Rabbis and Cantors Retirement Fund
We are very pleased to announce that a pension plan is now available to OHALAH and RPA members, in which members may elect to participate. Members should make their own decision as to whether this plan is best for you, consulting your own advisors if you wish. Here are answers to questions we anticipate. If you have other questions, or would like more information about any of these questions, please contact the plan administrator, JeremyHockenstein, at jeremy@
1. Why should I save in a “clergy” 403(b) plan for retirement?
Anyone of any age should have a retirement savings plan. Most of us save for retirement through individual retirement accounts or, if we worked in a for-profit company, through a 401(k) plan. The equivalent plans for employees of non-profit organizations are 403(b) plans. By whatever designation, these are all tax-deferred plans. Saving through such a plan allows you to save on taxes now, and allows the money to compound at a higher rate because you don’t pay any taxes on the growth before retirement.
Members of the clergy, including rabbis and cantors, have a particular incentive to join a “clergy” 403(b) plan. These plans allow clergy to claim parsonage in retirement. This means that, according to current tax law, distributions from your 403(b) clergy retirement plan that you use to pay for your cost of housing will be exempt from taxes in your retirement, a very significant advantage.
2. Why should I consider joining the Rabbis and Cantors Retirement Plan in particular?
· The plan allows you to control your own funds, rather than having decisions made about your funds by plan managers.
· You will have access to low-cost funds available through Vanguard.
· The plan does not require membership in any particular rabbinical or cantorial professional association.
· The plan is run by a non-profit organization dedicated to the best interest of plan participants. That organization is The Rabbis and Cantors Retirement Board, Inc., a non-profit Delaware
3. What are my investment options?
You will have your own investment account at Vanguard. Vanguard is a member-owned organization and has a reputation for focusing on low-cost investments in its members’ best interests. You are able to allocate your investments among any of Vanguard’s funds. The plan administrators encourage you to consider its low-cost index funds, either the “all-in-one” retirement funds (where you pick your target retirement date and Vanguard adjusts your allocations over time) or the“core” index funds. Vanguard has advisors who can help you.
4. How do I sign-up if I am interested?
a. Complete our on-line form here.
b. Call Vanguard at 800-523-1188 and say that you want to join the 403b plan #10197911 administered by the Rabbis and Cantors Retirement Board. Ask Vanguard to send you an email with the enrollment link. When you get it, complete the form.
c. After you have signed up, the plan will send you a form to tell your employer how much you would like deducted from your paycheck each month and transferred to your retirement account. (The maximum for 2012 is $17,000 through your payroll deduction.)