When you participate in the Retirement Investors' Club (RIC) 403b Program, pretax contributions (in the amount you choose) are automatically made to your 403b account through salary reduction. Deductions from your paycheck are made before state and federal income tax. The number of deductions taken per year as well as the number of payroll changes allowed in a year is established by your employer. Ask your employer if your plan also allows post-tax Roth contributions to a 403b Roth account. See 403b Roth Summary for more information.
The minimum amount you must contribute to participate in the 403b is established by your employer. The IRS 403b maximum contribution limits are declared annually.
Terminating employees may have the option to defer sick and vacation pay from their last paycheck up to the IRS maximum limit.
All pretax contributions and earnings stay tax deferred until you take the money out as income anytime after terminating from this employer.
Salary reduction options
If you are paid more than once per month, ask your employer if you have the option to have your total monthly deduction taken from your 1st paycheck of the month (12 deductions/year), the 2nd paycheck of the month (12 deductions/year), or equally divided between the 1st and 2nd paycheck each month (24 paychecks/year).
Retiring or terminating employees have the option to defer unused vacation pay and qualified unused sick pay up to the IRS maximum limits.
Changes to salary reduction amount
If you wish to change your salary reduction amount, ask your employer how often changes are allowed. To change your salary reduction, please complete the RIC Salary Reduction Form.
Age 50+ Limit
Participants age 50 or turning age 50 or older this calendar year, may contribute an additional amount known as the age 50+ Limit. The age 50+ limit is automatic due to your age. Closer to retirement, if qualified, you may have the ability to save over the IRS regular limit by taking advantage of the 15-year special catch-up limit.
15-Year Special Catch-Up
Closer to retirement, if qualified, you may have the ability to save over the IRS regular limit by taking advantage of the 15-year catch-up limit. Qualification for utilizing the special catch-up requires employment with your current employer for 15+ years and a past contribution average of less than $5,000 per year.