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A 401(k) is a retirement savings plan sponsored by an employed commonly used in the private sector.

A traditional 403(b) plan is a tax-deferred retirement plan for employees of a non-profit employer such as a school district and non-profit organizations. 403(b) accounts are established and maintained by public school districts for eligible employees.

Public school district employees also have the option of a 457(b) Governmental Deferred Compensation retirement plan.


* All Plans mentioned here reduce your taxable income through pre-tax contributions.
* Employee (and employer) contributions as well as interest earned grow tax-deferred.
* Possibility of paying less tax on distributions of funds if individual is in a lower tax bracket during retirement.
* The ability to take a tax-free loan from your own 403(b) or 457b account.

IRS Contribution Limits:

401(k), 403(b), and 457(b) Elective Deferral Limit for each plan participant may contribute (tax-shelter):

$18,000 per year

Additional Contribution Amounts:
*Age 50 and older Catch-Up:

+$6,000 per year

*Additional Catch-Up Provisions for 403b/457b plans please see advisor

Distribution of Retirement Account:

- 403(b) Plans are eligible for withdrawal without IRS penalties after age 59.5 or age 55 if retired from service

- 401(k) Plans are eligible for withdrawal with penalty only after age 59.5

- 457(b) plan are eligible for distribution after the employee has severed service with their employer