While both 401(k) and 403(b) plans offer tax advantages, the primary difference between them is that the 401(k) is provided to those in private companies, corporations and businesses, while the 403(b) is strictly eligible for non-profit organizations or government employees.
While 403(b) plans used to be regulated under the same provisions as an annuity, these restrictions were lifted in 1974. Because the 403(b) is only offered by nonprofits and government organizations who don’t seek to make a profit, they aren’t eligible to accept profit-sharing opportunities from their sponsor employer.
These plans are essentially very similar to one another, each allowing for Roth options and having an age limitation of 59.5 years until the subject of the account is able to receive distributions.
Although planning for your retirement can bring with it many challenges and obstacles, it helps to understand what your options are and both the benefits and drawbacks of each approach.
By knowing where you stand today and where you hope to be tomorrow, you can find the perfect strategy and retirement account to help get you where you want to be.
The good news is that retirement investment accounts have come a long way, now offering customizable and robust opportunities for success in your saving strategies.
You’ll be able to face your retirement with a new degree of confidence, knowing what it takes to build a meaningful nest egg that will last when it truly matters most.