July 30, 2019

Know Your Limits

By Aaron Mitchell, Alliance Benefits

Did you know you are limited to how much you can contribute to the Alliance 403(b) Retirement Plan each calendar year? You’re also limited to how much you can put into your Alliance Health Savings Account (HSA). The IRS sets contribution limits to all kinds of retirement and savings plans, and the Alliance plans are not exempt from these limits. The reason why the IRS sets these limits is to prevent the wealthy from taking advantage of plan tax savings over the average worker.

The idea of the Alliance 403(b) Plan is to offer our Alliance pastors a chance at a prosperous retirement. With retirement expenses increasing as time goes on, Social Security alone simply isn’t enough to pay for your retirement. It is more important than ever to put additional savings into your Alliance 403(b) account. Most workers are advised to save at least 15% of their earnings for retirement, but even if you can’t quite do that, every dollar helps. If you’re fortunate enough to save more, keep in mind that the current 2019-year limit for 403(b) plans is set at $19,000. For those over the age of 50, the IRS sets an additional catch-up limit of $6,000. So, for you it would be $25,000 in 2019.

If you have a tax savings HSA with the Alliance Health Plan, you are limited to how much you can contribute to it as well. Remember, your HSA stays with you for life and it can grow just like a retirement savings account. You can even invest those dollars if you wish. The current 2019-year limit set on an HSA is $3,500 for an individual or $7,000 for a family.

At the end of each year, the IRS usually raises these contribution limits for the following year. It’s important to keep track of what is announced for these limits, especially if you are contributing the maximum amount so you can take advantage of the higher limit caps the following year.

After reading this and perhaps thinking about how much money you’re saving away in your Alliance 403(b) account and HSA, you may be wondering if you are saving enough? Or if you’re enrolled in both the Alliance retirement and health insurance plans, maybe you’re asking yourself how much you should be saving in your 403(b) plan versus your HSA? Both plans offer fantastic benefits so these are excellent questions to be asking. If you need this advice and more, please don’t hesitate to call our financial advisors at Strategic Financial Partners at (866) 963-1843. They are free of charge and are happy to help with any questions you may have about our benefit saving plans.

 

Aaron joined Alliance Benefits in September 2017. As a Benefits Consultant, he works on building relationships with churches and districts, and assists with health insurance and retirement 403(b) questions. He is assigned to serve the churches and districts in the Midwestern and Northeastern United States. 


Posted in: 403(b) Plan Tools, Health Plan Tools