Pre-tax versus Roth TSA Contributions
The UW Tax-Sheltered Annuity (TSA) 403(b) Program offers great options to save for your long-term goals. With most UW TSA providers, you can contribute on a pre-tax basis, Roth (after-tax) basis, or a combination of both.
With pre-tax contributions, current taxable income is reduced, and both principal and earnings grow on a tax-deferred basis. When funds are withdrawn, it is taxed as regular income in the year you receive it.
With Roth (after-tax) contributions, the contributions are included in taxable income in the year you make them, but the account balance and earnings are not taxed when you take a qualified distribution. A distribution is qualified if you made your first Roth contribution at least five years before the distribution date, and you are at least 59½ years old.
Wondering which you might benefit from most? Watch this short video: Pre-Tax vs. Roth (After-Tax) Contributions.
Start saving today! You can contribute a percent of your pay or a flat dollar amount. The easiest way to enroll is to submit a completed EZ Enrollment to your human resources office. To enroll with Ameriprise or Lincoln, you will need to work with a representative.
Want to learn more about the program? Visit the UW TSA Program web page. You can also attend the Select, Sign Up and Save webinar on Thursday, April 15, by visiting the Education section. Check out the other education webinar, video, and group seminar opportunities.
Source: UW System Office of Trust Funds