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Publications
: NA News : April, 2004 |
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National
Association of Congregational Christian Churches, P.O. Box 288,
Oak Creek, WI 53154
414-764-1620
Email:
naccc@naccc.org
Web Site: http://www.naccc.org |
| THE CASE FOR SAVING
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For more information about setting money aside for your future, please call toll free at
800-986-6222 and ask
for Rev. Margaret (Maggie) Lewis. |
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We all know we need to set money aside for retirement. Social Security was never meant to be a sole source
of retirement income, and the experts say that Social Security benefits for retirees may decrease as the years go by.
Many employers recognize their responsibility to increase their employees' financial security. When they do
so through the Retirement/Death Benefit Plans offered by the NACCC in partnership with The Ministers and
Missionaries Benefit Board (MMBB), the plans build valuable assets for retirement while providing disability income
and death benefit protection during the working years. Even with these programs in place, it is wise to "go to
the ant...consider her ways and be wise." (Proverbs 6:6).
Two Main Ways to Save
Once you decide to save, it makes a big difference
how you save. When you save on an after-tax basis, you
have federal, state and applicable local income taxes withheld. With what's left, you set aside money to save.
When you save pre-tax, you cut your current tax bill while setting aside money for your future. Pre-tax savings
go into your account before any federal, state and local income taxes are withheld. This reduces your taxable
income, leaving more in your pocket than with after-tax savings.
The Pre-Tax Difference
Let's say you save $200 a month and you're in a 28% income tax bracket.
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Pre-Tax Savings |
After-Tax Savings |
| Monthly Pay |
$2,500 |
$2,500 |
| Savings Contribution |
$200 |
$200 |
| Income after saving |
$2,300 |
$2,300 |
| Taxable Income |
$2,300 |
$2,500 |
| Income Tax on Taxable Income |
$644 |
$700 |
| Spendable Income (after saving & taxes) |
$1,656 |
$1,600 |
| Difference in Spendable Income* |
$56 more w/pre-tax |
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*Assumes total
income tax rate of 28%. A higher tax bracket would make
an even greater difference. |
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TAS Makes It Easy
Whether you contribute pre-tax or after-tax, The Annuity Supplement (TAS) makes saving easy. You can
contribute a percentage of your pay or a set dollar amount, and you can get started for as little as $10 a month. TAS
also accepts rollovers from another retirement plan or Individual Retirement Account (IRA).
Tax Advantages
With pre-tax TAS contributions, you cut your current tax bill. With both pre-tax and after-tax contributions,
you postpone income tax on all investment earnings as long as your account remains in the plan. And if you are
ordained, you pay no income tax on the retirement benefit you claim as housing. The amount of retirement benefits that can
be claimed as your housing allowance is the lesser of: a)
the fair rental value of your furnished home, plus utilities, or b) your actual housing expenses.
For more information about setting money aside for your future, please call toll free at 800-986-6222 and ask
for Rev. Margaret (Maggie) Lewis.
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Page 4
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Cover,
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3,
4,
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6,
7,
8,
9
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