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The 403(b) Savings Plan is a not a typical savings account. It is a completely voluntary retirement savings plan that grows with daily compounding tax-deferred interest and can be turned into lifetime income in retirement. 

Any paid YMCA employee may participate in the 403(b) Savings Plan regardless of age, hours worked, compensation, or length of service. You can enroll at any time (we mean it!). This means you can enroll on your very first day of employment, when you get a raise, or whenever works for you! You don’t even have to wait until your Y’s open enrollment period. 

You choose how much you want to contribute:

• Recurring contributions of a flat dollar amount or a percentage of your pay, or
• A one-time lump sum contribution from your paycheck.

Contributions are made through payroll deduction only, and you may start, stop, or change your future contributions at any time. 

You bet they do! Contributions to the 403(b) Savings Plan grow with daily compounding tax-deferred interest. This means your contributions and the interest they earn continue to generate more tax-deferred interest over time. 

Depending on when the contributions are made, they are guaranteed a rate at which interest is credited—we call it an interest credit rate or ICR—and for a specified period of time, your contributions receive that rate. 

Without getting too technical think of it like this—if the market dips today, your interest rate stays the same. Account balances have never gone down at Y Retirement.

There is no minimum that you have to contribute—save $5 a paycheck if you choose! However, there are maximum limits that may apply to you and it’s important you understand those before making your selections.

There are four accounts in the 403(b) Savings Plan.

The Tax-Deferred Account is a pre-tax account. That means you don’t pay federal taxes on those contributions now because your taxable income is reduced by the amount you contribute. Instead, you will pay federal tax on the contributions and interest earned when you withdraw the money.

The Roth Account is an after-tax account, which means the money is taxed when you make the contribution. You may then withdraw contributions and earnings free from federal taxation in retirement if you are age 59½ or older and the Roth Account has been open for at least five calendar years. 

Learn more about the differences between these two account options.

The final two accounts that make up the 403(b) Savings Plan are the Rollover Account and the Roth Rollover Account. Yes, you can roll retirement savings from previous employers’ eligible retirement plans or IRAs into the Plan, and depending on the type of retirement plan it is, it will be put into either rollover account. You may also withdraw from your Rollover Account, or Roth Rollover Account at any time while employed, though taxes and penalties may apply.