THE SECRET YOUR EMPLOYERS NEVER TOLD YOU ABOUT YOUR 403(B) TDA RETIREMENT PLAN
Looking forward to retiring? You're diligently having your paycheck reduced each payday to contribute to your 403(b), commonly known as a Tax Sheltered Annuity, with the hope of someday retiring comfortably. When you enrolled, your employer told you of the investment choices, which they had selected for your retirement savings plan, which were the only choices available to you. Right? WRONG!
Millions of employee's with 403 (b) retirement plans can transfer their accumulated savings to another self-directed plan with the guidance of professional management. You can make the transfer even though you remain actively employed in your current job and although the new program is not on the approved list of your employer. It's almost the same process as transferring an IRA. Yet, few financial planners, accountants or human resource professionals realize this opportunity has existed since 1993.
The 403(b) plan, known by the section of the tax code that authorizes it, is a tax-deferred retirement plan similar to the 401(k) plans that are quite popular among corporate employers. In both cases pre-tax money is withheld from an employee's paycheck and placed in one or more investment choices selected by the employee from those allowed by the plan. Unlike traditional pension plans which promise a certain defined-benefit, the money available at retirement to a person with either a 403(b) or 401(k) plan depends on how well the employee manages the money and the quality of the available investments.
As a teacher with a 403(b) plan, you have a big potential advantage over people with 401(k) plans. You can transfer the accumulated savings in your plan, even without the employer approval, so long as your employer has not contributed money to the plan. In contrast, employees with 401(k) plans cannot transfer their money anywhere until they change jobs, retire, or are deemed to be permanently disabled.
Why is it possible for you to do this when your 401(k) counterpart cannot? Effective since January 1, 1993 Internal Revenue Ruling 90-24 states that an employee can transfer the accumulated savings from their current 403(b) program outside of the existing employer approved vendor list. This is an extremely powerful option that is not very well known. This strategy does not constitute a taxable distribution and all the funds continue to remain tax deferred. A self-directed plan allows you to design the investment portfolio of your choice, not your employer's.
Why consider this option?
Unlimited Investment Choices- You can invest in individual stocks, bonds, treasury securities as well as a universe of thousands of mutual funds.
Diversification- Critical to a sound investment program, studies have shown that a portfolio with proper asset allocation utilizing Modern Portfolio Theory may help to reduce the level of risk associated with your investment holdings. Most employer options do not reflect the full range of investment classes necessary to create a balanced portfolio.
Professional Management- Do you have the time, desire and/or experience it takes to manage this money, which is so critical to your financial future? Who did you have to advise you during the market decline of 2000/2001? If you are like most participants, your salary deductions continue to be invested in the same choices you made when you first set up the plan, without regard to ongoing changes in the economic environment.
Our role is to help you secure a solid financial future by assisting you in the formation of a sound investment program tailored specifically to your needs with our Prime Asset Management (PAM) program.
*All teachers who will be considering utilizing IRS revenue ruling 90-24 would meet with a Chestnut Planner to thoroughly discuss their retirement goals and objectives, and how the PAM program would be suitable. | 
