A 403(b) plan is an employer–sponsored retirement savings program for employees of public educational organizations and nonprofit organizations. The Internal Revenue Service (IRS) created the 403(b) code and the plan’s tax-advantaged benefits to encourage educators and other non-profit employees to save in a 403(b) plan, to supplement the amount they will receive from their state pension plan at retirement.

How it Works

If you save in the 403(b) plan, your contributions and any growth, dividends, or earned interest will accumulate tax deferred until you withdraw funds, usually at retirement.  Then income is taxed only as funds are withdrawn and generally taxed as ordinary income. You can make contributions to a 403(b) plan only by a salary reduction agreement with your employer.  The amount you save or invest in the plan is called an elective deferral.  With a traditional 403(b), the amount you contribute is deducted from your paycheck before taxes are taken out by your employer.  The money is then forwarded to the custodial investment firm that manages your money.

Types of Plans

  • Traditional 403(b) plans
  • Roth 403(b) plans

Traditional 403b4

If you would like to have your 403(b) plan reviewed or you would like to start one today, please call Kades-Margolis at (800) 433-1828, ext. 4, or you can click this link, fill out the form and submit.  We will have one of our associates contact you.

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