The world of retirement plans can be a little confusing if you aren’t familiar with the lingo.
First, there are employer sponsored plans. In an employer sponsored plan, the employee has money taken out of their paycheck to put into the retirement plan. The employer may also offer to contribute a matching amount. Different types of employer sponsored plans have different numbers, depending on which IRS code governs them. 401(k) is one type. 403(b) is another type. The main difference between a 401(k) and a 403(b) is that a 403(b) is sponsored by a nonprofit, religious group, school district or government organization.
Next, if you invest outside of your employer, you would use an individually funded retirement plans, or IRA. In an individually funded plan, there is no employer involved. You set up the plan directly between you and an investment company.
Do you have questions about retirement savings? Clergy Financial Resources can help. We offer clergy support as part of our 1040 preparation process, or alternatively as a separate Pro Advisor meeting. For more information, visit our website at https://www.clergyfinancial.com/resources/proadvisor/.
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (888) 421-0101
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com