Understanding how retirement plans work together

Your ASRS/PSPRS benefit is only one source of retirement income. And while your pension and Social Security may go a long way, they are unlikely to be enough to cover all your expenses in retirement. This is why your 457(b) plan, personal savings, pension and Social Security are important parts of your three-legged income stool.

Health insurance, medical care and taxes can be expensive. You will want to prepare yourself on how those expenses will impact your net retirement benefit. Nationwide offers a supplemental retirement plan for all employees, regardless of the number of hours you work. You can determine the amount of your 457(b) contributions, up to IRS-defined limits; and you can change those contributions at any time, subject to IRS timeframes. Your contributions will be pre-tax dollars, conveniently made through payroll deductions; thus, reducing your current taxable compensation. Percentage deferral and annual automatic deferral increases are also available.

It is important to note that withdrawals from your 457(b) account are generally not subject to the IRS 10 percent premature distribution penalty tax (one exception is contributions made to your plan by a government employer). Upon separation from service and/or retirement, you can begin withdrawals from your 457(b), account. Withdrawals are flexible with periodic distributions available, and can be changed as needed. There is a required minimum distribution at age 70 1/2 if you are no longer working.

Discuss 457(b) options with your retirement advisor to develop a plan that best fits your needs.

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