403(b) Savings Plans
All FSU employees can participate in a voluntary 403(b) Savings Plan, including a pre-tax 403(b) and/or a Roth 403(b). Both are excellent options for employees when retirement planning and are only available to FSU employees.
A pre-tax 403(b) Savings Plan account allows participants to save money for retirement while reducing their income tax liability.
A Roth 403(b) account allows participants to pay taxes on contributions now but will receive qualified withdrawals (including earnings) tax-free at retirement.
Contributions are payroll deducted on a pre-tax basis for pre-tax 403(b) participants and/or on a posttax basis for Roth 403(b) participants. These contributions are forwarded to the participant's selected investment company.
Vesting
You are always 100% vested In employee contributions and rollover contributions, plus any earnings they generate.
Investment flexibility
You decide how to invest your plan account, selecting from investment choices provided under the plan. You can change your investment choices anytime.
Accessing your money before retirement
The plan was established to encourage long-term savings, so withdrawals prior to age 59½ might be subject to federal restrictions and a 10% federal early withdrawal penalty may apply.
Money can be withdrawn from the plan in these events:
- Death Disability
- Severance from employment
- Financial hardship (Hardship withdrawals may be made from salary reduction contributions only, not from earnings on those contributions)
Income taxes are payable upon withdrawal. Be sure to talk with your tax advisor before withdrawing any money from your plan account
In addition, the Internal Revenue Service (IRS) requires you to take Required Minimum Distribution (RMD) withdrawals from your retirement account(s) annually beginning the year you reach the RMD eligible age. RMD eligible age is:
- Age 73 if you were born January 1, 1951, or later (The RMD eligible age will increase to age 75 after December 31, 2032)
- Age 72 if you were born after June 30, 1949, and before January 1, 1951 (For individuals turning age 72 in 2023, no RMD payment is required in 2023)
- Age 70 ½ if you were born before July 1, 1949.
Important considerations before deciding to move funds either into or out of your Voya account
There are many things to consider. For starters, you will want to carefully review and compare your existing account and the new account, including: fees and charges; guarantees and benefits; and, any limitations under either of the accounts. Also, you will want to know whether a surrender of your current account could result in charges. Your financial professional can help you review these and other important considerations. Consult a tax professional before making a decision to move funds either into or out of your Voya account.
Loans
The plan is intended to help you put aside money for your retirement. However, Florida State University has included a plan feature that enables you to access money from the plan.
- The amount the plan can loan to you is limited by rules under the tax law. All loans will be limited to the lesser of: one-half of your vested account balance or $50,000.
- Loans must generally be repaid within five years.
- You pay interest back to your account. The interest rate on your loan will be the Prime Rate plus 1%.
Defaulted loan amounts will be taxed as ordinary income and may incur a 10% federal early withdrawal penalty if the employee is under age 59½.
Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial professional.