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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 403(b), 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. 403(b)s are employee benefits, and workers must have a sponsoring employer such as a public school or a church in order to take advantage of one. They are the non-profit worker's equivalent of a 401(k).


A 403(b) plan, sometimes known as a tax-sheltered annuity (TSA) or a tax-deferred annuity (TDA), is an employer sponsored retirement savings plan for employees of not-for-profit organizations, such as colleges, hospitals, foundations, and cultural institutions.

Some employers offer 403(b) plans as a supplement to -- rather than a replacement for -- defined benefit pensions. Others offer them as the organization's only retirement plan.

Your contributions to a traditional 403(b) are tax deductible, and any earnings are tax deferred. Contributions to a Roth 403(b) are made with after-tax dollars, but the withdrawals are tax free if the account has been open at least five years and you're 59 1/2 or older.

There's an annual contribution limit, but you can add an additional catch-up contribution if you're 50 or older.

With a 403(b), you are responsible for making your own investment decisions by choosing from among investment alternatives offered by the plan. You can roll over your assets to another employer's plan or an IRA when you leave your job, or to an IRA when you retire.

You may withdraw without penalty once you reach 59 1/2, or sometimes earlier if you retire. You must begin required withdrawals by April 1 of the year following the year you turn 70 1/2 unless you are still working. In that case, you can postpone withdrawals until April 1 following the year you retire.

References in periodicals archive ?
The platform's capabilities support end-to-end recordkeeping for 401(k), 403b and 457 plans across all market segments.
Press, 1998), 90, 125, 127, 138; ME, "Modem German Music," Leader 5 (April 29, 1854): 403b (attributed to ME [Letters, II:150 n.
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Those with fiduciary duty include trustees of pension and profit sharing, 401k, and 403b plans.
The tax code permits the transfer of pre-tax funds from a 403b account to purchase an "air year.
Anyone who doesn't invest in their 401K or 403B is really missing the boat because contributions to your pre-tax plan come off above the line, again effectively reducing adjusted gross income.
Brokered CDs and 403b accounts are two ways new money has come to Kern Schools, Seyfert noted, adding the CU's investment program's success has hinged on offering products and services that best suits the cooperative's unique member base.
Participants also spent time focusing on not-for-profit finance topics, including audit, tax and accounting issues as well as Form 990 and new 403b employee benefit plan audit requirements.
Your Guide to the Roth IRA, Roth 401k and Roth 403b, by Kaye A.
The stock market went into a tailspin that wiped out ten years of value in a fortnight and put into shock countless retirees whose 401K and 403B investments in stock funds nosedived and slashed their available retirement income in half and perhaps more.
Retirement Accounts: List all information regarding each retirement account/plan, including but not limited to defined benefit plans, 401k, 403B, IRA accounts, pension plans, Florida Retirement System plans (FRS), Federal Government plans, money purchase plans, HR10 (Keogh) plans, profit sharing plans, annuities, employee savings plans, etc.