What Are the Benefits of a Roth IRA or 403(b) Plan?

If you don’t have a 403(b) or 401(k) plan available, fund an IRA. Many small employers, ministries, or faith-based organizations don’t have the money or experience to offer a retirement plan at all, let alone one with either a basic or matching contribution. This means you have to start your own retirement plan. Like the 403(b) or 401(k), an IRA can accommodate either pre-tax contributions (you save taxes now) or Roth contributions (you save taxes later). 

For most young workers and some older ones (for example ministers that take advantage of Minister’s Housing Allowance to reduce their taxable income), a realistic and tax-free choice is to start a Roth IRA or a Roth 403(b). Contributions aren’t tax-deductible, but you can withdraw the principle from them tax-free. As long as you wait until you’re age 59 1/2 to take withdrawals, earnings are tax-free too. Funding a Roth IRA is a good idea, even if you are contributing to an employer’s retirement plan.

Click here to learn more about Church Retirement Plans.


Envoy does not offer legal or tax advice and encourages that you consult with a lawyer and/or professional tax advisor for personalized tax advice.