A 403(b) plan is a retirement savings plan designed for employees of public schools, tax-exempt organizations, and certain ministers. It allows participants to contribute a portion of their salary on a pre-tax or after-tax (Roth) basis.

Employees of public schools, non-profit organizations under Section 501(c)(3) of the Internal Revenue Code, and certain clergy members are eligible to participate in a 403(b) plan.

The main difference is the type of employer offering the plan. 403(b) plans are for employees of public schools and non-profits, while 401(k) plans are typically offered by private-sector employers. Additionally, 403(b) plans often have different investment options and may be exempt from certain administrative requirements.

For 2024, the annual contribution limit for a 403(b) plan is $23,000 for individuals under 50. Those aged 50 and older can contribute an additional $7,500 as a catch-up contribution, for a total of $30,500.

Yes, many employers offer matching or discretionary contributions to 403(b) plans, although the specifics depend on the employer’s policies and financial capacity.

Yes, you can roll over funds from a 403(b) into another qualified retirement account, such as an IRA or a new employer’s 401(k) or 403(b), without incurring taxes or penalties if done correctly.

Investment options in a 403(b) plan typically include mutual funds and annuities. The availability of specific options depends on the plan provider.

Yes, many 403(b) plans allow loans and withdrawals, but these are subject to specific rules and potential penalties. Loans must typically be repaid within five years, and early withdrawals may incur taxes and a 10% penalty if taken before age 59½.