Why Should I Participate?

ALERT!! Effective 08/08/2008, no changes will be made to CCC’s legacy website, now with Internet address www.ncompliancelegacy.com. Henceforth, www.ncompliance.com goes directly to CCC's new, dynamic, database supported website.

For many months now, CCC has been developing and testing a new, dynamic, database-supported website, which now resides at www.ncompliance.com, while at the same time maintaining this website, which is now our legacy website (www.ncompliancelegacy.com). Development of the new website was essential to allow CCC to provide dedicated sections of its website to more than 50 new clients accumulated since publication of the Final 403(b) Regulations on July 23, 2007. We chose completion of the Plan Document System on the new website as the appropriate time to migrate from the legacy website, even though considerable work remains to be done. Specifically, we will be working with Vendors through the end of calendar year 2008 to incorporate updated Vendor information into the new website. Moreover, 457(b) Deferred Compensation Plan (DCP) information remains only on this legacy website, but those CCC clients for which we are managing their 457(b) Plans may continue to refer to this legacy website until the full migration has been accomplished.

We are very proud of our new website, especially the Plan Document System and the Content Management System (CMS), which allows Client Employers and Vendors to manage the content of their own sections of the website. We hope you share our enthusiasm and will create links form your own websites to your dedicated sections of the CCC website. Doing so will provide everything your employees need to know about their 403(b) Program.

The Three-Legged Stool
Generally speaking, retirement income is generated from three sources: 1) Employer Pension Plans [like PERS]; 2) Social Security; and 3) Supplemental Retirement Savings. Ordinarily, the first two legs of this stool are insufficient for continuation of pre-retirement standard of living through the retirement years. Your employer offers an excellent tax deferred supplemental retirement savings plan as one option for you to add this third leg to your "retirement income stool."

Shaky First Two Legs
For various reasons (e.g., generous guaranteed benefits and substantial investment losses), State Pension Plans like Oregon PERS are under pressure to reduce unfunded liabilities by reducing pension benefits to participants. The Social Security Trust Fund is constantly under review and many fear that benefits will be less than anticipated. Hence, it is prudent to anticipate the need for additional retirement income and take action now to meet that need. Tax deferred savings through your employer's 403(b) plan is an excellent way to take such action.

Education & Retirement Savings
This article provides results of research supported by the TIAA-CREF Institute. Among many other things, the article emphasizes the need for supplemental retirement savings.

Other Frequently Asked Questions
If you still have questions,check out the answers to these Frequently Asked Questions (FAQ).

Ask Your Own Questions
Click on this link to pose your own questions to Carruth Compliance Consulting, by electronic mail (email), telephone, fax, or any standard mail carrier.

Tax Deferred or After Tax?
Traditionally, these have been the two alternatives for savings. Roth IRAs now provide a third option, in which the dollars saved are after tax dollars, but the earnings accrue tax free. Often the rationale given for tax deferred savings is that you should be in a lower tax bracket during retirement. It turns out that you may benefit from tax deferred savings even if you are in a higher tax bracket during retirement. This surprising fact is explained below under "Save More, But Spend The Same"

Save More, But Spend The Same
Suppose you are in the 25% Federal tax bracket, meaning that you pay 25 cents of each additional dollar you earn in Federal taxes (this is called your marginal Federal tax rate). Suppose also that you are in the 9% Oregon income tax bracket and you determine that you could save $100.00 after taxes each month and still meet all of your financial obligations. Then, you could contribute $151.51 to your 403(b) plogram each month and reduce your spendable income by only $100.00. Hence, the effect is that you are saving more, but spending the same, by taking advantage of your employer's 403(b) program.

Additional Illustrations
The illustration provided above under "Save More, But Spend The Same" is expanded and amplified in this section. Simple formulas are provided for use in analyzing your own situation.

Tax Credit For Low Income Savers
A new tax credit became available in 2002, which allows single filers with adjusted gross income under $25,000 and married filers with adjusted gross income under $50,000 to receive a tax credit of up to 50% of the amount contributed.