What are the advantages of a TSA?
1. You choose the amount you want to save. 2. Your contributions are made through payroll reduction. 3. You will not pay federal income tax on your contributions or the interest accrued until you withdraw them. 4. Your take home pay will be greater than if you save on an after-tax basis. 5. Your TSA is completely portable. The following example shows you the advantages of saving on a pre-tax basis. The example is based on a $2,000 a month gross salary for a participant in the Teacher Retirement System (TRS). The participant claims married with one exemption for federal income tax (FIT). As you can see in example number 2, when $100 is saved on a pre-tax basis the net salary is reduced by only $85. In example 3, you can save more but have no change in your net salary than when you save after-tax.
