403(b) plan


A retirement plan similar to a 401(k) plan, but one which is offered by non-profit organizations, such as universities and some charitable organizations, rather than corporations. There are several advantages to 403(b) plans: contributions lower taxable income, larger contributions can be made to the account, earnings can grow tax-deferred, and some plans allow loans. Contributions can grow tax-deferred until withdrawal at which time the money is taxed as ordinary income (which is sometimes a disadvantage).

Use 403(b) plan in a sentence

You should try to get a good 403 plan so that you know you will have enough to live on in the future.

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Since they were a non-profit organization, they were able to offer a 403 plan to their employees instead of a 401k.

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The 403 plan was a really good retirement plan and I was happy to be the one in charge of making sure it was handled properly.

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