What is a 403(b) Plan?

A 403(b) plan is a retirement plan that is typically established by not-for-profit 501(c)(3) employers, hospitals, self-employed ministers, and public education organizations. Eligible employees may make salary reduction contributions into the plan on a pre-tax and/or after-tax (Roth) basis. 

Employers offering a 403(b) plan may make employer matching or employer basic (non-elective) contributions to the plan on behalf of the eligible employees. 

Earnings within a 403(b) plan accrue on a tax-deferred basis if the contributions to which they are associated are pre-tax contributions. Earnings within a 403(b) plan accrue on a tax-free basis if the contributions to which they are associated are after-tax (Roth) contributions. Certain restrictions apply. 

As a general rule, the administration associated with a 403(b) plan is less involved than the administration of a 401(k) plan. 

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Interested in learning more about 403(b) plans? Call or email Envoy Financial and one of our specialists would be happy to speak with you.