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Factors considered while contributing 403(b) Retirement Plan

Posted on: 12th Dec, 2005 04:11 am

I am working for an organization that offers a 403(b) plan. I am in my mid twenties and I have a habit of contributing maximum amount each year to this plan. My current saving plan includes higher studies and travel. What are the factors that I should consider as I evaluate my contribution plan for next year?


Contributing the maximum amount to your 403(b) account while you are in your 20s gives you the opportunity to reach your retirement goals easily.

Most 403(b) plans will allow you to borrow against that plan. So you can use the plan to make expenses related to higher education or travel. Loan limits are equal to half the account balance with the minimum amount being $5,000 and a maximum loan of $50,000. The loan should be repaid within five years unless you have borrowed the loan amount to purchase a home.

Posted on: 12th Dec, 2005 04:19 am
Hi Nancy,

Jerry has given you very good information. I just want to give you a piece of advice.

In case you are contributing $14,000 to your 403(b) plan account this year, you should divert a part of that amount into a Roth IRA account. The contribution to an IRA is made with after-tax dollars but the income on qualified distribution is tax-free. Keeping aside a part of your finance in a Roth IRA gives you the flexibility to withdraw funds as a first-time buyer much before you retire. You can also withdraw contributions after 5 years, that too, without paying the 10% penalty.

Review IRS Publication 590, IRA or consult with your tax advisor to make sure that you are eligible to contribute to a Roth IRA.

Posted on: 12th Dec, 2005 04:25 am
Can you continue to pay into account after retirement?
Posted on: 17th May, 2008 11:40 am
Can contributions continue from self after retirement if No employer contributions were ever made?
Posted on: 17th May, 2008 11:41 am
Hi Carol,

Welcome to the forum.

I think you cannot continue to contribute to your 403(b) plan after your retirement.
Posted on: 19th May, 2008 03:04 am
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