One of the benefits available to you through the Nevada System of Higher Education (NSHE) is the ability to voluntarily save for retirement on a before-tax basis through a Tax-Sheltered Annuity (TSA), which is also called a 403(b) plan.
A contribution to a TSA plan is an excellent way to supplement your retirement savings. Contributions are deducted from your salary automatically, either on a pre-tax basis or an after-tax (Roth) basis. If you choose a pre-tax deduction, your current taxable income is lowered by the amount of your deferral, and you will pay income tax on your withdrawals at retirement. If you choose the after-tax (or Roth) deduction, then as long as you are age 62 and your account has been active for five years or more when you access the funds, your withdrawals may be tax-free.
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) allowed for annual increases in the amount you may tax-defer for retirement. For tax year 2024, most individuals will be able to defer up to $23,000 in a tax-sheltered annuity plan. And if you are age 50 or older, you may be able to contribute an additional $7,500.
NSHE's Tax Sheltered Annuity 403(b) Plan is Provided by the Teachers Insurance and Annuity Association of America (TIAA):
Meet with local TIAA advisor virtually
Pre-register to meet with the University's financial advisor from TIAA on the third Friday of every month at 10 a.m. to ask questions about your plan.
If you are already participating in a TSA plan, and wish to change your deferral amount, you will need to change your deduction per paycheck in Workday. If you wish to begin a TSA you will need to change your deduction per paycheck in Workday and an application for TIAA.
Voluntary 403 (b) retirement plan limits
| Plan | 2023 limits | 2024 limits |
|
NSHE Tax Sheltered Annuity 403 (b) Plan (402g limit of elective deferrals) |
$22,500 | $23,000 |
|
Catch-up deferrals for participants age 50 or over |
$7,500 | $7,500 Additional |
Other considerations
You may wish to defer beginning your retirement income. However, you should be aware that there are federal minimum distribution rules, which require you to receive some income from your retirement plan contributions and earnings.
Minimum distribution laws
- Federal minimum distribution rules require that you begin receiving income from your retirement plan by April 1 after the year you either (1) reach age 72 (73 if you reach age 72 after December 31, 2022), or (2) retire, whichever comes later.
- Once you begin minimum distributions, you must continue to receive income each year thereafter to satisfy these rules. You are responsible for beginning minimum distributions; your investment carrier(s) can provide you with guidance.
- If you do not comply with these rules, you could become subject to a 50% excise tax on your minimum distribution.
- If you are of sufficient age to begin minimum distributions, you may wish to select the minimum distribution payment option as your payment option. This option may be appropriate if you want to maximize income deferral and preserve your accumulation, you have other income that is adequate for your basic income needs, or you want to postpone selecting an annuity or other distribution method.
Please consult with your 401 (a) investment carrier(s) to obtain more information.