Participating in a voluntary savings plan is a great way to build your retirement savings and allows for retirement savings on a pre- and post-tax basis.
All employees who receive a W2 from SUNY are eligible to participate in either of the SUNY Voluntary Savings Options.
The 403(b) and the 457(b) plans allow employees to have money deducted from their paychecks on a pre- and post-tax basis to help supplement their post-retirement income from Social Security, employer sponsored pension plans, and personal savings.
Through the pre-tax option, your contributions, plus earnings, are not taxed until you withdraw the funds, allowing for even greater savings through tax-deferred growth. Usually this will be during your retirement, when your income may fall within a lower tax bracket.
Through the post-tax option, your contributions are taxed at the time you make them (via payroll deduction), and when you withdraw the funds (contributions or earnings), you are not taxed. Use of the post-tax option may help you maintain a balance against tax rates that increase over time.
Both plans function similarly, but there are a few important key differences between the two different plan types. The following chart provides additional information about each plan so that you can see how the plans function, and how they differ.
More information about the 403(b) and the 457(b) plans: