I'm So Confused About Retirement!

New guest episode with Maude (part 2)

Happy Friday Future Rich Fam!

In our latest episode of Future Rich, host Barbara Ginty continues her conversation with Maude, a 31-year-old nurse practitioner living in Pennsylvania. She and her fiancé have been together for seven years and are planning a wedding in 2026.

In this episode, they discuss...

• Different retirement accounts and the different purposes they serve

• Whether or not Maude and her partner should start a joint account

• A plan for Maude to pay off her student loans to free up cash flow for the future

*This is part two of a two-part episode; part one aired last Friday on 6/13.

Retirement is often an alphabet soup with lots of different acronyms that can make understanding your retirement benefits overwhelming.

It is worth diving into it and figuring it out, and we are here to help. Once you know what you have available to you, it will allow you to maximize the benefits you are being offered! The more you know, the better, because we all want to retire!

Below, we will go through the two plan types we discussed with Maude…

403(b):

A 403(b) is a voluntary retirement plan also referred to as a Tax Shelter Annuity (abbreviated as TSA). Common employers that offer a 403(b) are schools, universities, colleges, hospitals, and certain 501(c)(3) organizations etc.

Usually, with a 403(b), there will be an additional layer of paperwork, as there will be a third-party administrator and fewer investment options than a 401(k). Often mutual funds and annuities.

So you will have your employer, the company that administers the 403(b), and then the investment company that offers the investments.

These plans can offer both pre-tax and Roth options, but in my experience, the Roth option isn’t as common as we see with 401(k)s. Additionally, it isn’t as common with a 403(b) to have a match as it is for a 401(k). The monies go in either pre-tax or after-tax as a Roth contribution and grow tax-deferred until retirement.

Depending on whether you did a traditional 403(b) or Roth 403(b) will determine the taxation at retirement.

2025 Limits:

• 403(b)- (under age 50) = $23,500

• 403(b)-(age 50 and older) = $31,000

• 403(b)-(ages 60, 61, 62, and 63) = $34,750

Unique feature*: 15-year catch-up.

How it works: Employees who have 15 years of service may contribute an additional amount that’s the lesser of:

• $3,000; or

• $15,000, reduced by the number of additional elective deferrals made in previous years; or

$5,000 times the number of years of service with the organization, minus any elective deferrals made in previous years.
*Confirm this is available with your provider.