403(b) Plan

Loading the player...

What is a '403(b) Plan'

A 403(b) plan is a retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers.

Generally, retirement income accounts can invest in either annuities or mutual funds.

Also known as a "tax-sheltered annuity (TSA) plan."

BREAKING DOWN '403(b) Plan'

The features of a 403(b) plan are very similar to those of a 401(k) plan. Employees may make salary deferral contributions that are usually limited by regulatory caps. Individual accounts in a 403(b) plan can be any of the following types:

- An annuity contract, which is provided through an insurance company
- A custodial account, which is invested in mutual funds
- A retirement income account set up for church employees

RELATED TERMS
  1. IRS Publication 571: Tax-Sheltered ...

    A document published by the Internal Revenue Service (IRS) that ...
  2. Annuity Contract

    The written agreement between an insurance company and a customer ...
  3. Years Certain Annuity

    An insurance product that pays the holder a monthly income for ...
  4. Valuation Period

    The time between the end of the business day of the first business ...
  5. Deferred Annuity

    A type of annuity contract that delays payments of income, installments ...
  6. Qualified Joint And Survivor Annuity ...

    An annuity payment from a qualified plan or 403(b) account that ...
Related Articles
  1. Retirement

    403(b) Plan Tutorial

    Learn about the set-up, the contributions to and the distributions from this retirement plan for certain employees of public schools and tax-exempt organizations.
  2. Retirement

    Explaining the 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers.
  3. Retirement

    Top 403(b) Questions Answered

    This plan doesn't get as much attention as its more popular cousin - the 401(k) - but it has a lot of benefits for eligible investors.
  4. Retirement

    Top 9 Benefits Of A 403(b) Plan

    A 403(b) plan is a tax-sheltered retirement plan for employees of many non-profit entities, including public safety and educational organizations.
  5. Savings

    The 4-1-1 on 403(b) Plans

    These plans resemble 401(k) plans in many respects, but are specially designed for nonprofit entities.
  6. Retirement

    403(b) Plan: Eligibility Requirements

    By Denise Appleby Who May Establish a 403(b) Plan?A 403(b) plan can be established by any of the following organizations: A tax-exempt organization established under section 501(c)(3) of the ...
  7. Home & Auto

    An Overview Of Annuities

    These contracts provide a guaranteed income stream. Learn how they work and their benefits.
  8. Retirement

    Guaranteed Retirement Income In Any Market

    By laddering annuities, you can be sure you'll have income no matter what the market does.
  9. Financial Advisors

    Are Longevity Annuities in 401(k)s a Good Idea?

    An in depth look at the arrival of longevity annuities in 401(k)s and IRAs.
RELATED FAQS
  1. Who is eligible to obtain a 403(b) plan?

    Learn which employers offer 403(b) plans and see how they are custom-designed for nonprofits but similar to 401(k) plans ... Read Answer >>
  2. I'm a teacher. Which is better for me, a 401(k) or 403(b)? What is the difference? ...

    The first step is to check with your employer regarding any retirement plan(s) it provides for employees, as you can only ... Read Answer >>
  3. Who is eligible for a Teacher Retirement?

    Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ... Read Answer >>
  4. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
  5. Are annuities for seniors only?

    Understand the benefits of investing in annuities at a younger age and how fixed or variable annuities might benefit the ... Read Answer >>
  6. I am a teacher in a public school system and I don't presently have a 403(b) plan, ...

    If you establish a 403(b) account under the school's 403(b) plan, you may roll the Traditional IRA assets to the 403(b) account. ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center