403(b) Retirement Plans

The 403(b) Advantage

Employees who work for tax-exempt organizations may have an opportunity to invest for retirement through a 403(b) plan. Named after a section of the Internal Revenue Code, a 403(b) retirement savings plan offers significant advantages not found with other investments. In particular, the money you contribute to a 403(b):

• can lower the federal income taxes you pay because your contributions are taken directly out of your paycheck before taxes are paid
• has the potential to accumulate faster because you are not paying any taxes on the earnings in the account until you withdraw them (this advantage is called tax deferral)

By having the money deducted from your paycheck before you pay taxes, you can put more money to work for you than you can on an after-tax basis. For example, a person with a federal income tax rate of 25% wouldn't have to pay $37.50 in current taxes on a $150 investment. The bottom line -- that's another $37.50 available to invest.

Advice Focused On You
For more information on retirement plans call us at 1-800-392-3009 to schedule an appointment with a Financial Advisor near you.

Source: American Funds

People's Financial Advisors is a division of People's Securities, Inc. Investments & Insurance are available through People's Securities, Inc. (member FINRA and SIPC), a subsidiary of People's United Bank.