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403(b) / Roth 403(b) Accounts

If you are employed by an educational institution, hospital, or certain other not-for-profit organizations, you may have the opportunity to invest in a tax-advantaged retirement program known as a 403(b) plan. By making regular contributions to a 403(b)/TSA account, you have a convenient means to enhance your retirement savings as you work toward building your financial future.

How do 403(b) plans operate?

  • Your employer determines the provisions of the plan, including investment options and optional plan features such as the ability to defer to a Roth 403(b) or take a loan.
  • You decide how much you wish to invest each pay period, how your contributions will be allocated among the available investment options, and later, how your assets will be distributed.
  • The Legend Group advisor, through Lincoln Investment, establishes the plan in accordance with your employer’s instructions and directs your contributions to the appropriate investments. When you are eligible to begin withdrawing from your account, Legend can assist with the distribution of your funds as you advise.

403(b) Plan Investment Options

Legend can assist §403(b) plan participants on selecting and holding investments from multiple mutual fund families in one account. In addition, through Lincoln Investment, Legend advisors offer fixed and variable annuity options.1 This means you can build your portfolio with a selection of nationally recognized mutual funds and/or annuities, all offered through a single investment provider—Lincoln Investment. What’s more, this only requires the establishment of one investment provider agreement.

Traditional 403(b) accounts vs. Roth 403(b) accounts

  • With a traditional 403(b), contributions are made via pre-tax payroll deductions, and both contributions and investment earnings are treated as tax-deferred until withdrawal.  Withdrawals are taxed as ordinary income in the year received. *1
  • Some employers also offer Roth 403(b) accounts, providing participants with the option to build tax-free retirement income. While Roth 403(b)s are funded with after-tax dollars, these accounts may grow tax-free, and all qualified withdrawals are tax-free. *2
  • Contributions may be made to a Roth 403(b) account in addition to, or in place of a traditional 403(b) account, and your maximum annual contribution limit may be divided between the two accounts in any manner you wish.

Professional Portfolio Management

Lincoln Investment offers professional portfolio management services to a range of investors, from teachers to small business owners to large corporate entities. Whether you have five thousand or five million dollars to invest – each client has their own specific needs, tolerance for risk and long-term goals.

Lincoln Investment provides diversification, asset allocation techniques, professional investment selection and ongoing investment management through actively managed portfolios with objectives that range from conservative to aggressive. The portfolios are monitored regularly and reallocated as deemed necessary in an attempt to capitalize on potential market opportunities and minimize the impact of market downturns. With Lincoln Investment, investors may pursue their goals through various asset management strategies. Your financial professional can guide you in selecting the strategies that are best suited to your needs, based on investment objectives, risk tolerance, investment time horizon and financial status.

1. Distributions from a traditional retirement account are subject to ordinary income taxes in the year distributed. Distributions prior to age 59½ may incur an additional 10% penalty.
2. In order for the Roth §403(b) account to be distributed tax-free, it must be funded for a minimum of five years and the account holder must have attained age 59½. A participant would also qualify for tax-free distributions if the account was held for five years and the account owner became disabled (under the strict definition of disability of §72(p) of the IRS code). Furthermore, in the event of the account holder’s death, beneficiaries would receive tax-free distributions if the account was held for at least five years. Otherwise, the distribution would be treated as part return of principal and part taxable earnings. A 10% premature withdrawal penalty may apply to the earnings.

Diversification does not assure a profit or protect against market loss.

All investment options are subject to employer approval.

Before investing in a mutual fund, consider its investment objectives, risks, charges and expenses carefully. The prospectus, which contains this and other information about the mutual fund, can be obtained by contacting The Legend Group. Please read the prospectus carefully before you invest or send money.