For members enrolled in the: DB Defined Benefit Plan DC Defined Contribution Plan CO Combined Plan

Supplemental Savings

STRS Ohio may provide a substantial amount of your retirement income; however, supplemental retirement plans are essential for building a financially secure future. The time to start saving is now and enrollment is simple.

Resources

I Wish Someone Would Have Told Me ... brochure
Ohio Deferred Compensation website
Internal Revenue Service website
Your employer — to obtain information about 403(b) plan vendors.
STRS Ohio’s Financial Fitness seminar and Beyond the Classroom workshop. These STRS Ohio-sponsored programs offer tools that can assist with determining your “retirement income gap” — the anticipated gap between retirement income and expenses.

Plan features and contribution limits

Tax regulations favor those who want to save for retirement. Tax-deferred accounts, such as a 403(b) or 457(b) governmental plan enable you to avoid current taxation on your contributions and put the full pretax amount to work for you before it is reduced by taxes.

	403(b)	457(b) Governmental Plan	Traditional Deductible IRA	Traditional Nondeductible IRA	Roth IRA
Eligibility¹	Employees of public school systems and tax-exempt organizations under Section 501(c)(3) of the Internal Revenue Code	State and municipal workers and public teachers	No age limits if employed No income limits (see deductibility rules) Nonwage earning spouse eligible to participate	No age limits if employed No income limits Nonwage earning spouse eligible to participate	No age limits Income limits Single: Full contribution with AGI^* less than $146,000; partial contribution with AGI at least $146,000 but less than $161,000 Joint: Full contribution with AGI less than $230,000; partial contribution with AGI at least $230,000 but less than $240,000 Nonwage earning spouse eligible to participate
Deductibility	Not applicable	Not applicable	Single: Full deduction if covered by a retirement plan at work and AGI^* is $77,000 or less; partial deduction if AGI is more than $77,000 but less than $87,000 Joint: Full deduction if covered by a retirement plan at work and AGI is $123,000 or less; partial deduction if AGI is more than $123,000 but less than $143,000	No	No
Contribution limits under age 50²	2024: $23,000 2025 and after: Indexed for inflation	2024: $23,000 2025 and after: Indexed for inflation	2024: $7,000 2025 and after: Indexed for inflation	2024: $7,000 2025 and after: Indexed for inflation	2024: $7,000 2025 and after: Indexed for inflation
Age 50 or older catch-up provision³	2024: $7,500 2025 and after: Indexed for inflation	2024: $7,500 2025 and after: Indexed for inflation	2024: $1,000 2025 and after: Indexed for inflation	2024: $1,000 2025 and after: Indexed for inflation	2024: $1,000 2025 and after: Indexed for inflation
Final three-year catch-up provision⁴	None	2024: $23,000 2025 and after: Indexed for inflation	None	None	None
15-year rule catch-up provision⁵	2024: $3,000	None	None	None	None
Early distribution penalties⁶	10% of distributions before age 59-1/2	None	10% of distributions before age 59-1/2	10% of distributions before age 59-1/2	10% of distributions before age 59-1/2 and held less than 5 years
Required minimum distribution⁷	Generally begins April 1 of the year following the year in which you reach age 73	Generally begins April 1 of the year following the year in which you reach age 73	Generally begins April 1 of the year following the year in which you reach age 73	Generally begins April 1 of the year following the year in which you reach age 73	None

^*Adjusted gross income ¹IRA plan participants who participate in an eligible retirement plan at work and meet certain income requirements may receive at least a partial deduction. See your tax advisor for more detailed information. ²For IRAs, contributions are limited to the lesser of the contribution limit or earned income in a given year. The 403(b) and 457(b) allow participants to defer 100% of includable compensation — not to exceed the limits indicated in the table above. The coordination of contributions is eliminated between eligible employer plans. Example: If in 2024 you contribute $23,000 to your 403(b), you can also contribute up to $23,000 to a 457(b) governmental plan. ³Applicable to 403(b), 457(b) and IRAs, this provision allows participants age 50 and older to contribute additional amounts as specified above. Example: An educator, age 50 or older, could conceivably contribute $61,000 during 2024 ($23,000 + $7,500 to the 403(b) + $23,000 + $7,500 to the 457(b) = $61,000). ⁴This provision, for a 457(b), favors participants who haven’t contributed the maximum amount in prior years and are approaching retirement. The provision permits twice the maximum contribution limit and applies to the three years prior to retirement age. If 457(b) participants use the “final three-year” provision, they cannot also use the “age 50 catch-up” provision. Example: An educator planning to retire in 2027 could take advantage of the “final three-year” provision in 2024, 2025 and 2026. Beginning with 2024, the educator could contribute the contribution limit of $23,000 plus the $23,000 three-year provision limit, for a total of $46,000. Then, this individual could also contribute the contribution limit plus the three-year provision limit in 2025 and 2026. As the tables above indicate, the limits for 2025 and after may differ from 2024 depending on inflation. ⁵This provision allows 403(b) plan participants with 15 years or more of service with an employer, and an annual average contribution of $5,000 per year, to contribute an additional $3,000 per year up to a lifetime maximum of $15,000. If an employee qualifies for the 15-year rule, that individual could have elective deferrals to the 403(b) as high as $26,000 for 2024 under this rule ($23,000 plus $3,000 — the catch-up for 15 years of service). ⁶IRA participants may make penalty-free withdrawals for higher education costs or a first-home purchase ($10,000 maximum for home expenses). ⁷IRA participants may continue to make contributions to the plan if they are over age 73 and working.