About Defined Contribution

You’ve probably heard of the different types of retirement plans: 403(b), 401(k), 401(a), and 457(b) Deferred Compensation with both traditional and Roth contributions. As a university employee, a Defined Contribution 403(b) Retirement Plan may help meet your retirement needs.

Nationwide®, based in Columbus, Ohio, has worked with private and public sector employees for more than 40 years, so we know the kinds of questions you may have about your plan. We’ll give you the tools and information to help you feel confident about investing for retirement. Keep in mind that investing involves market risk, including possible loss of principal, and there’s no guarantee that investment objectives will be achieved.

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What is a 403(b) Plan?

A 403(b) plan is a retirement plan offered by your employer, created to allow employees like you to put aside money from each paycheck toward retirement. A 403(b) plan with Nationwide can help bridge the gap between what you have in your pension and Social Security, and how much you’ll need in retirement.

Here are some frequently asked questions about 403(b) plans:

  • What sets a 403(b) apart from other retirement plans? A 403(b) plan is a retirement plan established for the benefit of certain tax-exempt organizations including university employees. The plan accepts payroll-deducted contributions – or “deferrals” – which are placed in a participant-directed account.
  • What does tax-deferred mean? Basically, you don’t pay income taxes on your plan contributions or earnings until you retire and/or begin to take payments from your account. This may lower your taxable income now and in retirement. Withdrawals taken in retirement are taxed as regular income.
  • How much can I put into a 403(b) plan? Contributions are limited to an annual maximum dollar amount. Check out the current contribution limits on the IRS website.
  • Can I combine retirement accounts? Your Financial Advisor will work with you to combine, or consolidate your eligible retirement accounts into your 403(b) plan. This may make managing your retirement investments a little easier.

Qualified retirement plans, deferred compensation plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59½.

Get the help you need

The sooner you enroll, the more you can possibly save. Take a look at the Enrollment Checklist to see what you’ll need to have handy and speak with your Financial Advisor to enroll today.

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How Does it Work?

There are three steps to participating in a 403(b) plan with Nationwide:

  1. Enroll in your plan – It’s easy to participate in a 403(b). Contributions are automatically deducted from each paycheck and deposited to your account, so you don’t have to remember to write a check.

    Use the Paycheck Impact Calculator to see how saving pre-tax may affect your paycheck.

  2. Invest your money – You’ll choose funds from the list of investment options available within your plan. Keep in mind, any investment involves risk and there’s no guarantee that any fund will achieve its investment objectives. But, we’re here to help.

  3. Receive income –If you retire early, you’ll want to invest enough to live in retirement on your terms. Before you begin taking payments, make sure you’re ready to transition from saving to spending.

    When you’re ready to receive income, your Financial Advisor can help you do so wisely. Depending on the plan type you’re invested in, there may also be a 10% penalty on distributions prior to age 59½.

    Your Financial Advisor can provide you with more information on how to consolidate your retirement accounts to help make managing money easier in retirement.

Get the help you need

The sooner you enroll, the more you can possibly save. Take a look at the Enrollment Checklist to see what you’ll need to have handy and speak with your Financial Advisor to enroll today.

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Why Should I Participate?

Deferred comp helps put you in control of when, where and how much you invest. And that's just the beginning—here are four more reasons why it's smart to participate in your 403(b) plan:

1. You can start anytime

Your 403(b) plan will work for you whether you're approaching retirement or just getting started investing – putting away money in a tax-deferred account can offer several benefits.

2. Every little bit helps

Even investing a little bit of money can really add up over time – it's just important to get started! And if you continue to bump up contributions on a regular basis, the overall impact to your paycheck may not seem too painful. Consider putting raises or bonuses into your 403(b) plan – it's an easy way to invest a little more.

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Take a look at how an investment could potentially grow over time.
Growth Period Ending Balance
Deferral Per Pay Paycheck Impact Annual Pay Reduction Accumulation 10 Years Accumulation 20 Years Accumulation 30 Years
$25 $18.75 $488 $9,304 $27,605 $63,607
$50 $37.50 $975 $18,607 $55,210 $127,214
$75 $56.25 $1,463 $27,911 $82,815 $190,821
$100 $75.00 $1,950 $37,214 $110,420 $254,428
$125 $93.75 $2,438 $46,518 $138,025 $318,035
$150 $112.50 $2,925 $55,821 $165,631 $381,642
$175 $131.25 $3,413 $65,125 $193,236 $445,249
$200 $150.00 $3,900 $74,429 $220,841 $508,856
$225 $168.75 $4,388 $83,732 $248,446 $572,463
$250 $187.50 $4,875 $93,036 $276,051 $636,070
$300 $225.00 $5,850 $111,643 $331,261 $763,283
$350 $262.50 $6,825 $130,250 $386,471 $890,497
$400 $300.00 $7,800 $148,857 $441,681 $1,017,711
$450 $337.50 $8,775 $167,464 $496,892 $1,144,925
$500 $375.00 $9,750 $186,071 $552,102 $1,272,139
$550 $412.50 $10,725 $204,678 $607,312 $1,399,353
$600 $450.00 $11,700 $223,286 $662,522 $1,526,567
$654 $490.50 $12,753 $243,381 $722,149 $1,663,958
$711 $565.00 $14,690 $267,416 $805,421 $1,887,812
$731 $548 $19,000 $274,647 $827,200 $1,938,859

This table shows the cumulative value of 26 biweekly deferral amounts over 10, 20, and 30 years, assuming a compound annual rate of 7% and a 25% federal tax rate, for a single person with an annual salary of $38,000 and one deduction for federal tax purposes. Actual investment returns will vary from year to year, and the value of your account after the specified periods of years shown in the table may be less or more than the amounts shown. This illustration is hypothetical and is not intended to serve as a projection of the investment results of any specific investment. If fees and expenses were reflected, the returns would have been less.

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3. You'll get service you can count on

Read more about why Nationwide may be right for you.

Get the help you need

The sooner you enroll, the more you can possibly save. Take a look at the Enrollment Checklist for tips on the information you'll need to have handy and enroll today.

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What Are My Investment Options?

As a participant in a 403(b) plan with Nationwide, you’ll have access to a wide range of investment options. Your investment options can help meet your retirement planning needs.

Understand your options

We offer something for everyone, including:

  • Target maturity funds – Select an asset mix aligned to the time frame in which you plan to retire.*
  • Nationwide® Fund Window – Research and choose your own funds from a wide variety of fund families.**

Get the help you need

Talk to a Financial Advisor about your investment options or learn more about how to choose funds.

* Target Maturity Funds are designed to provide diversification and asset allocation across several types of investments and asset classes, primarily by investing in underlying funds. Therefore, in addition to the expenses of the Target Maturity Funds, an investor is indirectly paying a proportionate share of the applicable fees and expenses of the underlying funds.

Target Maturity Funds are designed for people who plan to retire during or near a specific year. These funds use a strategy that reallocates equity exposure to a higher percentage of fixed investments over time. As a result, the funds become more conservative over time as retirement approaches. It’s important to remember that no strategy can assure a profit or prevent a loss in a declining market.

Loss of principal can occur at any time, including before, at or after the target date.

** Please note that the investment options offered through Nationwide’s Fund Window have not been individually selected and are not monitored by the Plan Representative. Nationwide does not monitor the funds offered through Fund Window.

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Get Ready to Enroll

What you will need to enroll

It only takes a few minutes to sign up. Here are some things you'll need:

Get the help you need

Once you've enrolled, you will also have 24/7 access to your account via our participant website or our interactive phone response. Speak with your Financial Advisor to enroll today.

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