Saving today for the retirement you want tomorrow
We’re here to help you make the most of your RPB employer-sponsored retirement plan. As you're considering your contribution options, keep in mind that both you and your employer can put money into your account each year. The contributions from your paycheck can be made as pre-tax contributions, post-tax Roth contributions, or a combination of both.
We recommend that your annual contributions total at least 18% of your total annual compensation: 15% from your employer and 3% or more from your paycheck. Every dollar you contribute today will grow more than contributions you make when you’re closer to retirement.
And make sure to check your account at least once a year to make sure your investment allocations and contributions are keeping you on track for the retirement you deserve. Remember: the sooner you begin to contribute—and the more you put in—the greater chance you have of being financially prepared for retirement.
Employer contributions and employee elective salary deferrals
Your contributions will likely come from two sources: your paycheck and your employer.
- Employer Contributions can only be made to your 403(b) account on a pre-tax basis. Employer contributions are in addition to your regular salary (and parsonage for clergy) and are often determined as part of your benefits when you’re hired.1
If your employer contributes more than the annual IRS limit, the excess contributions will automatically go into a Rabbi Trust account.
- Elective salary deferrals—the amount you decide to contribute from your compensation—can be made with pre-tax and post-tax Roth contributions to your 403(b) account.
Your employer will automatically deduct the money from your paycheck. You can change your elective salary deferral at any time, though your employer may want you to fill out a new Elective Salary Deferral Form each time.
There are no minimum retirement contribution requirements, and you can change the amount you contribute as often as you like as long as your total contributions stay within the IRS limits. Even if you got a late start, you may be eligible to make catch-up contributions, based on your age.
- If you leave your job before the end of a plan year, your employer may take back the unearned contribution amount.
Make sure you’re saving enough for retirement.
Our calculators can help you figure out a realistic estimate for how much you should contribute to your 403(b) account.
Pre-tax vs. post-tax Roth contributions
Consider making both pre- and post-tax Roth contributions to your 403(b) account to help mitigate your tax burden in retirement. Use this calculator to help you forecast your overall tax burden when you access your savings throughout retirement.
Dollars come out of your paycheck and go into your account before they are taxed. These pre-tax contributions reduce your taxable income, and theoretically give you more dollars to invest with. You pay taxes in retirement when you take distributions from your account—possibly at a lower tax rate than what you pay now. The taxes you pay will be on all of it—including any earnings growth.
Employer contributions can only be made with pre-tax money. You’ll owe income taxes on these employer contributions and any earnings upon withdrawal.
You pay taxes on the money you’re contributing before it goes into your 403(b) account. However, you pay no taxes on the money and any earnings when you withdraw it from the account in retirement, provided it’s a “qualified distribution” (i.e., you’ve met the other requirements).
Only contributions withheld from your compensation can be made on a post-tax basis.
Once you’ve designated an elective contribution as a Roth post-tax contribution, you cannot later change it to a pre-tax elective contribution.
The earnings portion can be withdrawn tax-free as long as you’ve owned your account for five tax years and you’re at least age 59½ (or due to disability or death). A tax year begins on January 1 of the year that you made your first Roth contribution.
Since you’re not required to begin withdrawals from your retirement account until you reach age 70½, benefits can be delayed until a later date, which may help you satisfy the 5-year rule.
An evaluation of contribution rates.
RPB commissioned an objective evaluation of our recommended contribution rates. The recommendations may surprise you—did you know that you can contribute more than 3% of your compensation?
|Contribution Type||2020 Contribution Limit||2021 Contribution Limit|
Employee Elective Salary Deferral
Catch-up Contribution (if age 50 or older)3
Under 50 = $57,000
Under 50 = $58,000
- For clergy, taxable compensation excludes parsonage; for non-clergy, taxable compensation is your salary.
- If you're age 50 or older and contribute the maximum elective salary deferral ($26,000 in 2021), your total employer and employee contributions is the higher total limit of $64,500.
Discuss RPB’s pre-tax and post-tax Roth 403(b) elective contribution options with your personal tax advisor or a Fidelity Retirement Planner to determine which one, or combination of both, is right for you.
Determine how much you want to contribute to your RPB retirement account on a monthly basis. Then complete the Elective Salary Deferral Form—or use a similar form provided by your employer—and submit it to your employer.
Roll balances from your other retirement plans into your RPB 403(b) account. Having all of your retirement accounts in one place can make it easier to manage your assets during retirement.
Consolidate your accounts.
It’s easy to roll your other retirement accounts into your RPB accounts.