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Question 45 — Need to Establish a 403(b)(9) Account

Q. My church client believes it needs to establish a 403(b)(9) retirement income account so the church board can designate post-retirement housing allowances as tax-free distributions. Is this benefit available only from 403(b)(9) accounts?

A. No, designated distributions intended to cover the post retirement housing costs of clergy are permissible from 403(b)(1) annuities, 403(b)(7) custodial accounts and other retirement plans. No need to set up a 403(b)(9) account for that specific purpose!