What is a 403(b) Plan?
A 403(b) plan is a retirement account for specific employees of public schools and tax-exempt organizations. It is very similar to a 401(k) but has some unique rules regarding investment options and "catch-up" contributions.
Why Invest in a 403(b)?
- Tax-Deferred Growth: You don't pay taxes on your contributions or earnings until you withdraw the money in retirement.
- Employer Matching: Many employers offer a match, which is essentially "free money" for your retirement.
- High Contribution Limits: You can contribute significantly more to a 403(b) than to an IRA.