If someone offered you free money, would you refuse it? Probably not. Uncle Sam doesn't offer many gifts. But through the Ministers' Retirement Fund (MRF) there is free money available to every minister.  If you don't contribute to your 403(b) in the MRF, you are missing out on this free money.

The more you contribute the more free money you get. Here's why.

Contributing part of your salary to a 403(b) gives you several compelling benefits:

-          You get an immediate tax break, because contributions come out of your paycheck before taxes are withheld, thereby lowering your taxable income.

-          You get tax-deferred growth -- meaning you don't pay taxes each year on capital gains, dividends, and other distributions.

-          You can take out the money as housing allowance after 59 and never pay tax on the money going it or coming out.  Uncle Sam only allows this feature for ministers enrolled in a church plan like the MRF 403(b) with the UPCI. 

-          You can choose to not take Mandatory Required Distributions (MRD) at 70 if you are still active in ministry and leave the money in the 403(b) to grow for later retirement use or gifting to your family or ministry.  Again Uncle Sam only allows this feature in a church plan like the MRF 403(b) with the UPCI.

Recent updates for the 403(b) plan places the federal limit on annual contributions at $16,500 for the 2010 tax year.

If you are 50 and older, present rules also allow catch-up provisions. Those 50 and older now may contribute an additional amount, $5,500 for 2010, above the maximum allowable 403(b) contribution.  This is a total of $22,000 a year allowable contribution to your MRF retirement account.

There are additional limits up to $49,000 in contributions when the contributions are combined minister and church and up to $54,500 if over the age of 50.  You can locate the rules related to this at www.mrfupci.org by clicking on the link 2010 Contribution Limits.

MRF provides several investment options for all participants from conservative to aggressive.  You have the privilege of choosing your risk tolerance to fit your age and goals.

For all its tax advantages, the 403(b) is not penalty-free if you pull out money from your account before age 59-1/2.  With a few exceptions, you'll owe income taxes on the amount withdrawn plus an additional 10% penalty.

A sage was asked, When is the best time to plant a tree?  His reply, The best time to plant a tree is 20 years ago! The next question was, And the next best time? His response was,  Today!  If you havent started contributing to your retirement plan, today is the best time to start.

Go to www.mrfupci.org and click on MRF Plan Information or contact T. M. Jackson at 314-837-7300 ext 276 or tmjackson@upci.org.