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Pros and cons of a 403(b) ProsConsTax advantagesFew investment choicesHigh contribution limitsHigh feesEmployer matchingPenalties on early withdrawalsShorter vesting schedulesNot always subject to ERISA1 more row • 6 Feb 2023

Both of these accounts allow for tax-deductible contributions and tax-free growth for employees with eligible income. A 403(b) – which is only available to employees of certain organizations – has higher annual contribution limits, while an IRA can offer a variety of options for tax and investment purposes.

The main difference between a 403(b) and 401(k) is the type of employer who offers them. 401(k) plans are offered by private, for-profit companies. 403(b) plans, on the other hand, are offered by tax-exempt and nonprofit organizations.

Can You Contribute to a 401(k) and 403(b) at the Same Time? You can contribute to both a 403(b) and a 401(k) if your employer offers both types of plans.

It's similar to a 401(k) plan maintained by a for-profit entity. Just as with a 401(k) plan, a 403(b) plan lets employees defer some of their salary into individual accounts. The deferred salary is generally not subject to federal or state income tax until it's distributed.

What's the Difference Between a TSA and a 401(k)? Both TSAs and 401(k) are pre-tax retirement plans that you can get through employers. The difference is that 401(k)s are offered through private, for-profit companies, whereas TSAs are offered through public schools and charitable organizations.

Differences Between 401(k) and 403(b) Plans Because 401(k) plans are more expensive for the company, they usually offer a wider range and sometimes better quality of investment options. Employer match: Both plans allow for employer matching, but fewer employers offer matches with their 403(b) plans.

A 403(b) plan, also known as a tax-sheltered annuity plan, is a retirement plan for certain employees of public schools, employees of certain Code Section 501(c)(3) tax-exempt organizations and certain ministers. A 403(b) plan allows employees to contribute some of their salary to the plan.