
Qualified Roth §403(b) account distributions are tax-free.2
Automatic Payroll Deductions – The amount you decide to defer each pay period will automatically be withheld from your paycheck and deposited into your retirement account.
Built-in Dollar Cost Averaging3 – Since the amount you contribute is deducted from your paycheck at regular intervals, dollar cost averaging is built in to your investment plan. With dollar cost averaging, you buy more shares when prices are low and fewer when prices are high. Over time, the average amount paid (average cost) for each share may be less than the average price per share.
Optional Matching Employer Contributions – Your employer may elect to match a certain percentage of your traditional or Roth §403(b) plan contributions. The amount your employer contributes is money you receive above and beyond your regular salary. If you don’t participate in the plan, or don’t contribute enough to be eligible for the entire employer match, you may not be taking full advantage of your §403(b) benefit.4
A Variety of Investment Options – With a Legend §403(b), you may choose from a wide variety of investment options, including a selection of nationally recognized mutual funds and annuities, and you can change your investment mix as your needs change.
Access to Your Savings – Some §403(b) plans offer a loan provision5 that enables participants to borrow from their account. Under Legend’s loan program, principal and interest are paid back into your account. In addition, your employer’s plan may contain provisions for early withdrawals that allows for restricted access to assets prior to separation from service.1
Account Portability – If you should leave your job, your account can be transferred to another employer’s §403(b) program. You may also choose to roll your traditional / Roth retirement account to an IRA / Roth IRA, or convert your traditional §403(b) account to a Roth IRA. Please consult your tax advisor before initiating such a change.
Catch-up Contributions – The Over Age 50 Catch-up provision allows employees age 50+ to boost their retirement savings by making additional §403(b) account contributions beyond the maximum limits set each year. Furthermore, the Years of Service Catch-up provision provides for additional contributions for §403(b) plan participants with 15 years of service with certain qualified employers.
Access to Professional Investment Management Services – Most §403(b) plan participants have access to professionally managed investment portfolios, with either insurance or mutual fund companies. Through your Legend Group financial advisor, you have the opportunity to participate in Legend Advisory Corporation’s Strategic Asset Management® (SAM®) and SAM® Select services. These programs were designed to make professional asset allocation techniques, investment selection and ongoing investment management available to individual investors. SAM® and SAM® Select offer a range of diversified6 portfolio options that are managed by a team of experienced investment professionals.
Flexible Distribution Options
Traditional §403(b)/TSA
Most employer plans allow §403(b) account assets to be withdrawn without penalty after age 59½ even if you are still employed.1 §403(b) account distributions are mandatory at age 70½, unless you are still employed by the §403(b) employer.
Roth §403(b)
If your employer’s plan allows, Roth §403(b) distributions may begin at age 59½. Otherwise, you may begin distributions once you separate from service.2 Roth §403(b) distributions are not mandatory until the participant's death if the account is rolled over to a Roth IRA.
Guidance from a Professional Financial Advisor – Your Legend Advisor is available to help you as you work toward building your financial future. He or she can answer your questions, work with you to develop a viable investment strategy and assist you in selecting the investment options that may best reflect your needs. Your Advisor can also provide information about your state retirement plan, and offer ongoing guidance as you work to reach your investment goals.
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1Distributions from a traditional retirement account are subject to ordinary income taxes in the year distributed. Distributions prior to age 59½ may incur an additional 10% penalty.

2In order for the Roth §403(b) account to be distributed tax-free, it must be funded for a minimum of five years and the account holder must have attained age 59½. A participant would also qualify for tax-free distributions if the account was held for five years and the account owner became disabled (under the strict definition of disability of §72(p) of the IRS code). Furthermore, in the event of the account holder’s death, beneficiaries would receive tax-free distributions if the account was held for at least five years. Otherwise, the distribution would be treated as part return of principal and part taxable earnings. A 10% premature withdrawal penalty may apply to the earnings.

3Dollar cost averaging does not assure a profit and does not protect against a loss in declining markets. Investors should consider their ability to purchase shares continuously during periods of falling share prices. The principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost.

4While an employer may match traditional and Roth §403(b) contributions, matching contributions may be deposited only into a traditional §403(b) account.

5Defaulting on a loan from a retirement plan constitutes a distribution from that plan. Distributions from a retirement plan are subject to federal income tax and may incur an additional 10% penalty if the participant is under the age 59½. Loans may affect cash values and death benefits.

6Diversification does not assure a profit or protect against market loss.

Legend Equities Corporation and its affiliates do not provide tax information or advice.

Before investing in a mutual fund or variable annuity, consider its investment objectives, risks, charges and expenses carefully. The prospectus for a mutual fund or the policy prospectus and prospectuses for the underlying investments of a variable annuity, which contain this and other information, can be obtained by contacting Legend Equities Corporation. Please read the prospectus or prospectuses carefully before you invest or send money.