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403(b) Plan |
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403(b) Plan A retirement investment plan for employees of certain non-profit organizations in which a contributor defers taxation on contributions until after withdrawal. Under a traditional 401(k), a worker places a portion of his/her pre-tax income into a 403(b) account and allows it to be invested. Taxation is deferred until withdrawal from the account, generally after retirement. A 403(b) is an employee benefits, and workers must have a sponsoring employer, such as a public school or a church, in order to take advantage of one. 403(b) Plan What Does 403(b) Plan Mean? A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for employees of public schools, certain tax-exempt organizations, and certain ministers. 403(b) plan accounts can be any of the following types: (1) an annuity contract, which is provided through an insurance company; (2) a custodial account, which is invested in mutual funds; or (3) a retirement income account set up for church employees. Generally, retirement income accounts can invest in either annuities or mutual funds. Investopedia explains 403(b) Plan The features of the 403(b) plan are very similar to those of the 401(k) plan. Employees may make salary deferral contributions that usually are limited by regulatory caps. Related Terms:
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| ? Mentioned in | ? References in periodicals archive | ||
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| Karen's veritable annuities account is valued at $20,000,
and her tax shelter annuity has amassed $7,000 (she rolled over money
from the 403(b) plan that she had during her 19-year stint at the
hospital). Beginning in 2006, employers can offer
employees the option to make after-tax elective contributions under
their 401(k) and 403(b) plans in addition to traditional pre-tax
elective contributions. Provides:
health insurance, shoes, 403(b) plan with match. |
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