Have you been told you may be eligible for a 403(b) plan? If you had never heard of it before and want more information, you have come to the right place.
Basics of the 403(b) Plan
The 403(b) plan, also known as the tax-sheltered annuity plan, is a retirement plan that can be put in place only by specific employees of tax-exempt organizations and public schools, as well as certain ministers. Just some of the many types of tax-exempt employees who are eligible include teachers, librarians, nurses, doctors, and administrators of schools.
It can be in the form of either mutual funds or annuities. Features within this plan are comparable to what you would find with a 401(k) plan.
Employees can set up a custodial account if they want to invest in mutual funds. They also can get an annuity contract that they buy from an insurance company. There also is the retirement income account that may be established for church workers.
Benefits to Having a 403(b) Retirement Plan
One of the greatest things about the 403(b) retirement plan is that funds can be vested over a shorter period than is the case with 401(k) plans. Some of them allow for you to vest funds immediately.