What Is the American United Life 403(b) Plan?
American United Life's 403(b) plan is a tax‑deferred retirement account designed for employees of public schools, non‑profits, and certain faith‑based organizations. Contributions are made pre‑tax, reducing taxable income, and grow until withdrawal after age 59½.
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Key Features and Benefits
- Employer match up to 4% of salary
- Wide selection of investment options: target‑date funds, balanced funds, and low‑cost index funds
- Automatic payroll deduction and online account management
- Creditor protection under federal law
How to Enroll
Employees must complete the online enrollment portal during the annual open‑enrollment period or within 30 days of a qualifying life event. The portal guides users through selecting contribution percentages, choosing investments, and setting up automatic payroll deductions.
Contribution Limits and Catch‑Up Rules
For 2024, the annual contribution limit is $22,500. Participants aged 50 or older can contribute an additional $7,500 catch‑up amount, bringing the total to $30,000. Contributions are deducted from gross pay before taxes.
Investment Options Overview
| Attribute | Detail | Context |
|---|---|---|
| Target‑Date Funds | Automatically shift asset allocation as you approach retirement | Best for hands‑off investors |
| Low‑Cost Index Funds | Track major indices with minimal expense ratios | Ideal for cost‑conscious savers |
| Balanced Funds | Mix of stocks and bonds for moderate risk | Suitable for mid‑term horizons |
Tax Advantages and Withdrawal Rules
Contributions lower taxable income for the year they are made. Withdrawals are taxed as ordinary income. Early withdrawals before age 59½ incur a 10% penalty unless an exception applies (e.g., disability, first‑home purchase).
Monitoring and Managing Your Account
Account holders can log in monthly to review balances, rebalance portfolios, and adjust contribution rates. American United Life offers educational webinars and personalized financial planning tools to help participants stay on track.
Common Misconceptions Debunked
- "401(k) and 403(b) are the same." – They differ mainly in employer type and investment selection.
- "You can't roll over a 403(b) into a 401(k)." – Rollover is possible if the new employer offers a 401(k) and the funds are moved in a qualified manner.