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 certain employees of public schools, employees of certain tax-exempt organizations and certain ministers. 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.

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 the 401(k) plan. Employees may make salary deferral contributions that are usually limited by regulatory caps.