Tax-Sheltered Annuity (TSA)
Definition - What does Tax-Sheltered Annuity (TSA) mean?
A tax-sheltered annuity (TSA) is a retirement plan for non-profit organizations, such as schools, hospitals, charities, and churches. These organizations can set up a TSA program for their employees so they can save for retirement. When an employee makes a contribution, they get a tax deduction for it. This plan also delays taxes on their investment earnings until the employee retires and starts making withdrawals.
A tax-sheltered annuity is also known as a tax-deferred annuity.
Insuranceopedia explains Tax-Sheltered Annuity (TSA)
A tax-sheltered annuity is the non-profit version of the 401(k). Because of the way the tax code is set up, the non-profit sector had to design a separate program. In practice though, the two retirement plans are nearly identical.
A worker can only use a TSA if their employer offers one. They cannot set up a plan individually. From there, the amount they can contribute every year also depends on how the plan is set up. Some employers also offer a matching contribution to the TSA to give employees more compensation and encourage them to save more.
How Well Do You Know Your Life Insurance?
The more you know about life insurance, the better prepared you are to find the best coverage for you.
Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.