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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 ?
New employees make a onetime irrevocable election, choosing to participate in the University s 403b Plan or, in the Arkansas Public Employees Retirement System a state level defined benefit plan.
For most educators, that means contributing to the 403B plan offered through your employer.
Unless purchased through a 403b plan, annuities have no tax benefit for the initial income invested.
Base: Not Already Retired And Have A Job/Career From Which To Retire Participates in 401k or 403b plan Total Yes Chose Not To (n=1,377) (n=652) (n=181) % % % Very/Somewhat Likely (NET) 41 49 24 Very likely 17 21 12 Somewhat likely 24 27 12 Not sure 38 38 40 Very/Somewhat Unlikely (NET) 20 13 36 Somewhat unlikely 7 6 6 Very unlikely 13 8 30 Income 18-34 35-44 45-54 55+ (n=435) (n=326) (n=338) (n=278) % % % % Very/Somewhat Likely (NET) 47 43 43 26 Very likely 19 19 17 12 Somewhat likely 28 24 26 14 Not sure 39 37 45 30 Very/Somewhat Unlikely (NET) 14 19 13 44 Somewhat unlikely 7 10 4 10 Very unlikely 7 10 8 35 Note: Percentages may not add up to 100% due to rounding.
Those with fiduciary duty include trustees of pension and profit sharing, 401k, and 403b plans.
Most of the risk management and insurance issues facing charter schools are the same that traditional public schools face: risk assessment, teacher screening, liability insurance for Parent Teacher Organizations, medical and benefits insurance, design of 403B plans and premises security.
The ETFs will be available for 401k, 457 and 403b plans on the 401kDIRECT platform by means of the Mid Atlantic ETFxChange Program.
403b plans (similar to 401k's) are retirement plans for employees of certain tax-exempt organizations such as public schools, universities, hospitals and non-profit groups.
Districts must change the way they oversee tax-sheltered accounts -- also known as 403b plans -- offered to their employees due to new IRS regulations that take effect next Jan.
PCS specializes in creating customized 401k plans, both ERISA and non-ERISA 403b plans, 457(b) and (f) plans, profit sharing arrangements and executive-level non-qualified deferred compensation programs.