Solutions 4 Financial Independence: 11/06/18

Published: Nov. 5, 2018 at 10:05 AM EST
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QUESTION: I am a teacher and have a TSA account. Is that some type of retirement plan?

JOHN HALTERMAN: Teachers do have a special type of retirement that they are eligible for, and it's technically under the regulation 403B, which stands for tax sheltered annuity. It gets a little confusing, because of the name, “TSA.” A lot of times, people just think that that's an annuity, in all actuality, that is an account that teachers, nonprofits and hospital organizations qualify for under the code, that allow them to put money in on a pretax basis, very similar to a 401k. Now, in Harrison County, it’s a voluntary plan, what that means is, when you put money into it, you will get a tax deduction. The county themselves, do not make any matching contributions, the money grows, tax deferred, then when you go to retire and take money out of it, it's going to be taxable to you. So, definitely it’s something valuable to your future. I'm glad you asked that question, because we all need to know exactly what we have when it comes to preparing for our future.