If you are a public sector employee or work for a nonprofit organization, chances are you have contributed to a 403(b) or 457(b) retirement plan. These plans are powerful tools for building retirement savings, but what happens when you retire? At Truvale Advisory Group, we help clients navigate the next steps with confidence. Here is what you need to know.
Understanding Your Options
When you retire, you will need to decide what to do with the funds in your 403(b) or 457(b) account. Common options include:
- Leave the Money in the Plan: Some retirees keep their funds in the employer-sponsored plan, but this may limit investment choices.
- Roll Over to an IRA: Rolling over to an Individual Retirement Account often provides more flexibility, broader investment options, and better control over distributions.
- Take a Lump-Sum Distribution: While possible, this option can trigger significant taxes and is rarely recommended.
Required Minimum Distributions (RMDs)
Once you reach age 73 (as of current IRS rules), you must begin taking Required Minimum Distributions from your retirement accounts. Failing to do so can result in steep penalties. We help clients plan RMDs strategically to minimize taxes and maintain income stability.
Tax Considerations
Withdrawals from 403(b) and 457(b) plans are generally taxed as ordinary income. Without proper planning, taxes can erode your retirement savings. Our team designs tax-efficient withdrawal strategies to help you keep more of your hard-earned money.
Coordinating with Social Security and Pensions
Public sector employees often have pensions and Social Security benefits in addition to their retirement accounts. Coordinating these income sources is critical for creating a sustainable retirement plan. We help you integrate all components for maximum efficiency.
Why Work with an Advisor?
Decisions about rollovers, distributions, and tax planning can have long-term consequences. At Truvale Advisory Group, we specialize in helping public sector employees make informed choices that protect their wealth and provide peace of mind.
Ready to explore your options?
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