COLEMAN FINANCIAL SERVICES

CONNECT

Address:

433 Callan Avenue, Suite 205
San Leandro, CA 94577

Phone:


Office: 510-667-0804
Cell: 510-282-6080
Toll Free: 866-459-9825

Fax/Other:

510-614-9213

Retirement Plan

[ 403(b) ] [ SEPS ] [ ROTH IRA ]

403(b) Tax Shelter Annuity (TSA)

 

Question:

What is a 403(b) Tax Shelter Annuity (TSA)?:

Answer:

It is an annuity that is issued by an insurance company that is designed for people who work for public school districts or non-profit organizations described by Internal Revenue Code as 501(c)(3).

Question:

What does a Tax Shelter Annunity, TSA mean?

Answer:

Tax Shelter Annuity means that all earnings that you make on your contributions are tax deferred until withdrawn.)

Question:

How will a TSA reduce the current amount of income tax I pay?

Answer:

The money you contribute into a Tax Shelter Annuity is not included in your taxable income for federal income tax purposes. The interest you earn on this annuity is not taxable.

Question:

Does my annuity offer loan provisions?

Answer:

Yes, this annuity allows you to borrow up to 50% of your surrender Value. However, the IRS does require a loan to be repaid back over a certain period of time with exception of a home loan. The exception is that the IRS allows a person a longer period to pay off the loan.

Question:

Does my annuity offer a penalty-free withdrawal?

Answer:

Yes. After you have had your annuity for a year, you can withdrawal 10% of your account value without a surrender charge from the company. The IRS does impose restrictions on withdrawals and premature distributions.

[ 403(b) ] [ SEPS ] [ ROTH IRA ]

Simplified Employee Pension Plans (SEPS)

Features of SEP Plan:

Employer Eligibility

  • Self Employed Person
  • Partnerships
  • S-Corporations
  • C-Corporations
  • Non-Profit Groups

Contributions

Employer makes contributions of about 25% of eligible employee’s compensation or $40,000. These contributions are excluded from your taxable income. Also, the interests you receive on these contributions are tax deferred until withdrawn. Just image how much you would have in 10 years if you were able to save $20,000 or $40,000 a year towards your retirement.

Administration

  • No IRS Form 5500 filings
  • Employer completes plan document and distributes notices to interest parties, if applicable

Employee Eligibility

21 years or older and has worked three of the proceeding five years and has received $450,000 for the year.

[ 403(b) ] [ SEPS ] [ ROTH IRA ]

Roth IRAs

Eligibility

You may contribute to a Roth IRA, if you are single and have adjusted gross income (AGI) less than $110,000 or file a joint return and have an AGI of less than $160,000.

The significant features of the Roth IRA

  • A person can enjoy tax-free growth on his or her non-deductible contributions
  • Tax-free withdrawals are allowed if a person has had his plan for five years and certain conditions are met, such as:
    • The owner attained age 59 ½
    • The owner uses the distribution for the first-time home purchase
    • $10,000 lifetime limit

This is a great plan or an individual who wants to have tax-free income at retirement.

[ 403(b) ] [ SEPS ] [ ROTH IRA ]