There's some good news on the financial front as the Federal Government has raised next year's maximum contribution to 401(k) plans to $18,500. That is a $500 dollar increase from this year. If you are 50 years of age or over, the federal government allows for "catch up" contributions of $6,000 dollars for a total maximum contribution of $24,500 dollars.
Our TDA is a cost efficient 403(b) plan and the same rules apply as for the 401(k) plans when it comes to the maximum contribution and "catch up" funds. Therefore, expect the TDA to raise the maximum contribution limit by the same $500 dollars.
Depending on your age, the maximum contribution limits are as follows:
Age.......................Maximum Contribution
under 50...........................$18.500
50 or older........................$24,500
Just a reminder. We will be getting a raise (3%) in May and another 2% in June. A good rule of thumb is for every raise, you should increase your TDA contribution by 1%. Moreover, the TDA is tax differed and until age 70.5 it continues to appreciate tax free, until the Required Minimum Distribution kicks in.
For more information go to TRS online and my article on the TDA.
Mulgrew mentioned that retirees would get their retro money on 10/19. Has anyone seen it deposited in their banks yet?
ReplyDeleteyes
ReplyDeletehttps://www.chalkbeat.org/posts/ny/2017/10/19/the-entire-staffs-at-two-troubled-new-york-city-high-schools-must-reapply-for-their-jobs/ Ummmm ? Here comes more atrs
ReplyDeleteThere's also a catch-up for employees who have at least 15 years of service which allows you to contribute an additional $3000. So my total contribution is $27,000.
ReplyDelete5:08 p.m.: I see a deposit that is not the same amount as my regular pension payment, appearing today. I'm thinking it is some retro money.
ReplyDeleteHow much retro money are we supposed to get anyway?
ReplyDeleteYes. It was desposited? Mine wasn't.
ReplyDeleteWe can contribute a total of $36,000 or $48,000 if 50 yr. or older. tax deferred.
ReplyDeleteThe NYC Deferred Compensation Plan is superior to the TDA because it offers after-tax (ROTH) option.
TDA doesn't have ROTH option, therefore when you turn 70, you will start to pay taxes on the TDA each year. Your beneficiaries will be heavily taxed when they inherit your TDA. Choose the Roth 457 and Roth 401k and you can avoid taxes when you are over 70.
Check out the NYC Deferred Compensation Plan, no more TDA.
Roth, Roth, Roth!!!
Chris:
ReplyDeleteYou are so right about that.
Anon 10:18:
Where did you get that #3,000 for 15 yeas and $27,000 total TDA contribution?
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-403b-contribution-limits
ReplyDeleteThe 15 year rule is called a catch-up. I believe that in addition to being a public employee for 15 years you must also have started contributing later on as well. I've been contributing for10 years and in the last 2 years I've been allowed to contribute $27,000. I am over 50.
Now we need the TDA fixed fund to be raised from 7% back to 8.25%. IF Janus is successful with the US Supreme Court then I'll gladly stop paying UFT dues until I see results. The CSA administrators continue getting the 8.25% amount. Remember if you stop paying dues, your welfare fund package is still intact because the city pays for this.
ReplyDeleteEvery city employee has welfare fund benefits paid for by the city and not the union.
Chaz, you can be putting $60,000 for your final 3 years. Tax Deferred!! You will never be subjected to RMDs and you nor your benaficiaries will be pay future taxes.
ReplyDeleteWhy aren’t you telling everyone about the Roth 457 offered through the NYC deferred compensation fund?
Republicans plan on limiting 401(k) contributions to pay for tax cuts for rich people and corporations:
ReplyDeletehttps://www.nytimes.com/2017/10/20/us/politics/republicans-tax-401-k.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
Contribute while you can. This plan, like the health care plan, is being developed in secret and will be put out there for a quick vote. If it happens, it's pretty much the end of our TDA benefits, since it would limit yearly contributions to $2400.
Any decrease in retirement option is irresponsible, most Americans are behind on retirement savings. However, this decrease will only effect pre-tax retirement plans, not Roth. They want as much taxes from your paycheck to pay for tax cuts now. With Roth you do pay tax now but you and your beneficiaries will never pay taxes again on it.
DeleteThis may be the best thing for the TDA because it would force them to finally start offering a Roth option for TDA.
The GOP really just want everyone to be poor and desperate.
ReplyDeleteThis Republican proposal to limit 401k and 403b contributions [as part of the tax cut plan] is another horrible attack on the middle class and must be opposed at all costs. Sadly the 18,000 limit [which could be higher] is set by the Federal govt not states. Lowering this would be very bad - the IRA limits are already low too.
ReplyDeletePresident Donald Trump tweeted Monday there will be no change to a popular retirement savings plan under the new GOP tax bill.
ReplyDelete"There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!" Trump said in a tweet.
I been reading that I can transfer my city 457 to my TDA.
ReplyDeleteMaybe if I had a roth 457 I can transfer it to my TDA.
Please check for accuracy of both statements above because
I learning about retirement.
To 3:35PM
ReplyDeleteYou cannot transfer a ROTH to IRA or TDA.
ONLY a Roth to a Roth. Also Roth you pay no taxes
to an account that pay taxes.
But it is good news to transfer 457 to TDA and
TDA to 457 or Roth 457 (and pay taxes).
You can not transfer any money from another retirement plan into your TDA. You can transfer your '457' into a 'Roth 457' from the NYC Deferred Compensation Plan.
ReplyDeleteAs usual...knee jerk libtards overreact to trash anything Trump...
ReplyDeleteRe: Differed Comp 457 pretax vs. Roth
ReplyDeletequestion:
Won't I save in the long run if continue to fund 457 pretax? Started out late in 457, so will have about 12 years total of contributions. Been maximizing in TDA since started at the DOE and will have a nice amount given contributions and 7% fixed earnings. Will likely retire in 7-10 years.
Seems that given below, I should just continue to contribute to 457 pretax. Am I missing something?
a. 457 pretax contributions, so currently saving on federal, state, and city tax now.
b. 457 withdrawals subject to all taxes, but allowed $20,000 annual state deduction.
c. If do Roth, then current contributions subject to all taxes. Earnings not subject to tax. Will I earn much in 12 years to make difference?
Thanks,
R