what is the difference between a 403b and a 401k retirement plan?
I recently remembered about a retirement account from a former employer. it is described as a 403b (tsa) pension plan.
I recently remembered about a retirement account from a former employer. it is described as a 403b (tsa) pension plan.
A 403b is used for a not-for-profit company, otherwise it is exactly the same as a 401k.
They are similar. The 403b is for people who work in certain non-profit industries. Here’s an extract from the wikipedia:
A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), and self-employed ministers in the United States. It has tax treatment similar to a 401(k) plan, especially after the Economic Growth and Tax Relief Reconciliation Act of 2001. Simply put, employee salary deferrals into a 403(b) plan are made before income tax is paid and allowed to grow tax deferred until the money is taxed as income when withdrawn from the plan. Beginning in 2006, 403(b) and 401(k) plans may also include designated Roth contributions, i.e., after-tax contributions, which, if certain requirements are met, will allow tax-free withdrawals. Primarily the designated Roth contributions have to be in the plan for at least five taxable years.
it works something like a 401k but it is where you only can get small amount if needed and by a certain time.
Ask an attorney they will know this better then me. My sister is getting the 403b but she said that they hold so much money and keep putting it back in something and cannot get any money till certain times. It is hard to explain that is why I recommend you to an attorney.