403(b) Retirement Plans 

Employees of private companies may turn to 401(k) plans to help build their retirement nest eggs.But what if you’re a school teacher, for instance, or work for a tax-exempt organization, like a non-profit hospital or library? You may have a pension waiting for you at retirement, but a 403(b) savings plan may help provide additional support to reach your retirement goals.

Who’s eligible?

These tax-deferred plans are designed for employees of public schools, colleges and universities, and churches. Employees of certain tax-exempt, non-profit organizations, such as charities and some hospitals, also may participate in a 403(b).

What’s in it for you

Like its better-known 401(k) cousin, a 403(b) lets you put a portion of your salary into an employer-sponsored plan to help you save for retirement. Some employers may also match your contribution.

You don’t pay taxes on what you contribute or any earnings you may accumulate until you withdraw the money –– hopefully, when you’re retired and you may be in a lower tax bracket.

Your investment menu

Unlike 401(k) plans, which may include a wide variety of investments, 403(b)s typically offer fixed annuities, variable annuities,or mutual funds.

Seek professional advice

Check with your investment professional to help you choose investments that best meet your retirement objectives.  Remember that investing involves market risk, including possible loss of principal, and there’s  no guarantee that your investment objectives will be met. 

Know the penalties

Since 403(b) plans were created to help you save for retirement, there may be stiff penalties for taking your money out early. You’ll owe:

• Income taxes on the total withdrawal
• A 10% penalty if you’re younger than 59½
• 20% federal income tax withholding unless the entire amount  is rolled over to another qualified retirement plan or IRA.

Neither Nationwide^® nor its representatives give legal or tax advice, so consult your attorney or tax advisor about tax questions.

Take the next step

Enrolling in your employer’s 403(b) plan is a big step in preparing for your future. You can even start small − the important thing is that you start investing now to give your money time to grow.  

Ask your retirement plan representative about how to sign up. If your employer doesn’t offer a 403(b) plan, see if they have another kind of retirement plan. Or ask your investment professional about other ways to start investing for retirement.

Not a deposit • Not FDIC or NCUSIF insured• Not guaranteed by the institution • Not insured by any federal government agency • May lose value

Life insurance and annuities are issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, Ohio.

Also known as . . .

403(b) retirement savings plans sometimes go by the names:

• TSA (tax-sheltered annuity)
• TDA (tax-deferred annuity)

NFW-1320AO